How this advice business has flourished for 50 years
Thriving with its unconflicted business model and client-centric philosophy, Victoria-based GFM Wealth Advisory has reached a significant milestone this year, marking 50 years in the advice business.
Started in 1973 by sole practitioner Tony Gilham, the firm now spans multiple disciplines with specialisation in portfolio construction, strategic advice and self-managed super funds (SMSFs).
When it began, the predominant focus was on insurance and basic deposit products, explained Paul Nicol, managing partner and senior financial planner at the firm.
“In the early ‘90s, I’d say the composition of the business changed and Tony really embraced giving superannuation advice,” Nicol told Money Management.
GFM was among the earliest adopters of SMSF advice, commencing mid-1996 to cater to its high-net-worth client base.
Today, it has around 900 family group clients and $2.5 billion in funds under advice.
“We have a very strong philosophy that investing ought not to be a cookie-cutter approach for our clients, that is, we don’t believe all of our clients should fall in the same model portfolio,” Nicol said.
“The limitations of being able to provide high-quality, bespoke investment advice in retail super, running model portfolios, didn’t appeal to us, so the predominant driver of focusing on SMSFs was to be able to have a bespoke investment offering.”
He continued: “The focus of our business is that we largely service the pre-retiree and retiree market. We believe we have an investment philosophy that is probably better adapted to [this demographic] in the way we construct our client portfolios compared to the younger accumulator.”
In 2003, the firm obtained its own Australian financial services licence (AFSL), following a long-held belief that seeking advice from groups with institutional ownership, particularly when those institutions also manufacture financial products, posed a substantial risk of conflicted advice.
A decade later, it acquired accounting firm P Gruchy and Associates (now GFM Gruchy) to add accounting to the services offered.
Nicol said: “Where we had been exclusively financial planning up until that point, the acquisition really allowed us to bring the whole SMSF offering in-house, setting up administration, investment advice, compliance and accounting.”
Reflecting on the firm’s success in the last 50 years, he credits its client-centric philosophy and investment in long-term relationships. Over half of the staff have been there for over 15 years and Nicol himself joined in 1999, fresh out of university.
“I think our advisers trust in the business and feel immersed in the client relationship. I equally hope that they stay because they feel well-supported to provide the best possible advice they can,” he said.
“This stability is well-noticed by our clients and we make it very clear that we are investing in not just a strong and steady staff base, but also in clients. They understand that we want to seek out this journey with them.”
In the last five decades, there has been a strong sense of multigenerational planning at the firm, with the children of clients often taking up GFM’s services as they begin their retirement planning.
“A lot of clients come to see us with the understanding that, in investing in the long-term, there will be a transition of trusted advice to the next generation. We’re even ending up in the position now with third-generation clients, which is just wonderful,” Nicol said.
Looking at the industry more broadly, he believes GFM’s unconflicted business model in its fee-for-service remuneration, own licence and bespoke investment offering, as the reason it has avoided the trust issues that the financial advice industry has faced.
He also credits higher education standards, combined with practical experience and improved ethics requirements, towards the better position that the industry now finds itself in.
“More broadly, there’s a good sense that the quality of advice in Australia continues to improve and there’s growing trust [in financial advice],” he told Money Management.
Looking ahead at the next 50 years, Nicol is excited for what the future holds. He already envisions an expansion of services to go alongside GFM’s current offerings, such as estate planning.
“We don’t just want our client relationships to be multigenerational, we want our firm to be multigenerational as well,” he said.
“We’re independently owned with no dealer group, third party, or institutional investor in our business, and we want to keep that in place. Over the next few years, I’d like to grow the business to a partnership model where there can be continuity.”
AUTHOR
Rhea Nath
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