Grass is greener on the PIS side

Three years ago, it was a small blip on the financial planning radar screen. Today, Professional Investment Services is a powerhouse of financial planning and has plans to grow even further. In the first instalment of a new series that aims to give advisers the lowdown on what it is like to be part of Australia’s leading dealer groups, Stuart Engel investigates the rise and rise of Professional Investment Services.

Three years ago, it was a small blip on the financial planning radar screen. Today, Professional Investment Services is a powerhouse of financial planning and has plans to grow even further. In the first instalment of a new series that aims to give advisers the lowdown on what it is like to be part of Australia’s leading dealer groups, Stuart Engel investigates the rise and rise of Professional Investment Services.

Professional Investment Services managing director Robbie Bennetts readily ad-mits that the group he presides over had a turbulent birth. But in the same breath, Bennetts is quick to point out that the dealer group has quickly established a loyal relationship with its 217 advisers and a solid reputation among accountants.

Just over three years ago, Bennetts was a senior executive with Mercantile Mutual financial planning subsidiary Advisor Investment Services (AIS). What followed was “a parting of ways”, according to Bennetts, which saw 15 Queensland-based Advisor Investment Services planners join his new group within weeks of its es-tablishment.

Since then, a further 45 AIS financial planners have defected to PIS. While these planners are predominantly from Queensland and northern NSW, a number of AIS planners from other states have also signed up.

Despite the large number of defections, AIS managing director Wes McMaster has made it clear that the number of financial planners at AIS continues to grow.

So what has attracted the former AIS planners plus the other 150 planners to the group?

Price has not been the primary offering to potential advisers, however Bennetts says PIS offers “one of the most generous commission splits” among dealer groups. The exact nature of this split varies and works on a sliding scale depending on the amount of business written by the individual adviser.

Bennetts says the difference between Professional and other dealer groups is its commitment to growing each practitioner’s business. PIS not only provides the standard research, compliance and training services, it also offers advisers a com-prehensive marketing program to build revenue.

Bennetts says advisers have grown their revenue bases anywhere from 50 to 150 per cent in their first year with the group.

“Just over two years ago, an adviser moved states to join us. We placed him inside an accounting firm and he ended up with $500,000 in gross commissions for his first year,” he says.

Bennetts attributes the success to the accountant referral service offered by the group.

PIS management actively work to build strategic partnerships between advisers and accounting groups operating locally. This may involve a close working relationship between the adviser and one or two local accounting firms or it may mean that the financial planner is situated within the office of an accounting practice.

PIS has only been able to offer this service through Robbie Bennetts’ long-term relationship with the accounting profession. He has been a speaker at Institute of Chartered Accountants conferences for the past 10 years and has also been very active educating accountants on the ground.

However, there is no point getting the business in the door, if the processes are not in place to handle the increased activity. PIS not only has business development managers out on the road kicking the tyres on the advisers’ businesses, it also has developed relationships with master trust groups to reduce back office headaches for planners. PIS is one of Navigator’s top customers and is also a heavy user of the Asgard master trust as well as its own master trust - a re-badged Connelly Temple offering.

Another carrot dangled by PIS management to attract advisers is the opportunity to take an equity interest in the dealer group. About 50 accountants and 34 financial planners have taken up the opportunity. The 84 advisers each own less than 2.5 per cent of the group while Bennetts owns 17 per cent.

But not just any adviser can hang the PIS shingle out in front of their practice and expect to part own the company. Only advisers who are committed to the group’s rigorous training regime and committed to financial planning are given the green light.

Most PIS advisers come from an accounting background. Some accountants who have approached the group have been reluctant to undergo financial planning training provided by PIS, believing their experience and education are already suf-ficient.

“We have had to say no to a number of accountants who have refused to undergo the training,” Bennetts says. “But we have a responsibility to our clients and the other planners within the group to maintain quality standards. In fact, when ac-countants start with the group we do not allow them to write the plans for clients until we are convinced they have reached certain quality standards. We have to en-sure that the Professional Investment Services name has a reputable name well into the future.”

Looking ahead, Bennetts says PIS will continue its phenomenal growth over the next two years. He says the number of planners under the PIS banner will nearly double over the next two years to about 400. Funds under administration is likely to rise from its current level of about $1 billion to about $2.5 billion in that time and the group is expected to be writing about $1 billion of new business a year by 2002.

But while Bennetts predicts the meteoric rise will continue, he says he will not al-low the pace of growth to exceed the increase in the support provided by PIS man-agement and support staff. There are currently 27 support staff and managers on board and Bennetts says this is likely to double in the next few years.

Some pretty high profile names make up the management team at PIS including former AMP Adviser Services managing director Bill de Steiger, former AMP and Suncorp executive Greg Whimp and former Suncorp and Macquarie executive Stephen Poole. The group has also contracted the services of former BT Funds Management executive Pat Cunningham and retired judge David Ashton-Lewis (retired).

Whatever direction the group takes over the next few years, Bennetts says he will continue to form relationships with new advisers and strengthen already good ties within the accounting profession. He won’t be drawn on the exact nature of his next strategic move, but one thing is certain, it won’t be boring.

Watch this space.

Vital statistics

Advisers: 217 (95 per cent work within accounting practices)

Funds under administration: $1 billion

Ownership: Robbie Bennetts (17 per cent), 50 accountants, 34 financial planners (no single planner or accountant owns more than 2.5 per cent)

Founded: 1996

Key figures: Robbie Bennetts (managing director)

Bill de Steiger (strategic development manager)

Greg Whimp (general manager)

Master trust: badged Connelly Temple master trust. Also close relationship with Navigator and Asgard master trusts.

Research: Primarily FPI but also ASSIRT.

Last conference: Singapore