Garrisons guns for growth

Garrisonswas once owned by the publicly listedChallenger International, with Kerry Packer as a shareholder. This situation has changed — and the Packers are now the major shareholder in a still-publicly listed company.

Garrisons managing director Kim White says the change of ownership has been positive for the dealer group.

“We are a stand-alone business (in Challenger Financial Services) and the new team really understands financial planning,” he says.

“The outcome is when we explain our strategic plan, the new management team really makes the connection, which also underlines the upstream value that is created from financial planning.”

The change in the company has impacted positively on the way Garrisons operates, according to White.

“It has been a smooth transition of ownership and the new management hasn’t imposed a particular style on us,” he says. “If we are good enough, Garrisons will run its own business — and that is making us comfortable with their support and direction.

“In short, the new management knows, understands and is supportive of our business.”

White admits the Garrisons planners expressed concern initially about being straightjacketed by the new regime, but the response was the planners could continue as normal. The only direction was to continue to build the premier dealership in Australian financial services.

Last year, Garrisons grew by 45 planners, which White says is manageable. In this financial year, the dealer group hopes to add another 65 planners.

“We feel that 65 was the number of planners we want to add without stretching our current resources or dropping current levels of service,” he says. “It is an ambitious plan without being aggressive.”

The growth in planner numbers will come from two areas. Some will be new practices or franchises started by disaffected planners who no longer want to work in institutions. The other area of recruitment will come from smaller practices that want to join a dealer group, or are in the start-up phase.

“We are looking to increase the footprint size of practices. We see the new planners as tucking in with existing practices,” White says.

“There could be three or four planners working independently, but by sharing infrastructure they gain significant economies as it is a practice footprint, rather than a geographical footprint.”

However, Garrisons is also looking for planners to fill holes in its geographical spread and is looking for planners with a track record of best practice across all areas of financial planning.

“They would need to have three to four years experience in the case of start-ups and they would then tuck in with more experienced planners,” he says. “We are also looking for well-established sole practitioners who are disillusioned with a parent due to cultural changes.”

White says the organisation has been increasingly very selective on who it admits to the Garrisons network.

“People we have spoken to and have agreed to join us have to be a good fit in the culture of Garrisons,” he says. “John Sikkema (founder) created a traditional set of values and that culture is still very strong in Garrisons.”

Part of that culture arises from where Garrisons positions itself in the financial planning marketplace.

It has aimed at delivering quality advice to the mass-market accumulators and independent affluent clients. White says the group is not chasing high-net-worth individuals.

To enable planners to work in this area effectively, Garrisons has built a strong practice of support team and systems.

“One of our key strengths is our practice development work,” he says. “This work covers all components of running a business; it is accepted the planners understand the investment and advice side of their businesses. So our support focuses on gaining business efficiencies and strengthening client service.”

Garrisons has built-up its support with manuals, an extranet and templates to handle the many aspects of running a successful business.

“Implementation is the key,” White says. “It doesn’t matter how many manuals or templates you have, making it work with on-ground support is critical. We ran a feasibility study as to how planners can move into accountancy firms as part of business development and the program is well developed with numerous success stories.”

The dealer group has also built a data warehouse for its operations through subsidiary company Synergy Capital Management Ltd.

This has involved looking at client information and seeing what income is generated and then applying this to practice management issues in a planner’s office.

“We also use this for commissions and this data is also fed into the warehouse,” White says. “It is also linked to human resources, so you can show what an adviser earns — the revenue from clients and future earnings potential — which enables us to show variances that then can be dealt with by one-to-one coaching.”

This information is being linked to a new web site for Garrisons’ advisers, which will play an active role in professional development. This is also supported with a professional development team recruited for their business experience rather than financial planning expertise. However, they do have an understanding of the issues and day-to-day operations of financial planning.

“The background of our practice development staff is business development and accounting,” White says. “They advise purely on the business side of a firm and they have no ambition to become advisers.”

The data warehouse has also allowed Garrisons to build a very clear picture of the franchises’ practices, he says.

“It will enable the practice owner to drill down into the key drivers of their business, compare the performance with best practice and have a much better understanding of strategies to adopt in business plans,” he says. “In addition, the system will significantly enhance the overall Garrisons compliance regime.”

By building this knowledgebase, Garrisons, and the planners, will move more towards a continuous compliance regime, rather than the traditional desk only audit program that takes up so much of their time.

“We believe that it will be industry best-practice in terms of quality and compliance,” says White.

When an adviser joins a new dealer group, often their clients can be affected, as they are forced to switch to a new platform.

Garrisons prefers its advisers to use the Synergy master trust and Galaxy wrap, but new advisers can continue to use their current platform for existing clients.

White admits switching platforms often creates lots of unnecessary work for the adviser and may create tax issues for clients.

“It is better the adviser keeps running their business efficiently rather than spend loads of time transferring clients,” he says.

There is an air of transformation at Garrisons and that is also extending to professional development days and conferences. White says conferences are real learning exercises, where planners are expected to work.

“This also applies to the professional development days,” he says. “These days are now a focal point for planners to build skill sets and experience.”

White says he can see the trends developing where advisers will need to prove their continuing competency with formal testing procedures, and the new-look professional development days are working towards that goal.

Vital Statistics: Garrisons

Established:1984, Tasmania

Services:Full suite of dealer services

FUA:Approx $1.6 billion (note: excludes part-owned entities)

Staff:55

Planners:162

Clients:28,000

States:Queensland, New South Wales, Victoria, Tasmania, South Australia and Western Australia (limited)

Offices:74 franchises, 11 associate offices, and 7 satellite offices

Ownership:100 per cent Challenger Financial Services Group

Key figures:Corporate

John Sikkema (chairman); Kim White (managing director); Lloyd Simpson (head of dealer services)

State

Terry Forrester (western region); Tim Lane (southern region); Steve Hinton and Carolyn Bindon (Queensland); Colin Williams and Sharon Watkins (NSW)

Preferred platform:Synergy

Research:Internal team and van Eyk Research