The transition from being independently owned to institutionally owned was not without its problems forGodfrey Pembroke.
Following the group’s integration with National Australia Bank (NAB) andMLC, 11 of the group’s highest profile planners walked.
Disillusioned with the nature of the business under the new institutional owners, the 11 departed to establish fledgling financial planning group Vector Financial Consultants, under the guidance of Rob Taggert.
Mark Rantall, who joined Godfrey Pembroke as managing director earlier this year, says the exit of the Vector planners had “little to do with being owned by NAB, and more to do with their lifestyle”.
“NAB didn’t place an imposition on the group, it was just a catalyst for their decision-making process,” Rantall insists.
Regardless of how it is perceived, Rantall, who replaced previous managing director Adrian Hondros, is not about to dwell on departures. He recently conducted what could be called the ‘Rantall Roadshow’, visiting as many of the group’s planners as possible before the upcoming Godfrey Pembroke conference.
Discussions have been focused on the evolution of Godfrey Pembroke and the business planning process it hopes to install in consultation with advisers.
“The business planning process is a work in progress,” Rantall says.
“The key areas are training, education, and technical support, with the objective of becoming the industry’s premium group.”
Over the last 18 months, Godfrey Pembroke has embarked on a quality advice program that, according to Rantall, is “an internal accreditation program, and another form of assessment criteria that Godfrey Pembroke planners must meet”.
Planners must submit three plans and/or reviews, which are assessed against criteria includingAustralian Securities and Investments Commission(ASIC) andFinancial Planning Association(FPA) guidelines, as well as internal checks and balances.
Planners must pass this test on an annual basis, and those who fail must work with the practice development managers to rectify the situation.
“Remuneration is not involved. It’s a remediation process rather than one of remuneration. It’s a peer review process, it’s about being up to standard with peers and being recognised by the group,” Rantall says.
In what it regards as unique in the Australian landscape, Godfrey Pembroke also has a practice development group that monitors the improvement of the planners. The board structured group consists of representatives from across the business who work with Rantall and other executives.
“Ultimately, responsibility comes down to the dealer group, but input from the practice development group is taken. They set the agenda for improvement across the group, and they have a very strong voice,” says Rantall.
While the current structure has a predominantly fee-for-service approach, Rantall says one of his objectives in keeping the group at a premium level involves a move towards a completely fee-for-service structure.
Another aspect of the business Godfrey Pembroke feels sets it apart is the in-house equities division. The division gathers information from six Australian stock brokers, performs an analysis on that research and strikes a fair value for the equities of the company in question, rather than relying on the results of just one broking service.
Rantall claims the results that are published are “the best of the best — the best of what the brokers have indicated, with an independent overlay on top”.
As an MLC advisory group, Godfrey Pembroke has been able to tap into the platform focus of its parent group, which runs both the Flexiplan and Masterkey platforms.
The NAB/MLC group is set to spend around $200 million over the next two to three years on building its wealth management offerings with a focus on adviser platforms and processes and adviser development.
Godfrey Pembroke will benefit from this spending with the group making full use of Flexiplan and Masterkey, as well as using the Tower Trust platform, which Rantall says harks back to when Godfrey Pembroke was externally owned.
Currently, Godfrey Pembroke makes use of a core platform and online reporting system called ‘Shape’, which deals with “everything that happens in an adviser’s office, and helps to deal with practice management and compliance in a technical sense,” Rantall says.
Becoming part of Godfrey Pembroke is no mean feat. Premium standards apply not only to those already in the group, but also to those wanting to enter.
“Advisers must be CFP qualified, and must have been running their business for at least five years,” Rantall says.
“We look for fee-based practices with ongoing revenue of $350,000 per annum or more. The practice must also be aligned philosophically with the idea of ‘holistic’ advice. We’re not looking for transaction-based advisers or start-ups, we’re looking for established businesses,” he says.
According to Rantall, the group does run a strong filter over entrants but says there are a number of different entry points into Godfrey Pembroke.
These include recruiting advisers through a referral basis from those inside the group, as well as bringing on potential advisers through paraplanning and junior advisory roles.
On the thorny issue of who owns the client, Rantall says there is no argument.
“At the end of the day the client owns the client. What advisers have is an ownership or right to an ongoing income stream, and the client has the right to move to another adviser.”
But while getting into Godfrey Pembroke can be difficult, so can getting out. There is a buyer of last resort option in place, but Rantall says that they really do want this option to be used as an absolute last resort.
And with the average age of most Godfrey Pembroke planners hovering around 50, it’s something the group needs to come to terms with quickly.
“We are a premium brand and one of the best known dealer groups in Australia, but we are not saying we are the best we can be and that is where the work remains,” he says.
Vital Statistics
Established: 1982
No. of planners: 185
Funds under advice: Over $8 billion
Target market: High-net-worth clients
No. of active clients: 25,000
Average FUA per client: Approx. $320,000
Advice model: Fee for service
Dealer/adviser split: 25:75 to 12.5:87.5
Ownership: NAB (100%)
Offices: 74
Key Figures: Mark Rantall (Managing Director), Greg Connolly (National Practice Development Manager)
Platforms: Flexiplan, Masterkey, Tower Trust
Research: 360 (managed funds), Broking Investment Services (listed)
Next conference: Margaret River, March 2003
