A personal message from Managing Director of Empire – Raymond Pecotic

16 August 2018
Matthew Hughes

What positive can we draw from the Royal Commission into Banking, Super and Financial Services?

A great opportunity to really highlight the difference between good and bad advice!


Avid news followers will probably be aware that a Royal Commission has been launched into the Banking, Superannuation and Financial Services Industries. There are however many who take a more passive approach to following the news, so I thought it best to share a bit of an update and our thoughts on the process so far.


There were no doubt enough questions and concerns raised to justify such an investment of resources that a Royal Commission requires, and to date, the inquiry has not disappointed in highlighting many of these.


The segment of enquiry into the financial advice space has so far revealed some examples of terrible advice, and many instances of not delivering on the service and value proposition that has been promised and paid for.


While perhaps gobsmacking to the average consumer, to those working in professional advice firms competing with this segment of the market and the stereotypes they conjure, it is not surprising.


Every day we have people come to us who have previously been clients of such organisations and we can see the result of simple, transactional, product focussed “advice”. We also spend lots of time explaining to prospective clients and the wider community the difference between that type of transaction, and the full, proper, professional, comprehensive advice that we deliver.


The timing of this enquiry is critical. More and more Australians are requiring advice, and often are confused about who to turn to.


The positive that we can draw from the findings of the last month is that we can now more easily identify what constitutes proper and professional advice from the alternative. This inquiry and its findings are therefore very important.


As a reminder to those in our network, and for you to share with any friends, family or colleagues who may seek your guidance or a recommendation to a suitable adviser, I’d like to remind you of the following ways we differentiate ourselves from some of the practices being discussed over the last few days:


  • We have flat, fixed initial and ongoing retainer fees, decoupled from the value of the invested amount, and determined independently of where the funds are invested. We were pioneers and have adopted this approach since 2009, well before regulation and legislation required a rethink of how advisers were remunerated. We embraced this model because we wanted our advice and how we were remunerated to sit separately from how much money our clients came to us with. We like to say we are “asset class agnostic” – as long as the timing and type of investment is right for your circumstances, we keep a very open and objective mind to where and how funds are invested, and those decisions are not driven by commissions or kick backs.

  • We take a “Strategy First” approach to financial advice. Our advice is not product or investment focussed, but strategy focussed. Where are you now, where do you need or want to be, and then modelling out mathematically the steps required to get there. Our value is derived from identifying efficiencies, analysing your income and expenses, tax structuring and keeping you on track to your goals, rather than through the facilitation of a “product”. Strategy is first – any financial instruments required to help you get there are a very distant second (and maybe even third or fourth) place.

  • Our ongoing review process is proactive. All of you will know that we will proactively contact you, and continue to follow up on locking in dates for our regular scheduled reviews. This is important to keep you on track and for us to demonstrate value and justify our relationship.

  • Our education standards are well above the norm for the industry. We believe that in order to present ourselves as professionals, robust education standards are required as a pre-requisiste. All of our advisers and paraplanners have either Commerce or Business degrees, as well as some with Masters in Financial Planning and other post graduate qualifications. Our staff have shown a dedication to the financial advice profession through investing in their professional training and qualifications. They are career advisers, not “flash in the pan” product pushers.

  • We take a team approach to all client management. We are not a one person outfit, or run as a co-op of individual advisers sharing resources. All our clients finances are managed by a team of at least three different experienced and professionally qualified team members at any one time, with sometimes up to six people managing different aspects of your affairs. This results in a very strong internal cross checking and accountability process. Our system does not allow for rogues or lone wolves.

What does all this mean?

Our last survey of clients, conducted independently by the Beddoes Institute, resulted in an overall Practice Satisfaction rating of 91%, including scores of 93% for Technical Expertise and Articulating Value and a 94% for Practice Adviser Trust Score.


This is not surprising given that 93% of respondents also said they would, or already have, referred their friends, family or colleagues to us.


And that is the greatest endorsement of all of the quality of advice and guidance we provide, and the value that we add.


As always, our door is always open to assist you, and if you’d like to discuss this any further, please do not hesitate to give any one of our team a call, or ask to speak to me directly at any time.


Raymond Pecotic B.Com. Adv Dip Fin Serv, AFP
Managing Director

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