Project Description

One of the most common complaints about Canberra politicians is they seem to spend too much time talking about themselves rather than getting on with actually doing good for society. In a lot of ways the financial advice industry suffers from the same affliction.

I find the conversation around the financial advice industry becoming a profession somewhat loathsome and perplexing. As an industry we would have to be one of the most regulated in Australia thus not satisfying a key criteria of being a “profession” making the notion somewhat comical. I do think that standards need to be dramatically improved across the industry in a range of factors however ambitions should be directed towards outcomes that are actually achievable. I’ve been an active financial advisor for 20 years and I’ve decided to think about what drove me and determined the framework in which I have made decisions over that time.

In my childhood I spent a few years in a New South Wales country town known as Wauchope. It is referred to as the Timber Town and indeed had a tourist attraction that was named exactly that. I always remember there was a wood turner located there that would be working all day in his workshop and people could come in and watch him do his thing.

Naturally, out the front of the workshop the end result of his efforts were there and available to be purchased. Even as a child it became evident to me that it was impossible to capture all of the time, care, experience and workmanship that went into producing these beautiful items through an appropriate price. The craftsmen took great pride in his work and would continue to spend a lifetime learning his craft.

I guess when I think about how I live my life it’s the craftsmen that I aspire to be. Not only do I do formal training but I read and watch anything and everything that is relevant or irrelevant to what I’m doing. Every year of being a financial advisor makes me a considerably better financial advisor than I was 12 months earlier.

The entire financial planning playbook that I work through has pretty much been learnt through my clients and their experiences in addition to my own. However, the ultimate measure of the craftsmen is the pride that they have in their work. Craftsmen would never leave a subpar outcome as acceptable because a craftsmen knows that the end result reflects upon them. A craftsman only produces and distributes things that are finished to the expected standard and which they are proud of.

My view is you don’t have to be considered to be part of a “profession” to act professionally.

On the contrary a couple of years ago one of the loudest adviser voices in social media circles was big noting how virtuous he was because he charged a fee for service. Unfortunately, the said person had a client who had made a complaint that had coincidentally come across my desk which gave me the opportunity to review the advice.

I found it absolutely deplorable. In fact this adviser was giving advice around a basic strategy by piecemeal and insisting that the client pay further fees to receive the next part of the puzzle. Stipulated methods of how to charge clients and illusions of virtuousness wrapped in the garments of being a profession are not enough. We need to go above and beyond to get the outcome that is required not simply talk about it.

Whilst my career has many matters that reflect my striving to be the craftsman and will continue to do so for the next 20 years there is one instance that my clients still refer to and I probably consider my defining moment as an adviser.

During the GFC an unlisted property trust that had 15,000 mum and dad investors in it with over $1 billion worth of funds was effectively mismanaged after being in existence for nearly 20 years. As the same incompetent management who got the fund into trouble were looking to save face and receive their golden parachutes the bankers were circling to wipe out the investors.

As someone who had a significant amount of exposure for our clients I found this situation quite distressing but it also made me quite mad that those that had caused the trouble were simply jumping ship. This situation didn’t reconcile with me and I was determined to try and make amends no matter how slight.

Accordingly, I’d touch base with a colleague by the name of Andrew Meakin who I knew could assist me in seeking an appropriate resolution for the client’s. As it turned out I became the advocate for all retail investors inside the fund and acted as a conduit for financial advisers to influence the process with a team of dedicated individuals who had the same mission as I did.

For two years we spent a lot of time and effort being part of a team to get the best possible outcome we could for investors. Whilst I did not earn one dollar worth of income from the exercise I definitely learned a few things along the way but more importantly I took responsibility for my part in the position my clients found themselves (as a result of taking my advice) and attempted to rectify the best I could.

From this exercise we overthrew boards and got to tell senior bank executives to “try it” when they threatened to sell us up which in a perverse way was kind of fun. It was out of this mayhem that the dealer group of Shartru Wealth was born.

In today’s world it is too easy to jump on social media and to put some feel good post with some throwaway comment to give ourselves the feeling that we are making a difference, that we are doing good. Words are only as good as the actions that back them up.

In my view the financial advice industry needs to start getting fair dinkum about its actions and what we stand for as licensees, financial advisers or whatever role we play. We need to lift our technical knowledge and be far more engaged in the actual process of seeking what our clients want rather than chasing ideologies and talking about ourselves.

Unfortunately, I have had more than my fair share of the legal system and the behaviour of lawyers. If I can choose to aspire to be either the lawyer or a craftsman in his workshop it is the latter that I will pick every day of the week and twice on a Sunday.

Cheers

Rob Coyte
CEO Shartru
1300 478 424
rob@shartru.com.au