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The Money Makers

Neil Kendall has a simple explanation for his job. “I am the money worrier,” says the Brisbane-based financial adviser. “I worry about money so the clients don’t have to.” Money worriers and, as we label them in this issue, money makers: that’s a succinct summary of the role of advisers in an increasingly complex world.

Kendall, from Tupicoffs, is one of about 20,000 advisers in Australia and among the 50 who have made it onto the inaugural Top 50 Financial Advisers in Australia list compiled for The Deal by US publication Barron's.

These “money worriers” are part of an expanding market, thanks to increasing demand for help on complicated financial products, especially those involving superannuation. That complexity has tested the competence of advisers, and the sector has been tarnished in recent years with a string of scandals and revelations of poor qualifications. In the decade since the 2008 Global Financial Crisis, Australia, like other jurisdictions, has worked hard to address the issues and increase regulation. From 2019 federal government legislation will impose new education standards on all financial advisers.

Already, of course, Australian consumers have access to many expert practitioners and our list celebrates the leaders in the sector. Everyone on the list has satisfactorily answered a string of tough questions about their operations. The survey for the list was designed and administered by Barron’s based on decades of experience running similar surveys in the US. The project was assisted by an advisory board of key figures in the Australian financial services sector.


Every adviser reviewed by the survey answered more than 70 questions covering client assets, fees generated on assets, size of staff (relative to client list) professional credentials and a range of other key factors.

In common with the original Barron’s survey in the US, we have opted not to include portfolio performance returns because performance is based on allocations and these differ for every client depending on what they want to achieve.

The list shows that advisers can just as easily operate in the suburbs as the skyscrapers of the CBD. Their firm may be one of the better-known brands of financial services in Australia, such as AMP or Shadforth Financial Group, or an operation rarely mentioned in the financial media.

The issue of whether an adviser is aligned or not – that is, whether they are affiliated to a major institution – has long been a critical one in the debate around financial advice. It goes to the heart of consumers’ concerns about whether they are getting independent advice. But our survey shows good advisers come from either camp. Indeed aligned planners have made it to the top of the tree in our survey, with Marc Smith, one of the top-ranked advisers in the market, aligned to BT Financial Group.

Even so, a large number of the top planners work in independent outfits, and there is a significant cohort from firms that were launched as breakaways from bigger companies. The list includes advisers from Escala Partners, formed from former UBS staff, and Hamilton Wealth Management, which began on the floor of NAB Private Wealth. There are also strong signals the ranks of independent planners will grow most rapidly in the years ahead. Already in 2017 there are reports more than 400 advisers have left the major banks due to limitations on staff recommending products offered by rivals. At the same time, several highly ranked planners operate entirely independently and have no links – current or historical – with major financial service groups.

Our advisers typically service a few hundred clients, though they may only handle a few dozen. Many advisers have no “minimum value of assets” requirement for their clients, but some have a minimum of $1 million or $1.5 million of “investable assets” that does not include the value of the family home.

This is an innately conservative profession and most practitioners are men. Only six of our top 50 are women. Indeed one of them, Nerida Hicks, from Bridges in Nowra, NSW, recalls that she did not think it was possible to work in the male-dominated financial sector when she left school. It would be some years before she got her start.

Our advisers operate from all over Australia – a number on our list are from regional cities – are of any age and typically have financial qualifications. The most common is the Certified Financial Planner degree, overseen by the Financial Planning Association and a globally recognised qualification. More recently, the CFP designation has been flanked by the internationally recognised Certified Investment Management Analyst (CIMA) credential.

Not surprisingly, there are many accountants on the list, along with tax advisers. There are MBAs, and plenty of MAICDS (Members of the Australian Institute of Company Directors), not to mention a smattering of some of the more exotic qualifications and professional designations common in this sector, such as Membership of the Association of Divorce Financial Planners (ADFPs).

Some advisers started their working lives in another field: for example, Doug Turek (see profile) is a Canadian who began his career with a doctorate in chemical engineering. “I had to retrain and find a new career when I came to Australia,” says Turek, who now operates in Melbourne.

Will Hamilton worked as general manager Wealth Services at NAB Private Banking before he teamed up with others – including Ian Gillies, a former country head of wealth planning at Credit Suisse – at Hamilton Wealth Partners.

Sally Huynh came to Australia from Vietnam when she was nine. These days she runs a successful practice out of Melbourne and also – in common with many on our list – does pro bono work, teaching the basics of financial literacy to groups in regional Queensland.

As a Vietnamese woman in a male-dominated profession, Huynh stands out. “Or at least I look very different from most of the people in a room full of advisers,” says the diminutive Brisbane-based planner.

The survey suggests many of the best advisers have two jobs: guiding their clients through the challenges of life’s key financial decisions, and building their reputation and the wider reputation of the sector. Almost all are active in the broader community.

Many work on improving the profession via legislators or through professional associations; others are involved with care and welfare groups. Tim Mackay has volunteered with UNICEF in Laos, Marc Smith has been on the board of the Vana Child Ministries in Zimbabwe, which cares for orphans in Africa. Mark Minchin has always been a keen kayaker and has spent much of his spare time coaching his wife Chantal, who took a bronze medal at the Beijing Olympics in the women’s K4 event.

Scott Carmichael, Mackay and Will Hamilton are among

those who already have a strong profile outside the industry. “I have a lot of opinions about how to make financial decisions against the background of both the markets and the financial structures we have to work with,” says Hamilton, who is a regulator contributor to The Australian.

Brother and sister Tim and Claire Mackay are well known as the next generation of Mackays in Quantum Financial, founded by their father Bill in Sydney in the 1960s. The siblings are active influencers on LinkedIn and other social media.

The advisers on the list generally agree that financial advice in 2017 has been heavily dominated by changes to superannuation rules, given the federal government’s sweeping changes to contributions and pension payment rules that began on July 1. However, for the majority of planners most of their time involves setting goals with clients and helping them reach those goals.

One of the biggest challenges is to offer a distinctive service in an industry where everyone purports to offer the ideal solution. As the finance industry struggles with reputational issues at the lower end of the market and the explosion of so-called “robo-advice” at every level of the industry, many advisers put a large premium on personal relationships. This may often entail advising not just one person, but a complete family or even generations within a family. As Doug Turek tells The Deal: “One trend we are seeing is a lot of generational skipping of wealth – a lot of our customers’ children have already made their wealth and bought their homes – so it’s going to be about the grandchildren.”

Turek also says the subject of professional qualifications “has always been an issue ... it really needs to be fixed”. It’s a sentiment shared by many in the field. With luck, a new generation of advisers will avoid the stigma of poorly qualified planners with the potential to damage the whole sector.

Dante De Gori, CEO of the Financial Planning Association, (the peak body for financial advisers) says a new education regime for planners to be enforced by law in 2019 will greatly improve standards. Under the regulations, every planner will need a university degree in financial planning and will be obliged to subscribe to a code of ethics. And the new rules are spurring the higher education sector to develop training in this field.

As De Gori says: “For as long as anyone could remember there were just 14 universities across Australia offering financial planning degrees. In the past year we have had 10 new applications from universities wanting to offer course when the new regime starts in 2019.”

Our top advisers long ago gave up the idea of making a living from commissions: product-based commissions are now banned in financial advice, with the exception of insurance advice.

Curiously, in the US, where the industry is enormous, with more than 300,000 financial advisers – and where the greatest financial advice fraud in memory occurred in the New York offices of Bernie Madoff – commission-based financial advice remains a feature of the industry.

However, more US advisers are turning to what has become mandatory in Australia – a fee-based service. Arguably, Australia is now ahead of overseas jurisdictions with its ban on commissions, though the notable exception for insurance commissions means we are still a long way from claiming a leadership position.

What’s more, Australia’s free market and open financial system means investors here have endless choice but little guidance when it comes to making the major financial decisions in life. How we choose our mortgages, or our life insurance policies, or our college education finance, is crucial to long-term financial success, yet much of the system in Australia remains based on selling products rather than offering advice.

With our mandated superannuation system, everyone is now legally obliged to save a substantial part of their salary for their pension needs, but the system offers us very little help when it comes to actually investing those savings.

The changes to superannuation rules introduced this month represent an extreme example. The changes are the most complex ever imposed on the super system and it is no exaggeration to say it would be foolhardy to engage with the new rules without first seeking professional advice.

What Australia’s legion of private investors need more than anything else is skilled professionals whom they can trust. Our list of financial planners is an effort to seek out top advisers who meet that need.

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