Banking on a broad range of financial services

Hartley Poynton started as a stockbroking firm 45 years ago, but since then has grown into a company offering a broad range of services across the financial planning spectrum. Nicole Szollos examines the Hartley Poynton management style.

It has been a big year for Hartley Poynton. The group has added four new offices around the country and relaunched its e-commerce division into a separate business. The group also recently acquired two firms: Pembroke in Queensland and Herbert P Cooper in New South Wales and Western Australia.

But the investment banking and brokerage business that is the foundation of Hartley Poynton remains truly independent as it services the investment needs of Australians.

The group traces its beginnings back to 1955 when the man who gave the group its name recognised a need for stockbroking advice in Western Australia and set up the service in Perth.

In the four-and-a-half decades since, the firm has developed into a group that now offers financial planning services along with the stockbroking advice, plus an e-commerce business with outsourcing solutions.

According to Hartley Poynton chief executive officer Tim Moore, the group's investment style incorporates an active approach to managing investments, with balance as the key to a successful portfolio model. He says the group looks beyond investment strategies that are either too passive or too aggressive.

"The belief is that the conservative unit trust, a passive financial planning model or an aggressive trading stock model, are wrong. The Hartley Poynton preference is the portfolio model approach," Moore says.

To offer a balance of portfolios, Moore says Hartley Poynton planners might advise some of their 100,000 clients to invest in unit trusts, while for others asset allocation may be more in line with other objectives.

Hartley Poynton has 550 people employed in 16 offices around five mainland states. This number includes 200 advisers all paid by salary, eight paraplanners who write plans for advisers and about 90 support staff.

Ownership of Hartley Poynton is fairly diverse, with the Royal Bank of Canada (RBC) holding a majority 40 per cent stake. Software company Solution 6, an associate company of Telstra, own 15 per cent and remaining ownership is made up of directors, staff and general public.

Research for the group is based on an internal team of 17 researchers. The in-house platform is combined with data from one external research group, Australian Equities Research (AER). Moore says the research concentrates on a value-based role of investment.

The group's target client has $250,000 or greater in financial assets to invest, but Moore says this is not a requirement.

"We will open accounts for people who have less than this amount and we're not hesitant about that. Some of our best investors have started out with only a couple of thousand," he says.

Moore says Hartley Poynton follows a referral driven model when approaching their target clients and planners are taught to ask for referrals.

"Hartley Poynton is a discreet brand," Moore says, "so we have no advertising and supplement referrals with national seminars".

"We have found that wealthy people, when looking for a good adviser, are more persuaded by good referrals than by advertising campaigns."

Once clients are established, advisers maintain a close relationship with them.

"Client contact is higher than generally expected in the industry. Our advisers are talking to clients on a weekly basis, sometimes twice a week," Moore says.

The technology arm of the group has experienced such significant growth that in May this year it split from Hartley Poynton to establish a separate business under the brand JDV. In July, the publicly listed holding company changed its name from Hartley Poynton Limited to HP JDV, to acknowledge the two groups.

As Moore explains it, Hartley Poynton has two models of planning.

"In one model we own the customer and employ the adviser, in the second model we assist other dealers in interacting with their clients by providing technology and outsourcing."

The outsourcing business offers share trading and other e-commerce solutions and already has some big clients including AMP, Suncorp Metway, BankWest, Solution 6 Holdings and MLC's Your Prosperity.

Last month Charles Schwab Australia became the newest client, signing up for a deal that included JDV's trading engine known as stockhighway.

As head of Hartley Poynton, Moore says the group prides itself on several aspects including the technology of its desktop program. He says new advisers to the group have reported that the Hartley Poynton technology system is better than any other.

Training is the other area Moore is serious about, and says a lot of money is spent on an intensive training process.

"We believe the most important part of arrival is the induction," he says.

The Hartley Poynton training procedure involves a 12-week program that follows a workbook style series. New planners spend time working with different advisers in the various areas of the business before they can become a property authority holder. This is followed by the week long 'rookie school', where planners are briefed on the group's philosophy and culture.

With such a heavy emphasis on training, the group follows through with its recruiting process.

"We look for diversity in all areas such as age and experience to get a blend of people, as well as a focus on individual aptitude and enthusiasm."

Although training is a strong feature of Hartley Poynton, Moore says they are reluctant to take on graduate trainees.

"We tend not to recruit graduates, unless they are mature age, as we believe that you need at least three or four years life experience before you can take on the responsibility of a planner," he says.

Moore says Hartley Poynton is easily distinguished in the market by its independence and the fact that it does not manufacture any products.

It is also easily identified by its practice of starting off a client with the best investment, then sorting out the administration.

"Too much of the industry is configured to administration and the result is that planners are led down the path of swaying investors to easy investments so easier administration can be put into place."