Original bean counting group defies its imitators

A stock market listing, a new fee structure and a management team not afraid to speak their minds — there is never a dull moment at Count Wealth Accountants. Samantha Walker delves beneath the public façade of the group and looks at what it is like to be one of the 1,000 or so financial planners at Count.

A stock market listing, a new fee structure and a management team not afraid to speak their minds — there is never a dull moment at Count Wealth Accountants. Samantha Walker delves beneath the public façade of the group and looks at what it is like to be one of the 1,000 or so financial planners at Count.

"Barry had the vision that accountants were the best people to do this job and that really fires up all of our team, and it comes out in everything that we do, in the way that we think and the services that we provide to the accountants. Other people have come along and said 'OK, this is Count, and while they're successful, let's copy them'. But they don't have that same passion and they certainly don't have that same focus. They don't live and breath it like we do."

Kylie Lambert is sitting in the board room of Count Wealth Accountants' Sydney headquarters, across from her father and boss, Count managing director Barry Lambert. She is deputy managing director of the group and, as she talks about Count's vision, it is hard not to become enthusiastic with her.

The management team at Count Wealth Accountants have never been shy of ex-pressing their views on the fledgling financial planning industry. Their strong be-liefs have long been a thorn in the side of the Financial Planning Association (FPA) and they have served as front page fodder for Money Management on sev-eral occasions because of the voracity of their views and their standing in the in-dustry.

In fact Count, who were recently listed in Money Management/KPI Research's list of the top 100 dealer groups as the second largest dealer group in the country, fi-nally resigned its FPA membership two years ago.

"Part of the reason we resigned from the FPA was because we didn't want all our accountants lumped in with all these ex-life insurance financial planners and we wanted to really differentiate. We couldn't understand why accountants would want to add credibility to financial planners who are so intent on knocking down the status accountants have built. Accountants do have a higher status and they are more highly regarded out there by general society than financial planners," Kylie says.

Barry and Kylie Lambert are now convinced that the two accounting bodies, the Australian Society of CPAs and the Institute of Chartered Accountants, are in the prime position to oversee the future financial planning industry.

In fact, it is the belief that accountants make the best financial advisers which was the genesis of the group in 1980. Barry Lambert, an employee of the Common-wealth Bank during the day and a tax adviser of an evening, was taking notice of a new form of investment in the late 1970s called managed funds.

"I looked at what was happening in the industry and back then it was terrible. I felt that investors deserved better than salespeople. Having come from a conservative banking background, I decided that having accountants as advisers was the right thing."

Cut to 20 years later and Count Wealth Accountants' members number more than a thousand across the country, with more than $4 billion in funds under advice.

In order to be an adviser with Count Wealth Accountants, you must firstly be an accountant in public practice. This means you will have achieved three levels of study - a university degree, plus postgraduate accounting qualifications and extra study to get your certificate. Upon joining Count, you are then required to undergo a further four day in-house course, which focuses on topics such as superannuation and good investment strategies.

"Our course is the theory and how it is applied," Kylie says.

In fact, although Count has had compliance problems with the Australian Securi-ties and Investments Commission (ASIC), she is quick to defend the level of edu-cational standards within Count which she says "still exceed the FPA".

Kylie is also proud of Count's research capabilities.

"One of our strengths is research. It enhances our 'independence'. You can't be a mate of ours and get on the recommended list. For clients, they know when they see XYZ, then they'll get XYZ," she says.

Van Eyk Research provides all of Count's managed funds research overlayed by its own internal research committee.

The yearly fee to be a member of Count is $4500, which includes back office services and other value add-ons such as special leasing fees. All members are franchisees and charge clients on a fee basis.

"We were commission-based, then five years ago we said to members, 'It's time now to become fee-based' and so we have a scaled fee. And it doesn't matter what investment you recommend, you charge the same fee," Barry says.

The only exceptions are insurance and loan products, where commissions are built into the price. Count advisers do receive trailing commissions but "...our upfront advice is purely fee-based," he says.

Count is moving to becoming a no fee split dealer in relation to its wholesale in-vestments. Barry believes his group is the first to go down this path in Australia.

"Let's say there is a new accountant joining Count, who wants to offer reduced rates on the basis of how other people work through our wrap account. They go the wholesale route. We give them 100 per cent of their upfront fee. We give them 100 per cent of their review fee and after they have $10 million under management, we don't charge them our usual annual fee. Beyond that, when they get bigger still, we actually pay them to belong to Count. The reason for that is that we've built into the pricing of the Count wrap account a small fee with BT and because of our size and efficiencies, we can operate on that," he says.

For retail funds, Count will still take "a small percentage", but allow their members "the freedom to do what's right for clients, rather than push them into a product", he adds.

Count is also a supporter of InvestmentLink. Kylie has been working on having Count clients' retail funds online by the end of the year, with real time daily up-dates on the value of a client's portfolio. She is optimistic this will happen and says all of Count's client retail details are already on the InvestmentLink database.

However, the biggest advantage to being part of the Count stable has to be the up-coming float on the Australian Stock Exchange, scheduled for this November.

"The aim of the listing is to give equity to members and clients," Barry says.

The group has already appointed an external chairperson, Len Spencer, and is in the process of recruiting other board members.

Kylie says Count is hoping to offer options to members as an incentive for the amount of business written. She says, however, regardless of volume, all Count members will be better off because of the listing.

"All members will get something," she says.

Name: Count Wealth Accountants

No. Of advisers: 1017

Funds under administration: more than $4 billion

Ownership: Lambert family 90 per cent; Geoff Guest 10 per cent. Floating on ASX in November 2000.

Founded: 1980

Key figures: Barry Lambert, managing director; Kylie Lambert, deputy managing director; Geoff Guest, Victorian director; Len Spencer, chairman

Research: van Eyk Research plus internal committee

Wrap service: Count Wrap Account (badged BT wrap)

Next conference: Hobart