Evolution of a new Partnership

Late last year, Mercantile Mutual announced the engagement of its two accounting based financial planning groups. Stuart Engel discovers a very different regime at the newly wedded group.

On April 1 this year, Advisor Investment Services and Bleakleys vanished. But this was no April Fools Day prank, it was the culmination of six months of careful strategic planning and some very difficult decisions for ING Financial Planning's senior management team.

The day was a major watershed for the group. Not only would two of the most familiar names on the financial planning landscape disappear, but about 300 advisers would also lose their proper authorities held with the two former groups.

Many of these 300 predominantly accounting-based practices have maintained a relationship with the group formed by the marriage of the two dealers, Partnership Planning. However, the relationship is on a different footing.

Despite the drastic reduction in adviser numbers, Partnership Planning general manager Mike Walker is confident revenue of the group will soon reach the levels achieved by the AIS and Bleakleys combination. But more importantly, Walker says, the group now has a sound basis for sustained profitability.

Before Walker took the reins at Partnership, he was a key player in the team that devised the new strategic direction for Bleakleys and AIS to address what Walker refers to as "the dilution of the profitability of the businesses". In other words, there were a large number of advisers not writing enough financial planning business to maintain profitability of the group overall.

"Within Bleakleys in particular, there was a very long tail of proper authority holders who were not delivering the level of productivity that we were looking for," Walker says.

"Of course, there were also a number of very focused planners who have since joined Partnership."

So what is different about Partnerhip Planning? Bleakleys and AIS already had a centralised service provider in Austplanners which was also the holding company for the two groups under the old Mercantile Mutual structure.

Walker says one the key differences between Austplanners and Partnership is the transparent relationship between the level of dealer split (proportion of revenue split between adviser and dealer group) and the level of service provided by the dealer.

"Before the restructure, Bleakleys advisers were paying more for essentially the same service as the AIS advisers," he says.

Walker says Partnership is also more focused on the challenges facing accountants as they move into financial planning. He says most other accountancy-based financial planning groups, which include PIS, Premium, Count and Lifespan, have not addressed the needs of accountants moving into financial planning.

"Accountants are bogged down with GST and BAS and are now working more and earning less. They have recognised they must get into financial planning but many dealer groups don't understand the accounting culture and mindset," Walker says.

"Financial planning has tried to change accountants and mould them to financial planning. But what we need to do is customise our business systems for accountants to build on their inherent strengths. We are trying to position ourselves as partners of accountants offering the best elements of both professions."

Walker says the inherent strengths of accountants include professional outlook, credibility in the public's eyes and exceptional loyalty from their clients.

"Partnership aims to develop the marketing, investment and client service skills of the accountants to the level of top flight financial planners," he says.

"We give accountants joining the business a turnkey solution to entering the financial planning profession."

Part of the turnkey solution includes installation of the high-end Visiplan financial planning software, a 14 module training course and a centralised paraplanning facility, alongside high quality dealer support services such as research, compliance, business development and technical support.

Bleakleys and AIS planners played key roles in the development of the new structure. The advisers pushed for better software, Partnership gave them Visiplan. The Bleakleys advisers complained of the lack of parity in dealer splits, Partnership gave them the same dealer split as the AIS and RetireInvest planners. Both the AIS and Bleakleys advisers wanted to capitalise on Mercantile Mutual's (now ING) investment in website technology, Partnership is to roll out its own intranet site shortly and an Internet site by the end of the year. The advisers also said they wanted to continue the equity participation program set up under the Austplanners structure which has been agreed to by Partnership's management.

Walker says that while he is positioning the group as a partner for accounting and, to a lesser extent, legal firms, he is anxious to ensure that the 30 full-time financial planners in Partnership are also developing their businesses to their full potential.

Partnership will embark on a drive to recruit more advisers to the group later this year. It is in talks with the Australian CPAs and the Institute of Chartered Accountants with a view to establishing alliances.

But most importantly Walker says he is developing strategies for what he is positioning as a new dealer group.

"I only want to look forward. I respect what Adviser and Bleakleys were, but I want the door to those days to be closed. I want Partnership Planning to be recognised as a force in the financial planning arena in its own right."