NRMA drives home brand advantage
One of Australia's best known businesses also offers financial services and has a market brand and exposure unrivalled in the industry. Jason Spits looks at how the NRMA is using its size to drive more customers towards financial planning.
One of Australia's best known businesses also offers financial services and has a market brand and exposure unrivalled in the industry. Jason Spits looks at how the NRMA is using its size to drive more customers towards financial planning.
The average motorists does not automatically associate roadside assistance with fi-nancial services. When they do, it is usually parked alongside the costs that go with owning and running a car.
Alan Merten and Mark Danckert are quite content to leave that idea in place -but with additions. Both are working on an idea to expand the public’s perception of the group.
Merten is head of strategy for NRMA Financial Services and Danckert is national sales manager for the Financial Management arm, which covers the financial ad-visers.
They aim to have clients think of the NRMA as a full service provider for insur-ance, superannuation and retirement planning and even simple loan products.
The NRMA or National Roads and Motorists Association was originally formed as a motoring organisation in NSW in 1920 and has since expanded into Western Australia, South Australia and Victoria off the back of moves into general insur-ance.
NRMA Financial Services, the peak group for advice and products, is much younger and was formed back in early 1995 as the financial advice industry was coming into its own. Like much of the industry it grew out of the life insurance in-dustry. NRMA already had 14 life advisers on board when it made the shift to a wider range of financial services in 1995.
Numbers have since expanded to 42 financial planners nationally, four business superannuation consultants, and 10 life advisers are still writing business for the group.
About 100,000 clients use NRMA Financial Services products, however only about one in ten of those use the financial planning arm. There are about 12,000 clients being advised with more than $1 billion of funds under advice.
"The majority of the business we do at present is retirement planning. That type of customer is seeking advice at the present time and we are on organisation which appeals to them," Danckert says.
He says that this is also a natural market for the organisation but says they have not actively set out to target any group.
"More and more people are seeking financial advice and are aware of the need for good advice. We have been actively promoting that with our branch staff," he says.
Merten says this has been of enormous benefit in generating leads for advisers.
"These are all warm leads as people have chosen to come to us but more work can be done in building on this base," Merten says.
"It is this exposure to customers which is one of the main attractions for planners who join us," Danckert says.
In fact there is strong interest from other planners in joining the advisory arm with retention rates within the group remaining high. Only six planners have been lost in the past three years according to Danckert.
One other area of distinction is that all the planners and advisers are salaried em-ployees of NRMA, tied to the group through an employment agreement.
"This was not a deliberate idea but something which evolved over time. Fortu-nately it allows us better control over the quality of the advice," Danckert says.
"We like to stay close to the customer and so it also gives us a consistency in serv-ice, regardless of location. It also frees the adviser of some of the burdens they have in running a planning business."
Advisers joining the group still have to measure up to strict standards says Danck-ert. As a principal member of the Financial Planning Association (FPA), the NRMA has set strict controls.
"We expect them to reach full Certified Financial Planner (CFP) status within three years of joining regardless of background. Level one of the Diploma of Financial Planning (DFP1) is also the minimum just to get a look in," Danckert says.
"We are serious about the level of professionalism and look for experience in the areas we service, such as planning and insurance."
As such, Danckert says a banking background may not fit the bill nor is the group happy to take on an adviser's existing clients. Rather the adviser receives a portfo-lio of clients after placement in the branch network.
This arrangement is reflected in the training regime advisers go through after join-ing which includes administration procedures, compliance and familiarisation of products and services.
Further training involves individual sessions with sales managers as well as quar-terly two day training for all advisers.
"We encourage our advisers to attend external briefings and also use external fund managers to supply their expertise. At the same time, the advisers also need to gather 40 continuing education points in a year," Danckert says.
"Beyond that we don't have a great deal of restrictions. Since we employ good people we let them run their own lives. They know the boundaries so we let them get on with it."
Back office support is centralised from support bases in NSW, Canberra and South East Queensland, reflecting the major spread of the advisers and the branch net-work.
The support bases typically have administration, sales and management support as well as 10 paraplanners between them, which Danckert says provides the capacity to increase adviser numbers in the future.
The research for the group is headed by Tania South who says about 80 per cent is done internally with van Eyk's Fund Watch and Assirt used to cross check the final output.
South also says the research is kept at arms length from the greater financial serv-ices arm and supplies dedicated research for the financial planning arm only.
Danckert says this maintains the autonomy of the research and avoids any influ-ences from other parts of group.
"We run an authorised list which has seen an expanding range of NRMA products added as well as 13 other fund managers," Danckert says.
This mix has grown from simple life and bond products in the ‘70s to now include a range of retail and commercial insurance products including life, banking via NRMA Building Society, unit trusts and direct equities through Macquarie Equi-ties.
Merten says the future of the group is to find the right mix of customers, products and distribution channels to meet a range of different needs.
"Ninety per cent of our customer base is unaware of what we offer, so our main job is letting them know what we have as there hasn't been a real focus on financial services in the past," he says.
However keen Merten is to promote NRMA as a service and advice provider, he is also wary of putting a foot wrong.
"We are definitely into managed investments, but we do not want to be a big brand managed investments business," Merten says.
"We are also willing to use third party advisers who come to us but we are not chasing them as we are still conservative about brand protection. We are not going to create numerous relationships for only a small amount of business."
Name: NRMA Financial Planning
No. of advisers: 42 advisers (29 at full CFP level), 10 life advisers, 10 paraplan-ners, 4 business superannuation consultants.
Funds under advice: More than $1 billion
Start up date: early 1995
Research: van Eyk and Assirt
Next conference: Sydney
Key Figures: Mark Denckert - national sales manager
Anna Petrou - national financial planning manager
Tania South - research and technical manager
Rita Adams - operations manager
AUTHOR
Jason Spits
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