Lifespan deals a first

If Lifespan Financial Planning director and co-owner John Ardino’s calendar doesn’t have a red cross marking the months of August and September, it should. The next two months are the culmination of nearly two years of searching and planning, and the red cross marks the fruition of the group’s new wrap product. It’s going to be a busy few months for Lifespan.

At last count, Lifespan’s proper authority holders numbered 203, spread around 150 offices throughout Australia. Two-thirds of these planners are accountants, the result of a concerted push by the group to recruit accounting firms and transforming them into financial planning firms. Lifespan either trains accountants to become certified financial planners (CFPs) or develops relationships between dedicated financial planners and accounting firms.

“Our ideal candidate is an accountant who studies to get the CFP, and we strongly encourage that,” Ardino says.

“Lifespan is selective about the financial planners we employ and in general accountants are more conservative and less aggressive than financial planners.”

But perhaps Lifespan’s most distinctive element is its recently forged relationship with one of the new names in financial services technology, Avanteos. Under the terms of the deal, Avanteos will provide Lifespan with a fully Web-based financial planning platform consisting of a package of planning tools and a portfolio administration system.

The front-end software, called the Omniport Planning Portal, includes a transaction and settlement system for shares and managed funds, a plan writer, modelling, research capabilities and a client management system. The portfolio administration platform, known as the Omniport wrap service, will be operated by a separate registered company.

The deal with Avanteos is the result of an 18-month search for a technology partner. Ardino says Lifespan “spoke to virtually every provider of badged wraps and master trusts on the market”.

He says Lifespan was keen to strike a deal with Avanteos, but it was not until the technology provider received a capital injection from Colonial First State that the alliance could be realised. Lifespan is the first client of Avanteos to offer the system.

“We knew of Avanteos and they were the preferred choice but until they were recapitalised with the CFS shareholding, it was not possible to obtain the product and the technology in the time-frame anticipated,” Ardino says.

The launch of the Omniport wrap service is expected towards the end of this month or early next month, depending on clearance from the Australian Securities and Investments Commission. Lifespan will offer the service to its own planners plus market it to small dealer groups.

Ardino says the wrap will be an open product on the market targeted to smaller dealers whose volumes do not justify the expense of their own badged wrap.

While Lifespan planners will be able to choose from a list of wrap accounts, Ardino is confident of a strong uptake for Omniport. Ardino says the platform is attractive to planners on a number of levels.

“It [Omniport Wrap Service] will be competitively priced relative to the leading software brands on the market,” he says.

Advisers and dealer groups will also be offered an equity stake in the Omniport wrap service operator company. Ardino says the shared equity strategy will promote adviser loyalty and foster growth of the business.

“I believe that major groups which offer only token equity or no equity in the products and services they support will be increasingly rejected by the market,” he says.

“The new technology of wrap accounts enables dealer groups to generate a substantial product manufacturers margin. There is a revolution in the market whereby an increasing number of advisers will want their share of those margins. Lifespan intends to be a part of that.”

Ardino says equity stakes will operate in a similar manner to co-operative groups. A prospectus will be issued with the aim to list the operator company, and equity will be shared on a pro-rata basis depending on the contribution of each adviser.

As well as providing the integrated front-end software system and wrap account, Lifespan is also in the midst of several other technology enhancements. A Web site is currently being developed in-house, as is a database to calculate funds under management.

“We are building a database that will run a number of systems, including brokerage. We already have a compliance database but we are beefing that up as well and integrating the databases,” Ardino says.

The new technology and improved compliance database beefs up the Lifespan’s compliance role.

“The main thing is all files, file notes, client data and plans will be on the Web and that does one major thing for a securities dealer, it’s called compliance,” Ardino says.

“Industrial strength databases, which will be employed here, will give us the ability to measure many aspects of our business and many aspects of compliance and the activities of our representatives.”

Ardino says the system will make it easier to check on the quality of plans and introduce a level of automation on the checking process.

Alongside the improved compliance database, Lifespan will continue to conduct its annual on-site audits for every office and will retain its method of withholding brokerage payment for non-compliance until a matter is resolved.

“In general that is a great spur to action and means people fix up compliance issues because they won’t get paid until any problems are fixed up,” Ardino says.

Training is another big issue for Lifespan, particularly with the upcoming introduction of IPS 146 requirements. Ardino says new planners from accountancy firms must sign a training agreement to complete all elements for IPS 146 expertise, namely DFP 1, 2, 3 and 5. These modules will need to be completed by July next year or the applicant will not be granted a proper authority under the Lifespan dealer group. Ardino says existing long-standing Lifespan planners will be given a choice of doing the recognition of prior learning process instead, but if they fail the challenge, they must complete the necessary DFP modules.

Lifespan provides six full days of training a year for capital city planners. The group also recognises the difficulty for regional practices to attend city-based training so in all non-metropolitan areas, Lifespan provides the Integratec video series.

Given Lifespan’s focus on accountants, the group’s training regime has been taken a step further with basic skills training that comprises an interpersonal element. Lifespan has recently commissioned the services of the Bellini group to run two-day courses for eight to 10 Lifespan planners, picked by Ardino. He says the training involves behavioural issues and uses role play for advisers to work through ways of relating to clients.

“We believe this sort of training is important when you move from accounting to what is in effect another culture. Longer interviews, wider discussion about client goals, it is a much deeper dialogue than they [accountants] normally have with clients,” he says.

Looking ahead, life is likely to be fairly busy for Lifespan. There’s the new Web-based system and wrap product soon to be launched and training sessions to implement. Every Lifespan adviser will undertake two days of training in the Omniport system plus a number of those will be involved in the interpersonal training. Add to that a new burst of involvement in marketing to raise the profile of the company. And in the middle of it all sits Ardino, comfortable with the Lifespan Financial whirlwind around him.

“Lifespan is still in an early stage of development, and independence is fundamental to our adviser base. Ownership is an issue that won’t come up for several years to come.”

BREAK-OUT

Vital Statistics

Name: Lifespan Financial Planning

Founded: August 1994

Dealer’s Licence: Own, Sept 1994

Financial Planners: 203

Research: Internal, plus Morningstar and van Eyk

Software: Avanteos technology, Omniport wrap service

Funds under advice: $750 million

Key Figures: John Ardino — managing director; Naide Ardino - director and office manager; William Tomac - research manager