Three years ago, John Keysell and long-time business associate Paul Howden devised a new business venture that merged their existing financial planning practices into a single entity. The plan was to expand and grow their respective client bases around the other partner’s practice, and they agreed to merge their businesses into a fleshier operation that they named Crest Financial Services.
Keysell and Howden had known each other for many years, and specialised in different areas within the realm of financial planning. Howden’s practice focused on investment and retirement planning, while Keysell’s strengths lay in risk management and business insurance.
As a team, they could therefore offer their clients a wider range of services and build their business by referring clients to other planners within the same practice, without having to send them elsewhere.
Having grown a little, the door was open to grow a little more, and Keysell hooked up with another old business associate, Wayne Perkins, who ran a financial advisory practice in Maitland. Keysell and Howden were based in Newcastle, but Perkins’ practice enabled them to spread their wings further afield, and a third financial planning practice joined the Crest amalgamation.
Now, Crest Financial Services is capable of offering specialist financial advisory services in four different areas: investment, retirement planning, risk management, and superannuation. Its coverage extends from Newcastle and Maitland to Port Stephens and the Hunter Valley, with one adviser based in Sydney to deal with referrals from accountancy practices.
Accountancy referrals form a supplementary business stream at Crest, with five accountancy practices now using Crest to provide financial planning services to their clients.
Earlier this year, the trio received a gratifying pat on the back from the wider business community, when Crest was selected as a finalist in the 2002 Telstra small business awards — an acknowledgment that flies in the faces of those people who said it would never work.
“Legal and accountancy practices had merged before, but it was unique for financial planning practices to merge. People said we wouldn’t be able to bring in so many different personalities and see the venture through, and this was our biggest challenge — mixing personalities,” Keysell says.
“When you bring three businesses together, you have to be open-minded and prepared to say ‘maybe their idea is better than mine’. We have one say each, we are not a dictatorship.”
Each year, Telstra and the Australian Government recognise and reward businesses throughout Australia for operating innovative enterprises and contributing generally to the wider business community.
In New South Wales, five awards are granted based on size, and Crest was one of four finalists in the category for small businesses employing between five and 20 staff.
Keysell says the judges were impressed by Crest’s ability to mix three very different businesses and make them work as one.
At the very beginning, Keysell and Howden set down their goals for the next five years.
Three years on, they’re right on track and ahead of themselves in terms of hitting targets set out in the five-year plan.
But Crest’s outlook for growth extends far beyond its five-year plan. The company’s expansion into Maitland was not just a strategic move to grow the group’s geographical presence, it also gave the practice the strength and equity to invest in a cadetship program to select and train successors.
“We decided this would be more valuable than selling the practice when we’re ready to retire,” Keysell says.
“Crest will be more valuable in years to come than it would be when we are ready to sell. This way we can remain involved with the firm after we retire and earn an income as consultants, which is preferable to just holding capital to fund our retirement.”
Crest has taken on two cadets, and is looking to take on a third, with each cadet ultimately specialising in a different area of the practice.
“We offer our cadets a financial package and potential shareholdership, in addition to a future interest in succession — very few practices in Newcastle can offer this career path,” he says.
There have been some hiccups along the way.
Two years ago, Crest was forced to close its general insurance business, which had been operating without the necessary expertise and licensing requirements at a time when the market for general insurance was getting tougher.
Keysell and his board of directors decided to outsource the business, but this didn’t solve the problem.
“We couldn’t give clients the right service because we were subject to someone else’s timeframe.”
So, they decided to launch the business themselves again — this time with the right personnel.
And it worked. Crest’s general insurance business reopened in February this year and by June it was already running at a profit.
Staffing is another challenge. This is an industry where quality staff can be hard to find, and harder to keep on board. To make sure employees know they’re valued, Crest has installed a system for training, setting goals, and reviewing and rewarding performance.
The Crest team is comprised of around eight advisers, eight administrative staff, and five board members, and staff at every level are encouraged to complete sections of the Diploma of Financial Planning to gain a general understanding of the industry.
Crest holds its proper authority through dealer group Charter Financial Planning, which is part of the AXA Group. It is happy to pay for dealership services, and is adamant that its independence is not compromised by its affiliation with AXA.
“We prefer to outsource to the experts, so we can maintain our focus on financial planning and retain our independence as a registered financial planner,” Keysell says.
Crest launched a new marketing program this year, but with growth already up 30 per cent for the year, any further investment in advertising will be held off until the new year.
For the moment, Crest is sitting tight and focusing on servicing its existing 4,000 clients.
“We are focusing on an elite market, targeting middle management and businessmen who want to move upwards, and right now we want to strengthen our existing bases rather than expand geographically again,” Keysell says.
Crest’s story is one of continued growth. Now that the challenge of consolidating three practices is over and done with, the firm can concentrate all its resources on gaining a stronger hold over its local client base.
