My way: the Lambert legacy

If Barry Lambert has his way, the Sydney Harbour foreshore will soon be graced by a new and unlikely corporate logo adorning the top of one of the city’s most iconic office towers.

Lambert is preparing to move his beloved Count into new digs at the original Sydney skyscraper Goldfields House — just up the road from that other Aussie financial services battler, AMP.

Currently waiting on the green light from Sydney City Council, Lambert hopes to bolt the fiercely independent Count logo prominently alongside the signage of industry giants AMP and AXA.

If he pulls it off, followers of the Lambert family history would appreciate the symbolism: Barry thumbing his nose at the institutional big boys in a lofty and very public manner.

Indeed, there have been recent occasions where Lambert has backed his own path in far less public ways — refuting the overtures of acquisitive big name bankers with the message that Count is not for sale.

Independence cannot be bought, he says. And Count should not to be confused with a “distribution” business. “We are in the advice business,” he says.

It’s unusual these days to find financial planning dealer group chiefs with business plans that openly eschew the big cheque parachute in favour of a long-term plan built on the principles of independence and business sustainability.

“Well, we’ve always said we’re in the advisory business, so we have to do what’s right for the client. But you can only say that and do that if you’re truly independent,” Lambert says.

“The minute you have your own product, you want to sell more of it because profitability relates to the product, and maybe you can subsidise the sales process because you want to sell more — compared with somebody else — to get rid of your product.

“So there’s a lot of price transfer in product you manufacture. That’s why you hear about all these dealers who don’t make any money, and that’s because when they’re owned by distributions, well, the money is made out of their product.”

Lambert says there has also been a prevailing — and worrying — attitude among non-institutional dealer operations to ultimately sell out to institutions.

But the Count dealer model, built largely on franchised accountancy practices, is making money. And its principals are indifferent to constant market rumours about impending takeover bids.

When Money Management caught up with Lambert recently he had just announced another solid financial performance for the ASX-listed business, delivering a $10.58 million profit for the period to June 30, 2004, and a franked dividend of 3.5 cents per share.

He was also putting the finishing touches on a new tranche of equity options to Count advisers — some 10.85 million in total.

“We release another tranche every year. And if Count’s successful, I [the dealer] make money out of it, and it helps keep us independent. The equity is the asset.”

For his own part, Lambert admits he has “more money than he can poke a stick at,” but that his motivation these days is to devise new and innovative ways to keep delivering equity value to Count’s adviser members without diluting the existing stock. Independence and a system of formalised, in-house succession planning for Count franchisees is another key objective of the Lambert game plan.

“The reason for our success is primarily that we’ve just always taken a long-term view and we have hung in.

“I’ve always believed — and you’ve got to have a cause — in championing accountants, because I believe that would create more competition and it would be good for the industry overall.

“So that’s been the major driver of why I am still here. Now I want to create a model whereby we can go on forever independent of product manufacturers.

Buried in the back of the annual report (“nobody bloody reads it,” he despairs) is the detail of Lambert’s modest salary: a grand $769.00. Together with superannuation and a one off cash bonus, the Lambert remuneration package comes to a modest $55,198.

But with some 53 million shares (33 per cent) of the company, Lambert can afford to work without a fat pay cheque. Count’s share price at the time of writing was $1.04.

The big question on the minds of shareholders and the market, however, is: ‘how long will he stay on board?’

The annual report contains a carefully worded message from Count chairman Len Spencer, who, in his 70s, is also thinking about the group’s senior succession plans. It says that Lambert has indicated his willingness to remain as managing director until 2006, and thereafter as a director.

Lambert, now 58, will be first choice to take over from Spencer.

In January, Kylie Lambert announced her retirement from Count after 13 diligent years spent as understudy to her father. Was Barry disappointed that a key family member and obvious successor had decided to call it a day? “Yes, but that’s life.”

In March, Marianne Perkovic was appointed a director of the company after taking on the role of chief operating officer at the time of Kylie’s departure in January. Perkovic is seen as the obvious front runner to succeed Lambert come 2006.

If the bright young economics graduate is successful she will have big shoes to fill, even despite spending the past six years in strategic roles inside the Count bunker.

Lambert’s greatest business decision?

“Well, really, I’ve always had a vision that we could be something, and I always wanted to help accountants. But each year that target has evolved and the business direction evolves.

“You get all sorts of influences and directions; now we’re so strong in where we want to go, and all the staff are involved in our vision.

“We don’t get tempted [to sell out] because even if I went mad and wanted to do a deal, I’d have all my staff saying, ‘Barry, that’s wrong’. We have an open door policy — I’m nobody. They [the staff] just come and talk to me and say, ‘look, we shouldn’t be doing this’.

Come 2006, the Lambert legacy would be well and truly stamped on the Count internal company culture.

But in the meantime, there is much to do. And in typical fashion, he has a fair bit to say about the state of the industry. A vocal critic of the Financial Planning Association (FPA) throughout much of the 1990s, Lambert boycotted the FPA as he saw it as a trade organisation, not a professional body. He was persuaded to bring his Count group back into the FPA fold after much lobbying by former chief executive Ken Breakspear.

“Ken kept chipping away, chipping away,” Lambert says.

So is Barry, who once famously described the FPA’s educational showpiece, the Certified Financial Planner (CFP) designation, a “Mickey Mouse standard”, an FPA convert?

“That’s a good question,” he says.

And that’s about as non-committal a response you’ll ever hope to get from Barry Lambert.

Bruce Madden is a director of BlueChip Communications Group. His interviews with key industry figures will appear each fortnight in ‘Money Management’. Write to Bruce at [email protected]