A country calling

It’s 8am and you’re on the way to work in a train jam packed with hundreds of people. Or it’s 9am and you have a meeting with a client in 15 minutes, too bad you’re on the M4 in traffic barely inching forward. Sound familiar?

If there was ever a better time to consider relocating to a regional town, then now is probably it.

It was once believed regional planners were second to their city-based counterparts on a number of levels, however, recent experience suggests this may no longer be the case.

So how does location affect a planner and their business?

Sea change

Rod Lavin began his financial planning career in Melbourne working for one of the major banks. Born and bred on the suburban outskirts of the city, Lavin would travel one-and-a-half hours to work each day in bumper to bumper traffic.

“I used to commute from Berwick into the city every day. By the time I got to the office I was already stressed and realised I had already done a hell of a lot of work, just to get to work!”

That was 12 years ago. Lavin now runs his own boutique planning firm in Gippsland, regional Victoria.

“I was in my early 30s when my boss told me they needed someone to take a position out in the country. At first I said no, but my wife was really keen on a ‘sea change’. So we went on the assumption that it would only be for two years. Twelve years later I would never, ever move back into the city,” he said.

“Now I live 15 minutes drive out of the township, with kangaroos bouncing around in the backyard, which my four-year-old daughter loves. This is the best thing I’ve ever done.”

Lavin is a rarity in the industry, as most planners in the city would never consider relocating to the country.

But according to the planners Money Management spoke to, once you do make the move, you would not consider going back.

The high demand for financial planning in recent years has not been confined to metropolitan areas; regional planners are all saying that business has never been better.

Growth occupation

Sole practitioner of Roan Financial in Orange NSW Peter Roan said the rapid growth in planning is not surprising.

“If you go back 10 or 15 years, financial planning was not as talked about as it is now. Most people are now investors, sometimes by default through superannuation, while demutualisation has meant share ownership has grown immensely in the last 20 years, so at some point in time they’ll need professional advice.”

Berry Financial Services Principal Julie Berry agreed. “I guess it’s a perception that most people in cities have. But you really can’t make generalisations about regional areas. Your opportunities are not nearly as limited as people perceive.”

Berry started her financial planning career in Parramatta, Sydney, before relocating to Port Macquarie to set up Berry Financial Services. She said the relaxed lifestyle that regional towns offer transcends to all parts of the society, including clients.

“We’ll often go to clients’ homes and do home visits, which builds not only a stronger client relationship but you feel connected to the community. The relationships we forge with our clients, and to some extent even their families, adds to the value we can provide,” she said.

“The clients out here like to meet face to face; they are not the types of clients you’ll be sticking stuff in the mail to. They like the traditional thing of sitting across the table from you when talking about their financial affairs.”

Roan said clients in regional areas are more discerning and will base their decision on the relationship they form rather than strictly on cost or a marketing gimmick.

“In the country, if you service your clients well then you’ll be rewarded with loyalty. I arrived here in 1994, and although it took a while to establish myself, I would now consider myself a local, and with all the benefits that designation entails,” he said.

Stronger ties

“Also, 95 per cent of all new business is via referrals. Given that, competition with other planners never becomes an issue. Unlike the city where you may be fighting others for clients in the same space, regional planners get more exposure. It’s rare that you’ll see a competitor’s client because once a client trusts you, they’ll stay with you,” Roan said.

Lavin believes that country folk are “genuinely much nicer and the relationships you can develop with clients are far deeper than those in the city”.

“When I was in Melbourne, because most of my clients used to commute into the city I would never see them outside of work. Now I can go shopping, or walk down the street and am constantly bumping into my clients. I remember once I ran into a client while shopping with my wife and daughter. The next time we met for business and every day since he will always ask about my daughter. This is really important when you’re forming lasting client relationships, which become far more intimate. That’s a huge upside because they’re no longer just clients, but can become friends; something I never got in Melbourne.”

Berry said there can be a downside to this intimacy.

“Reputation in a regional area, where everybody knows everybody, is extremely important. This can be a good thing or a bad thing for obvious reasons. If you lose your rep here, you’re gone.”

Broad service offering

One particular truism for all regional planners is that to be successful you need to provide a broad range of services; you need to be a generalist.

“You need to be all things to all people, or at least they expect it of you. In the city it’s sometimes more profitable to specialise in gearing or to service certain trades or occupations. But here you need to be multiskilled in all facets. So I’m lucky in that I feel I can offer my clients a wide range of products and services,” said Roan.

“It makes the job more interesting too and also means you’re a better adviser to your clients.”

Although technology and transportation has remedied some of the disadvantages of living in a country town, it is still fair to say that certain aspects of working away from the ‘big smoke’ persist.

Regional planners face different issues depending on their specific situations, so it’s hard to make sweeping statements that cover all of them, although two common themes are recruitment and succession planning.

Demographics of different towns can mean different things as well offer new business opportunities.

Recruitment lag

One problem that has persisted for many years is recruitment.

Trying to find skilled staff with direct industry experience is difficult enough in metro areas, and the problem is only magnified in the country. One planner Money Management spoke to had lost a planner and two support staff in just one month.

Chief financial officer with dealer group Count Wealth Accountants Michael Spurr said with more vacant jobs than people to fill them, demand for staff is just not being met.

“It’s always been a problem for regional firms to attract good quality planners, or even support staff and it’s a problem that seems to be getting worse,” Spurr said.

“Ironically, this is because the planning business is so good at the moment. Equity markets are good and super changes are creating strong demand. Organisations, especially the bigger ones, are offering more money, which makes it harder for regional firms to compete when trying to attract or even keep planners.”

Roan said he had lost three paraplanners (and potential advisers) himself since 2000.

“In many cases you cannot compete with the wages being offered in the cities, which can be ridiculously high at times. Our last planner was young and of the generation expecting high earnings straight off the bat,” Roan said.

“In the country you’ve got a very limited pool of quality planners to draw from, especially when most good planners are already established and wouldn’t want to move.”

General manager with ANZ Financial Planning Mike Goodall said that with over 100 planners located across rural Australia, they’ve had to work hard in attracting staff, with mixed results.

“It’s been a challenge. We have worked hard to attract planners over the past 18 months and have had a lot of successes in filling the spots we have. However, there are some smaller towns that remain difficult to place a planner in and we have resorted to the less than ideal situation of having planners visit on a rotational basis. The disadvantage of this is the fact that building rapport with the locals may take longer,” Goodall said.

“ANZ has tried to resolve this issue by having local banking staff always accompany the planner when meeting with locals. We’ve found that if the planner comes with the personal endorsement of the local branch staff, considered to be the ‘trusted advisers’ in country towns, the fact that the planner is not a local is overcome.”

Despite the opportunity and lifestyle benefits a financial planning career in regional areas can offer, generally speaking there has been a clear shrinkage in the number of practices, with many planners leaving.

Some blame financial services reforms, while others say it’s simply in line with general population movements.

A result of this trend has been that practices are merging in order to build the scale and volumes needed to be a commercially viable.

Succession issues

According to Roan, this issue is at the heart of problems with succession, something that affects planners nationwide.

“Traditionally, regional planners have operated as sole practitioners, but I think that’s changing. Now that large banks are developing good planners internally, at some point in time any sole practitioner needs to think about developing something that is saleable,” he said.

“The dilemma for country planners is that their name is the business. This can be a plus, but at some point in time a plan for succession needs to be developed.

“The question is, how do I create a corporate business? And how do I build my succession planning into my business? Or to put it another way, how do I get the money out? This is something all planning practices face, and is probably made harder being in a regional town.”

Another issue that came up continually is access to ongoing training.

On the road again

Now that financial planners are required to attend 30 hours of professional development training each year, which is usually located in cities, distance has been made more apparent.

“Where fund managers will put on events in the city, we don’t get much in regional areas. We did in the past, but it seems to have stopped for some reason,” Berry said.

According to Spurr, although larger regional towns attract fund manager road shows and other industry events, smaller towns are not so lucky.

“We have started to use technology to deal with this; and have trialled web-based training and will continue to enhance this. Fund managers do this as well as phone hook ups that allow regional planners to participate.”

Gary Jones, principal of Professional Investment Services Bendigo, believes the problem can be overcome with a little planning.

“As far as attendance at seminars and the like, it simply means that you need to plan your trips to Melbourne if that is where the sessions are. If the training is worth attending then add in some additional work for the clients that you have in that area and plan your time to suit.

“These days you can also keep your knowledge up to date through specific Internet training available from many sources,” he added.

The drought

Although most planners say the drought has had little financial impact on their businesses, some of their clients have been suffering.

Goodall said that “the drought has had an affect in the inland areas of Australia. People on the land will change their priority for allocation of funds, as investment in the future takes second place to the more immediate needs created by the drought.”

However, the drought has benefited planners in one regard. In regional towns financial planners can be considered highly respected professionals, and this has only been strengthened by the drought, where desperate farmers have turned to planners for support.

Community support

Jones believes planners in country towns have the opportunity to become important members of that community.

“Farmers are resilient people, but behind the scenes some of them are really desperate. Financial planning is important because it can prepare a farmer in these times. They need help with credit control, budgeting, restructuring debt and making sure clients receive the right entitlements.

“You need to look for strategies that will see them through the tough times. For instance, farming clients go through many ups and downs, so in good years you’d advise they invest and in bad times they should keep their assets liquid,” Jones said.

“So you do become an integral part of their financial decision-making. You need to be able to finetune and restructure, because this is a situation where every dollar counts.”

In the end, despite the problems that remain, all the financial planners Money Management spoke to were adamant in their love for working in regional towns.

According to Lavin: “I don’t care what anyone says, I’ve been both a financial planner in the city and the country, and it’s simply better in the country.”