When Tandem Financial Advice was first launched, general manager Andrew Doquile had to take some criticism on the chin.
“I had to sit there and cop a lot of flack from theINGfeeder groups and the market in general, who were asking where is Tandem at?” Doquile says.
At the time, the managing director ofLynx Financial Services, Stuart Abley, walked away from the dealer group to joinIOOF Funds Managementafter saying the merger did not sit comfortably with him. He was soon followed by the general manager of AustAdvisers, Neil MacDonald, who left to joinAMP.
There was also speculation that planners within the group resented changes to thePartnership Planningname some adopted only a year before when the group changed its moniker from Australian Investment Services (AIS).
But Doquile says the merger was a strategic move enabling Tandem and the ING wealth management arm to get the “nuts and bolts” of the business right from the ground up.
Tandem celebrated what Doquile calls a “quasi-launch” last August, and much of the intervening time has been spent transitioning the three now defunct dealer groups into the more focused Tandem group.
At the time of the restructure, ING flagged the possibility that some planners would be forced out of the consolidated dealer group for being unable to meet new competency benchmarks or because they would feel uncomfortable with the merger.
This proved to be the case, with a total of only 80 advisers now making up Tandem Financial Advice — down from the 270 there were within the three dealer groups before the merger. Only a handful of planners decided to transition across to ING’s other dealer groupsRetireInvestand Millennium 3.
Doquile says the process of adviser selection was two-way, with both advisers and the dealer group choosing if the business relationship should continue.
“No one was forced to join the group. We are a dealer group of choice,” says Doquile.
Tandem advisers had to meet criteria that included a willingness to invest in their own business and some specialities that would allow them to deal with Tandem’s new sophisticated target market.
Lynx advisers were the hardest hit during the transition.
“They probably did not fit the model we had going forward as they were risk specialists and were looking for a different type of business model that would suit their client base,” Doquile says.
Despite doubts over its entrance in the market, Tandem has kept a low profile for a number of months while it has been focusing on getting the fundamentals in place.
“We didn’t want to go to the market with all the bells and whistles and a general marching band and suggest that we could do everything,” Doquile says.
Doquile came on board at the end of the planning process in time for the restructure in August. He was charged with reviewing and implementing the strategy to improve on the previous groups.
He says one of the reasons for the restructure, and something he had to fix, was that the Lynx, Partnership Planning and Aust-Advisers were not clearly branded or well-known outside the financial services market.
“A lot of dealerships are born out of advisers needing a home or institutions wanting to bring a group of advisers together, rather than an institution strategically looking at the marketplace,” Doquile says.
He says that until you get the foundations right, including the dealer’s philosophy, culture and dimensions of business, “you just don’t get it right”.
So in starting up, Doquile says it was necessary to look at benchmark dealerships in the marketplace and learn from them, while still differentiating Tandem.
ING’s rationale for the merger of its group fitted in with this aim of differentiation, as it was seen as an opportunity to build dealerships focusing on particular untapped consumer segments.
Tandem focuses on 30 to 45 year olds and aims to provide wealth accumulation strategies and complex advice to these more aggressive investors. This is an area where Doquile believes other groups aren’t focusing their marketing collateral.
However, at present, this focus is not reflected in Tandem’s client base. Many of the group’s estimated 40,000 clients are seeking retirement advice and many others are looking at wealth protection rather than wealth accumulation strategies.
“We believe there is enormous opportunity within the wealth protection segment, as there hasn’t been a financial advice mantra that allows them to understand wealth accumulation,” Doquile says.
In order to give advisers a dealer group “value proposition” that would enable them to better connect with these clients, Tandem was set up with a three-tier structure.
The first tier is made up of those advisers within Tandem who are willing to invest in their infrastructure and business, in things such as developing an office administrator into a paraplanner within the business.
The second tier are self-employed business people who may have administration infrastructure but haven’t invested in paraplanning services in-house, while the third tier are graduates or those with less than three years experience in financial planning.
Tandem is actively recruiting these less experienced planners with the expectation that they will eventually join their own businesses — the first two tiers are seen as good training grounds for them.
“They have the opportunity to be at the coalface and the chance of a succession plan and possibly to be an equity holder within a practice,” Doquile says.
However, the recruiting drive is not restricted to less experienced planners. Through advertising and professional development days, Tandem has been successful in recruiting some advisers from other dealer groups as well as independent advisers. The aim is to grow adviser numbers to 150 by early next year.
Doquile says the fee structure for planners within the business could be considered expensive and in the top quartile of the market, but he also believes that the services and their implementation are what set Tandem apart.
“If an adviser comes in and asks what our margin is, we wouldn’t take the second appointment,” he says.
He says the effective total rate of membership for advisers is between 10 and 15 cents in every dollar and entitles them to all services, including professional indemnity insurance.
Because it does not aim to compete on remuneration, Doquile has had to ensure Tandem’s value proposition to advisers differentiated itself from the market, while also being compliant.
“All of a sudden you want to be innovative and creative, and all of a sudden you have to comply — the balancing act has been a challenge and is something that all dealerships are dealing with,” Doquile says.
However, he says that because the business was started from scratch, it is operating as if it were already in a post-Australian Financial Services Licence environment. It has “all the ducks in a line” and is ready to apply for the licence in September.
One of the present challenges Tandem faces is helping advisers who are leaving the ING dealer group network to find new homes. However, that task will soon be over, with all exiting advisers, including 60 Lynx advisers, expected to have left by the end of April.
Tandem aims to move away from its low profile within the industry, and expects to have a tier one business in every regional city in Australia by 2005.
“Tandem is wanting to add expertise, not for 2003 but for 2005 and 2007,” Doquile says.
Vital Statistics
Advisers:80
Ownership:ING
Founded:2002
Key figures:Andrew Doquile (general manager)
Ownership:ING
Clients:More than 30,000
Platforms:OneAnswer/Mywrap/Optimix/Blue Ribbon
Research:ING Research
