Dennis Bashford says there’s a two-part question every financial planner should ask themselves: How much time do I spend doing things my clients value, and how much time do I spend doing things they just don’t care about?
Last year Futuro surveyed its adviser network and over 90% of the respondents said the culture was the driving force for them staying with Futuro. Key to this culture is our Adviser Network Meetings (ANM).
Futuro Financial Services has expanded its management team with the appointment of Michael Frawley as National Manager of Advice.
Futuro needed a wide range of skills to fulfil this diverse role and recruiting for this type of role is extremely difficult. Futuro has always been patient and very selective about who it invites to become part of the team and as a result our management team has been together for a long time.
Non-aligned licensee Futuro Financial Services has announced it appointed a former Suncorp Financial Planning executive as its new national manager of advice.
According to his LinkedIn profile, Michael Frawley was previously Suncorp Financial Planning’s practice development manager.
Futuro announced yesterday it appointed Mr Frawley as its national manager of advice, which was a difficult role to fill.
Futuro managing director Paul Kelly said, “Recruiting for this type of role is always difficult because of the wide range of skills needed to properly fulfil the role and because Futuro has always been patient and very selective about who it invites to become part of the team.
“Looking for someone to take on the responsibilities of national manager of advice is difficult in that it requires someone who has had wide range of experience across virtually all aspects of the industry, from the actual management of an AFS licence through to an in depth understanding of compliance requirements as well as practice management.
“Not many have the experience or qualifications to take on this job so we see ourselves as being particularly fortunate to have found someone who can do the job, is a cultural fit and has such a great track record over his 23 years in our industry.”
David Favero remembers the portentous moment in his dad’s home office like it was yesterday.
It was, in fact, 15 years ago, but the recollection is crystal clear and freighted with the kind of poignancy peculiar to life-changing moments.
His father, Brian, who ran Favero Financial Services at the time, was anxious about the future of the business.
His clients were loyal and business was strong, but he was getting older and wanted to pass the baton at some stage.
Across the table from him, David, who could have been one of Brian’s clients, was ruminating on his own career.
“I was telling [Dad] I was a bit bored in my career, and things were getting stale,” David Favero recalls. “He was telling me he needed some fresh blood; and we just looked at each other and it dawned on us that we were the solution to each other’s problems.”
When David Favero graduated from university, he was reluctant to join his father’s financial planning business because he wanted to strike out on his own.
So he took a job in human resources and occupational health and safety at the Wagga Wagga Base Hospital, before finding a better fit as one of the trainers at the New Enterprise Incentive Scheme (NEIS).
“I loved it because I was helping people,” he says. “In my previous job in HR, I felt like I had just been pushing forms from one side of the desk to another. But in my role as an NEIS trainer, I helped people with their start-up businesses, and while not everyone succeeds, a lot of people do and that is gratifying.”
But after a decade in that role, having worked his way up to executive officer, there was nowhere for him to grow.
This time, his father’s business loomed as a viable, and much more attractive, option.
“I started [in Dad’s business] at the bottom, in admin and as a paraplanner, because I wanted to get to know the industry inside out.”
It turned out to be a timely move for the business. The FSR changes hit – to be followed by FoFA reforms. Suddenly, Brian Favero was inhabiting a very different planning world. He had to make the switch from insurance salesman to financial planner.
“He needed some new ideas and energy,” David says of his father’s business. “His clients took a while to get used to moving from being transactional and product clients to holistic clients. They weren’t used to being asked such personal questions.”
In 2005, Brian Favero suffered a heart attack and never returned to the business. He died some years later, but David knows his father was immensely proud of where he has taken the business.
“Between 2006 and 2009, we went through a massive growth phase, in which we quadrupled our revenue,” David says.
In 2016, he was named Futuro True Adviser of the Year for his dealings with a client who was diagnosed with Parkinson’s. The judges noted that he helped the man tick a number of things off his bucket list, as well as shaping his client’s financial direction at an especially vulnerable time in his life.
As for the future direction of the industry, Favero is hopeful, but notes the disruptive influence of robo-advice.
“For the DIY person, it will be very attractive,” he says. “But [a program] can’t sit across the table from someone and interpret the hopes and dreams of a client. They can’t read their body language. I do think they’re here to stay and [the trend is] going to get bigger, but I think they should be a complement to, and not a replacement for, holistic advice.”
About the Author | Johanna Leggatt
Johanna Leggatt is a Melbourne-based freelance journalist with more than 15 years’ experience in news, features, lifestyle, property, finance, books and arts journalism, across both digital and print platforms. She has worked at both Fairfax and News Corp publications in Australia, as well as in digital roles in London with The Daily Telegraph and The Guardian.
By Cut+Paste | August 17, 2016
Futuro Financial Services has announced the completion of a restructure of both the business and their executive team.
This has seen Dennis Bashford step aside as Managing Director and into the role of Executive Chairman. While these changes have been mooted for some time it has only been recently fully ratified.
Mr Bashford said Futuro has been looking to introduce a succession program that will see an orderly transfer of responsibilities and where everyone will be playing to their strengths. This has seen a significant restructure of both the business and the roles of the executives over the last 12 months. This largely entailed a redistribution of responsibilities throughout the management team. Mr Bashford said “It was important for us to be confident that everyone was capable and happy with their responsibilities and that their talents were maximised before making things permanent”. Mr Bashford went on to say that his business partner, Paul Kelly, who took over as managing director over 12 months ago, has despite the distractions caused by the implementation these changes, o done an extraordinary job over that period and has been instrumental in the success that Futuro is currently enjoying.
Paul Kelly, said that “Futuro is looking to exploit Dennis’s standing in the industry which will see his focus becoming much more strategic and considering that he has been in the industry since its inception we are keen to see his experience, contacts and knowledge being fully exploited. His change of role has already delivered significant value to Futuro and this will become patently manifest in the immediate future”.
Mr Bashford said he was more than delighted with the way the executive has stepped up to their expanded responsibilities. He also said that his retirement was not contemplated as he was thoroughly enjoying his changed role. In that, it required uninterrupted “think-time” which meant he now had a plausible excuse to spend more time on his yacht still add value to the business.
Thursday, 18 August 2016 12:30pm | By Kerrie Sydee | In Executive Appointments
Futuro Financial Services has completed a 12 month restructure of its wider business and executive team.
The restructure has seen Dennis Bashford step aside as managing director and into the role of executive chair. Bashford has now fully handed over the reigns to business partner Paul Kelly, who has been working in the managing director role for over 12 months now.
Bashford said Futuro has been looking to introduce a succession program that will see an orderly transfer of responsibilities and where everyone will be playing to their strengths.
“This has seen a significant restructure of both the business and the roles of the executives over the last 12 months. This largely entailed a redistribution of responsibilities throughout the management team.
“It was important for us to be confident that everyone was capable and happy with their responsibilities and that their talents were maximised before making things permanent,” Bashford said.
Kelly said: “Futuro is looking to exploit Dennis’s standing in the industry which will see his focus becoming much more strategic and considering that he has been in the industry since its inception we are keen to see his experience, contacts and knowledge being fully exploited.
“His change of role has already delivered significant value to Futuro and this will become patently manifest in the immediate future.”
Bashford said he was “delighted” with the way the executive team had stepped up to their new responsibilities. He said he had not yet contemplated his retirement as he was thoroughly enjoying his new role, in that it requires uninterrupted ‘think-time’ giving him a “plausible excuse to spend more time on his yacht and still add value to the business.”
Futuro restructures its team
18 August 2016 | by Oksana Patron
Independently-owned, non-aligned ASF licensee, Futuro Financial Services, has announced it has completed the restructure of both its business and the executive team, which saw Paul Kelly take over as managing director
He replaced Dennis Bashford, who would move to the role of executive chairman.
According to Bashford, the company decided to introduce a succession programme that would see a transfer of responsibilities and “significant restructure of both the business and the roles of the executives over the last 12 months”.
“It was important for us to be confident that everyone was capable and happy with their responsibilities and that their talents were maximised before making things permanent,” he said.
Kelly said: “Futuro is looking to exploit Dennis’ standing in the industry which will see his focus becoming much more strategic and considering that he has been in the industry since its inception we are keen to see his experience, contacts and knowledge being fully exploited”.
Bashford stressed that he was not contemplating retirement as he was “thoroughly enjoying his changed role”.
You’re running a successful financial planning firm and everyone you meet says why not get your own license? Do it your way. It sounds enticing. You are the master of your own destiny. You can do what you want, use any product and strategy and invest your clients in what you want without limitation. Keep all the revenue. Have greater control. All of this while, if you’re the responsible manager, trusting those giving advice under your license do the right thing because if not, ASIC talks to you. You can manage that risk.
There are any number of providers that will, for a modest fee, assist you in getting your license and provide you with all the templates and infrastructure, for you to modify, to run your AFSL your way. You just need to spend a bit of time setting it up, pay your professional indemnity insurance, join FOS and then you won’t have to do much again after that!
All of this can and does work well for some people. The reality is the fees to properly maintain a license, once you take your time into account, are probably no more or less than what a good licensee would charge a firm of your size. Indeed, Professional Indemnity insurance for new financial planning licensees has risen to about $18,000 p.a. a significant increase according to brokers in this space.
Recently Futuro and some of our advisers have been looking to purchase businesses. We have come to realise that what people are not told about having their license is the end game!
Most people won’t purchase an AFSL. The AFSL holds all the risk of some poor advice in the past that the buyer won’t want to take on. They will purchase the client base at commercial terms. Sound good?
As the owner and responsible manager of the AFSL your liability for the advice will last for 7 years after you have sold the business. You need to get run-off professional indemnity cover to offset the risk.
Getting run off cover is an issue! Whilst you may be insured under a company, that company may not provide run-off cover so you may have to get a quote from a new firm.
Next, the cover is likely to only last 12 months and you will need to renew each year. It gets worse, if you have a claim you may not get renewed and be left with the liability for the remaining years.
Finally, it’s not cheap and it does not get that much cheaper over the 7 years even though the chances of a claim are diminishing.
Where does this leave you? The value of your retirement dollar from the sale of the business is now being eaten up each year by the cost of the run off cover. You’re still at risk that a claim can happen and heaven forbid if you get more than one claim you are now running the risk of not being covered and are putting your life’s savings and retirement at risk.
Think about the end before you decide to get your own AFSL, it may cost you more in the long run and not be as enticing as think.
There has been a lot of industry discussion about Goals Based Investment advice. If an adviser can get a greater understanding of the real goals people want to achieve, and then design a realistic plan to assist the client in living these goals, the adviser will become a truly relevant person in the lives of his clients. The flow on from this become self-evident. Successful and happy clients can only mean more referrals and the ability to truly charge for the great outcomes being achieved.
Futuro has launched the first ever goals based fact find for its advisers to use. The Futuro fact find assists the adviser in really getting down to what are the meaningful goals that a client wants to achieve.
Futuro advisers identified that one of the main issues to be resolved was asset allocation. Traditional asset allocation is for all the assets over the longer term. How does this enable an adviser to truly match funds required for short and medium term goals to an asset allocation? It can’t.
A simplistic example, not taking into account any savings plans, highlights the issue. A client has in total $200,000 in investible assets and is a growth investor. As such the AFSL risk profile may say that the adviser would need to allocate perhaps 85% of the funds to Growth assets, $170,000 leaving $30,000 for other asset classes.
During the interview process the client wants $10,000 in cash for emergency. Has some short to medium term goals for meeting children education and holidays that will require $50,000 over the next 3 years and a further $30,000 in 3 to 5 years. This would mean that $90,000 needs to be allocated to an investment risk profile of less than 7 years, clearly this does not match the risk profile allowed. There is a clear disconnect between what the client wants, what the planner needs to do to meet the client’s objectives and deliver a meaningful plan, and what the licensee will require.
Futuro has taken the view that the ‘normal’ Asset Allocation process is designed for investing over the longer term, which is just one of the objectives and it is our objective as an adviser to get our clients to the point where their funds can be allocated fully into this allocation.
Right now we need to ensure that the clients realistic and meaningful objectives are met as much as possible and allocate funds into appropriate investment strategies accordingly to client’s short and medium terms goals.
The adviser will agree with the client to a ‘cascading’ approach to investing. As the short term funds build they will overflow into the medium term funds and fulfil these objectives and once these are fulfilled funds cascade into the longer term objectives. Over time the funds will eventually build to such a point that the long term asset allocation is met.
The result is that client and adviser work closely together to set realistic goals and plans. There is a true need to meet regularly to review progress and reallocate funds to meeting the client’s new objectives as they arise, tick off objectives as they are achieved and continue building for the longer term. Clients will feel their adviser truly understands their goals and direction and is actively working with them to meet their best interests. Advisers can charge more meaningful fees and truly give strategic advice.
More importantly, this approach forces us, as planners to in invest the effort in properly understanding the actual things our clients want out life. All surveys, without exception, in recent years have found that it is the relationship clients have with their planner that clients most value. Understanding what your clients wants at various stages in their lives, matching these goals directly to the allocation of funds in appropriate investment strategies must go a long way towards proving the value of the relationship.