Inside the Dealers 20/07 – Forging a pact that won’t be discounted

Targeting both large and mid-sized accountancy groups with its national network of financial planning systems, PACT is progressively building upon its $1 billion worth of funds under advice. KATE KACHOR reports.

Stones have been thrown and toes crushed in the battle between accountants and financial planners in recent years. But in the war between the brown cardigans and pin-stripped suits, PACT counts itself a winner.

An Australia-wide network of accountants offering financial planning services, PACT sits snugly under the Sealcorp banner. It has 290 proper authority holders and some $1 billion funds under advice with accounting practices in every state and territory operating under its dealer licence.

Sealcorp's director of sales and distribution, Dan Powell can only guestimate the number of clients the network now serves, tossing up between 12 or 13 thousand.

Powell says the company, which began in 1993 is completely accountant focused.

He says 'PACT is financial planning for accountants'. It is a company who focuses as much on practical aspects as well as tailoring services to the individual needs of each accountant and their practice.

"We show accountants what to do rather than telling them what to do," he says.

"We are based on extensive in-house service, to take their business into a financial planning process rather than trying to tell them how to do it."

For accountants who want to own their licence and practise, PACT offers Dealer Support Services encompassing, software, research, technical support, administration systems compliance and brokerage collection.

PACT offers many other services including para-planning, a technical services hot-line and, most recently, a commitment to providing a Buyer Of Last Resort Facility. This will provide a pay out of up to 2.5 times gross recurrent revenues.

Powell says all services within the company are backed by the Sealcorp network, including training and compliance.

PACT's para-planners, of which there are five are the company's financial planning service. The para-planners are called in when the accountants need plans to be done but don't have the time.

"We have a focus on accountants, as well as seeing that the clients are the clients of the accountant. This basically means if the accountant decides to leave, that individual accountant can take their clients with them," he says.

"We have a fairly open agenda within the company. We are targeting both large accounting groups nationally as well as mid sized practises. We are not targeting sole practitioners as we just feel the amount of time of running an accounting practise and financial planning practise, will always find them stretched."

PACT operates on a fee for service basis and offers rebates on commissions. For the large part these fees are on a "fixed dollar basis" not on a percentage split.

In exchange for a fee, PACT offers each practice investment research and Assirt planning software, Asgard fund administration, recommended lists, technical expertise and support, training programs, legal and compliance services, marketing support and business systems.

The company's services revolve heavily around using smart administration systems and the adoption of on-line technology to deliver efficiencies. This now includes free access to adviserNET.

To keep up with regulation and education changes PACT has its own internal training team.

The team has four professional development days, additional workshops a yearly convention. The company also provides software training, planning training and technical service training. All PACT's services are provided to clients through in-house means.

"A lot of people talk about outsourcing. There are some 'pros' with outsourcing, you can get professionalised services, but for us keeping it in-house we can offer a packaged solution," he says.

Powell says although accountants are currently receiving a lot of attention from new players offering all sorts of enticements, accountants need to look at the total package on offer.

Adding to its packages PACT this month launched new services offering succession planning options, financing packages for the acquisition of financial planning businesses and has made PACT a life broker.

"The need to deliver a strong life insurance platform has never been more important. We intend to build new levels of support in this area and broaden the range of insurance offerings and services," he says.

"As with most dealerships facing changes under the forthcoming CLERP 6, Pact has launched a Life Brokerage Service this month to meet the forthcoming changes."

PACT Business Development Managers play a key role in encouraging accountants to speak to one another and share experiences good and bad.

"Our BDMs are familiar with the various methods Accountants have utilised in introducing financial planning into their practices. Accordingly, accountants who have relied upon this sharing of experienced have, on the whole, been more financially successful,' he says.

VITAL STATISTICS

The number of authority holders?

290.

Ownership?Sealcorp Holdings

Research company's?Assirt for risk products we use Life research, managed and shares we use Assirt equities research and solomon smith barney.

Funds under advice?approx 1 billion.

When founded/established?1993

Wrap accounts/ master trusts?We have Asgard for master trust, Asgard trustee account and that is a custodial service.

Key figures?CEO Ian Knox, Technical services training and paraplanning, Tim Gunning.

Next conference?In May 2001.

<I>PACT is an Australia wide network of accountants who offer financial planning services. As part of the SEALCORP Group, PACT accountants, or Associates, can use the Group's resources and expertise to provide quality financial advice to their clients.