With regional and rural suburbs exhibiting high spare capacity to invest, Money Management speaks to three regional advisers on the opportunities beyond the cities and the importance of a strong network.
Data from the Betashares Financial Opportunity Index last year, surveying 52,000 households across the country to analyse their capacity to invest, discovered there was a strong financial opportunity seen in rural and semi-rural areas.
Helped by seachangers, mining and agricultural wealth, this included examples such as the rural town of Dayboro in Queensland, Olinda in Victoria, South Boulder in Western Australia, and Taree in New South Wales, which were all featured in the top 20 suburbs for highest spare cash flow (above $180,000 on average per household).
To delve deeper into this advice opportunity, Money Management spoke with three financial advisers working in regional and rural parts of Australia.
For Stephen Gulbrandson, financial adviser and director of three regional Queensland branches of advice licensee Morgans Financial, he said demand has never been stronger, thanks to the low volume of advisers in the locations.
“We’ve never been busier and that’s shared between all of our offices. In Brisbane, there are more advisers to deal with the growth in demand, so we’re probably seeing the regions outdo the centres purely for the fact that there are only a few of us up here per capita versus Brisbane.”
Tammy Strong, founder and senior financial planner at Strong Planning in Queensland’s Ipswich, said: “I would probably say that I will be the first financial planner opening up within my region, within probably 30 kilometres. I’m hoping that I’m going to be able to put a good name for financial planners in the country regions.”
Meanwhile, Wayne Terry, financial adviser at Financial Edge Group in NSW’s Central Coast region, said the client demographics are also typically different to those in the cities.
“There are plenty of people who are retiring from the big smoke and moving to a place with a much nicer lifestyle. People who move away from capital cities have funds left over from the sale of their former home. This opens up opportunities for large non-concessional and downsizer contributions, which is great for building wealth in a tax-efficient structure.”
Strong said a key source of clients when setting up her business in 2023 had come from referrals due to the close community ties in the area.
“Since opening my own business, I’ve just had referral after referral after referral. I haven’t really advertised. I haven’t pushed for referrals at all, and I don’t think I’m ever going to need to.”
Terry described the referral phenomenon as the “bush telegraph”, but warned this can have positive and negative effects for advice businesses, particularly as many businesses may have been working with professionals in the area for multiple generations.
“Relationships are key, and while financial advice has always been about building relationships, I think it is even more important out in the regions,” he said. “With any regional area, there’s the ‘bush telegraph’ where word of mouth travels fast, so if you’re delivering a superior service then you will be rewarded, but if not then there’s nowhere to hide.”
Making the move from the city
While the three advisers all agreed there is ample demand for advice in the regions, they universally warned that city advisers shouldn’t necessarily expect it to be an easy transition.
“If you’re from Sydney and you think you’re going to move to the regions to try and push for business, it can be a lot harder than you think. People can’t stand someone wearing a suit for example,” Gulbrandson commented.
“The first thing you should do if you were to relocate is stop telling people about where you came from. If you think that you can relocate and everything will be easy, that people will be impressed by all your experience that you had in a capital city, I think you’re setting yourself up for a bit of failure. It takes a lot more time to break into it.”
From the clients’ perspective, they also may find it difficult to relate to advisers from capital cities who are unfamiliar with the area or their professions.
Terry said: “I also think that it would also be difficult for some clients in the regions to relate to advisers in the capital cities, particularly those clients who are more remote and have advice needs which are not the run of the mill.”
On the positive, Strong added she hopes her regional base is an advantage for her clients and will help her put country financial advisers on the map.
“My regional clients don’t like the way that city people speak. They like the realness of me coming from being on a farm.
“They can call me and they’ll get me, they’re not calling an office. I’m the adviser where most of them know where I live. Soon they’re going to be invited to my front paddock to do their review. I go to their homes, I meet their children – the difference is that I give a far more personal level of advice and I’m very proud of that.”
