Inside the Dealers 17/08 – Life agents make good as planners at MLC

When MLC life agents went searching for a home they didn't have to look very far. MLC Financial Planning set up shop in 1988 and has been providing dealer group support for its traditional life agents ever since. Julie Bennett reports.

In the words of MLC Financial Planning's general manager, Greg Miller, MLC's business has grown up more from the inside than the outside and one of its aims, even today, is to help people from a life agent background to make the shift to financial planning.

"The average age of our planners is 50," says Miller. "Which is higher than most. These are people who just wrote risk and super business - we help them to make the transition to financial planning, which is difficult for them."

This is one of the things Miller says differentiates the group from other dealers.

"Not all dealer groups cope well with the risk side of the financial planning business," he says. "Our MLC people see that while they might now write risk business, if they don't start offering more they might lose their client base."

Another point of differentiation, according to Miller, lies in MLC's consistency.

"We believe we have consistently delivered good service and improved those services. We have a strong business focus offering advisers good on-the-ground support staff in every state. We also support regional Australia with five dealership staff in South Australia and Perth. This support is good for the planners' businesses - and consequently, good for MLC."

MLC Financial Planning offers two levels of proper authority holders - one level sells only MLC products while the other has a full approved list of managed funds and direct equities. A few planners also do mortgage work, but planners wanting to offer direct equity and mortgage services must have extra education and prove competency in the area.

All of MLC's 280 planners run their own businesses, employ their own staff and build their own client bases through a business relationship with MLC.

Commissions, trails and fees are split between the planner and MLC along a range of ratios - the low rate is 70/30, the highest is 95/5.

Miller says MLC's history as a life company explains the fact that advisers serve around 300,000 clients, mostly wealth accumulators.

"Our advisers concentrate on those people who need wealth protection," says Miller. "They write a lot of risk business, a lot of super business - so they deal primarily with wealth accumulation clients. A small number work with retirees and consequently have allocated pension and annuities business."

MLC offers its advisers support service in areas like marketing, research, education and training. As a result of PS146, the group is also running a consolidated Diploma of Financial Planning (DFP) course.

"All MLC planners will have to complete the full diploma in future," says Miller.

"And so we now have workshops for DFP."

The group has fulltime training managers who run a range of training programs in the major cities.

"We also train in software and through our internet site," says Miller. "We have regular professional development days and we ask our planners to do regular continuing professional development assignments. They download the assignments from our website and research their answers. It takes about 20 hours. Even planners with DFP must do these assignments."

Planners are also supported through a technical hotline and computerised knowledge base where all relevant legal and technical information is kept on database. To ensure compliance, every MLC planner undergoes an audit via a Business Ethics and Practices Program at least once a year. The program is conducted by a team called Business Review that undertakes a number of compliance and due diligence procedures on MLC's behalf.

Should planners wish to leave the group, they can transfer the income stream from their clients to another group, providing they haven't been terminated for inappropriate behaviour. And MLC offers to buy the practices of any planners who decide to retire.

"We have just introduced a business equity valuation system for people inside MLC," says Miller. "If they want to retire, we will buy their business for up to four times the annual ongoing revenue renewals."

To become an MLC planner, Miller says new recruits must make a real commitment to the group.

"Basically 99 per cent of the business is placed with the MLC group," he says.

"That means recruits need to say they are looking for MLC as a business partner." And Miller believes that the group's marriage to the National makes it an even more attractive partner.

"We believe that there will be a large range of benefits available to MLC planners from the National. In particular, access to home loans, margin loans, business banking and on-line facilities. All of this and no fundamental change to the relationship. For MLC planners it will be business as usual."

Vital Statistics:

Dealer group name: MLC Financial Planning

Number of advisers: 280

Funds under management: $3 billion

Ownership: The National Group

Founded: 1988

Location : Head office - Sydney; state offices in all mainland capital cities, planner offices throughout Australia

Names of Key Personnel: Greg Miller, general manager

Research: internal, van Eyk, Assirt, Morningstar

Master trust/wrap service: MasterKey, Flexiplan

Next conference: August