Basic principles lead to success

This often gets overlooked when a large corporate reports that their business is experiencing unprecedented growth. The matter is that, without advisers, many companies in the industry will be at a loose end.

In an effort to highlight the important role the adviser plays within the industry, FAnews will be doing a series of articles where we will hear what are some of the tricks of the trade when dealing with clients and taking your practice to the next level.

 

Barry O’Mahony, CFP ®, the 2013 Financial Planning Institute (FPI) Financial Planner of the Year, feels that there is no need for advisers to get over creative. If they stick to basics and establish their businesses with four important corner stones, they are already on their way to achieving success.

"At the end of the day, we are here to serve the client’s needs. This should always be our main focus. We also need to remember that we are all professionals. The minimum standard in our practice for anyone giving advice is to be a CERTIFIED FINANCIAL PLANNER® /CFP® professional. For us it is only the starting point for any adviser. Our clients pay us well for the service and we need to ensure they are dealing with planners that hold the best qualifications and skills available in the industry.”

The second corner stone is building a model which will provide the public with the necessary products and services in the best possible manner. O’Mahony founded Veritas Wealth in 2004 and started the business with what he believes is the correct business model. "We charge our clients a fixed fee for financial plans and we charge them a negotiated ongoing fee, which is facilitated by the product provider.”

The third corner stone is establishing a business philosophy which focuses on integrity. O’Mahony points out that Veritas’ financial planning philosophy is called Lifestyle Financial Planning, which they believe is absolutely correct as it is simple and clear to advisers and clients to understand.

O’Mahony points out that the fourth cornerstone reaffirms the business principle that clients need to be at the heart of the business. "Everyone says they do it, but do they? We very often talk against ourselves and allow income to go elsewhere, as we think it is in the client’s best interest. It is also a way to build a referral, which is our lifeblood,” says O’Mahony.

 

One of the changes which could be caused by the much talked about Retail Distribution Review (RDR), is that product providers might lose some of the control that they have when it comes to dictating industry remuneration. This is one of the aspects that O’Mahony says that Veritas Wealth Management would like to see, adding that the client and adviser must negotiate themselves where the product provider can facilitate the process.

 

"We are guessing that government are going to introduce some form of product in the retirement space and at the low end of discretionary savings. This means that no advice will be needed in this market. What the media have not really realised is that it then means there will be a huge need for advice in the middle to upper market,” emphasises O’Mahony.

 

O’Mahony concludes by saying that the big players will go direct to clients, but financial planning is not about distribution. Advice is all about adding value to clients over time. It is about giving their money meaning. It is about freeing clients up to get on with their profession or life knowing that you have got their affairs in order.