As the principal of Personal Financial Services, Angela Martyn CFP® is at the coal-face of COVID-19 restrictions in Melbourne. She talks to Jayson Forrest about how the pandemic has changed the way her boutique practice now operates, and reveals what the future looks like for small planning businesses on the other side of the coronavirus pandemic.

Name: Angela Martyn CFP^®

Position: Principal and Founding Director

Practice: Personal Financial Services

Established: 2001

Licensee: Personal Financial Services

Financial planners: 2

Total staff: 3

FPA Professional Practice: Since June 2013

Nowhere has the effects of the coronavirus pandemic been felt as deeply as in Victoria, with Melbourne in particular facing the brunt of severe lockdown restrictions. Since March, Victorians have been under some form of COVID-19 restrictions, with the much tougher ‘stage four’ restrictions kicking in across metropolitan Melbourne in early August.

And while the Victorian premier, Daniel Andrews, has recently outlined the state Government’s roadmap for exiting lockdown, the nine months of restrictions has exacted a heavy toll on the Victorian economy, including on many small businesses.

Just ask Angela Martyn CFP^® – the principal and founding director of Melbourne-based Personal Financial Services – who has weathered the severe COVID-19 restrictions, while representing the needs and concerns of independent planning businesses in her role as President of the Boutique Financial Planning Principals Association (BFP).

“Running a business has been undeniably tough this year, particularly for many smaller practices,” says Angela. “As a consequence of the restrictions in Victoria, like many businesses nationwide, we’ve had to rethink our business model and adjust to working remotely. This has presented small businesses, like mine, with challenges and opportunities.”

An obvious consequence of working from home has been the loss of direct personal interaction with staff and clients, while there has also been the balancing act between working from home and family life to manage. This has created some unexpected issues, particularly for individuals who have children being home schooled.

“If there is no clear delineation between work and home, it can be a struggle for some people, particularly if there is no separate home office from which to work,” Angela says. “But it’s a situation that most of us have had to deal with at some time this year.”

A silver lining

However, despite these obvious challenges of working remotely, Angela believes that from a business perspective, there has been a silver lining to COVID-19, with a clear benefit being workplace flexibility.

“These prolonged restrictions in Victoria have encouraged business owners to focus on doing things differently, which has led to a number of opportunities, like providing staff with workplace flexibility,” she says. “And while it’s not our preferred option, we’ve proven in our business that we can work remotely and still be effective.”

Surprisingly, Angela says the restrictions in Melbourne hasn’t affected her practice’s ability to service its clients, with clients accepting of some delays as a result of the restrictions.

“We have remained connected with our clients through our Zoom calls, which they have really enjoyed. This has been a definite upside for the business, because it takes our client relationships out of the corporate office and into our own private homes, which seems to have made our conversations with clients more personal and relatable.”

Another silver lining Angela is quick to talk about is the uptake and use of technology.

“The fact that we can effectively manage client meetings via Zoom, means that some clients, particularly our older clients, will most likely prefer to continue to do this type of online meeting post COVID, rather than battle traffic and travel into the city where our practice is located. Our clients have become quite relaxed and accepting of our Zoom calls, which has been transformative for our business.

“And it has also provided some staff, who weren’t previously in client-facing roles, with the opportunity to step into more direct communication with clients. That’s been terrific for improving their skills and confidence, and from a business perspective, it provides longer term client sharing capabilities.”

As a business owner, Angela has noticed that her practice has become more savvy using technology solutions for managing client transactions, like using digital signatures and mFunds to avoid filling out lengthy documents.

“And because we conduct weekly social staff meetings over Zoom, I’m finding that we’re able to have more in-depth conversations. These social chats promote great staff engagement and connectivity. It means staff aren’t isolated, which means you can actively support those team members who may be struggling working from home,” says Angela.

“We’ve fostered a real belief amongst our team and clients that we’re all in this together. We have maintained this positive attitude right though this long period of COVID-19 restrictions, which as a business, has made us stronger.”

Angela adds that another aspect to the pandemic that has benefited practices in Victoria has been the more flexible approach ASIC have taken to industry regulation. The regulator has acknowledged the difficulties the lockdown restrictions have caused for practitioners and clients in Victoria, by issuing no-action relief on fee disclosure statements and renewal documents.

“This was a welcome announcement,” says Angela. “Australia Post had been very slow in delivering the fee disclosure statements and client service agreements that we would normally send out on 30 June. So, we’ve been increasingly using electronic means and digital signatures to get around these delays.”

Boutique Financial Planning Principals Association

Along with her responsibilities as a principal and business owner, Angela wears a second hat as the President of the Boutique Financial Planning Principals Association (BFP). The group, which was established in 2002, was formed to specifically represent the interests of boutique, independently-owned financial planning firms operating under their own AFSL.

The term ‘independent’, says Angela, means that the AFSL business is privately-owned and not part of a financial institution, and ‘boutique’ refers to the small number of financial planners that members generally have working within their business.

It’s in her capacity as President of the BFP that Angela has seen firsthand how the pandemic has affected small financial planning business owners nationwide. Thankfully, from what she is hearing, these businesses have been nimble enough to re-organise their remote working capabilities and implement changes to technology.

“As BFP is a collaborative group, our principal members have been actively sharing ideas on what they are doing, how they are doing it, and what technology they are using.”

However, while Angela concedes that some members have had issues with funding the infrastructure needs of their staff working from home, overall, she reports that small business principals are managing the business aspects of compliance, client advice and overseeing the delivery of services quite effectively.

She points to one of the benefits of belonging to the BFP, which are the discounted services offered to members through a range of third-party providers. Angela says by using the group’s buying capacity, it is able to leverage some significant discounts for its members.

“These discounted services can be a considerable cost savings for members, particularly when they are just setting up their AFSL.”

However, as a direct consequence of the coronavirus pandemic, Angela is pragmatic to accept that there will most likely be a drop in income for many small practice owners, as they focus on their existing client-base, rather than chase new clients.

“The focus for BFP’s members has remained on existing clients and existing referral networks, rather than engaging with new clients,” Angela says. “That’s because it’s harder to create a personal connection with potential new clients in this current virtual workplace environment. Unfortunately, that will probably have a flow-on effect with business income, which will fall at a time when costs are rising.”

But despite the challenges of COVID-19, Angela is confident BFP’s principal members are managing well and remaining positive. “Their ability to tap into the BFP network for support, such as through our Google groups communication tool, has been well received and keeps our members connected.”

A post COVID-19 world

Angela doesn’t shy away from the fact that fee pressure and spiralling business costs – including compliance, technology and PI insurance – is placing considerable stress on small advice businesses.

And while she admits that scale is becoming an issue for boutique practices, with more mergers and acquisitions happening within the sector, she is also seeing an increase in the number of partner-style business models emerging, which comprise of multiple owners of individual businesses operating as one firm.

“I am seeing more small businesses wanting to join with other like-minded businesses as a way of sharing resources and spreading the costs of doing business, like compliance and investing in technology.”

It’s a trend that Angela says is being propelled forward due to increased regulation and regulatory costs, and she expects to see more boutique planning practices emerge from the shadow of COVID-19, with more nimble, tailored and efficient business models.

“With many practices already working extremely effectively as remote businesses, small owner-operators are re-assessing their need to have a CBD or high street office. We’re seeing practice principals using this time spent working from home to reappraise their businesses.

“They’re looking at what improvements and efficiencies can be implemented back into the business to rein in costs, like outsourcing or automating functions. And with practices turning to remote and flexible business models, staff may become more geographically spread.”

Evolutionary changes

Considering the amount of regulatory changes the profession has had to adapt to over the last two years, including changes to education and professional standards, Angela is hopeful these changes will lead to improved consumer awareness of what financial planning is actually about.

But when pressed to describe what a financial planning business may look like in the next 5-10 years, she is adamant it will be entirely fee-for-service, with advice finally becoming tax-deductible.

Angela also envisages three different types of advice offerings emerging: comprehensive, topic/ life stage specific, and robo-advice.

She explains: “Robo-advice will be targeted at those individuals who don’t require comprehensive advice. This service will be more generic and centred around asset allocation and investment selection. However, despite the rise of automated advice offerings, I do believe comprehensive and topic/life stage specific advice will continue to be delivered by planners who have a trusted relationship with their clients.

“Comprehensive and topic/life stage advice will continue to be personally delivered by a practitioner, but enhanced by technology,” Angela says, suggesting that fintech will play an important role in supporting the ongoing delivery of advice.

She also believes planning practices will emerge post COVID-19 with a much greater focus on understanding their business model and costs, enabling for a more appropriate setting of fees to ensure that the cost to deliver the advice and services is appropriately covered, while providing a reasonable profit to enable business growth and enhancement.

“The three different types of advice offerings – comprehensive, topic/life stage specific, and robo-

advice – allow the fee to be set based on the client’s advice needs and for firms to specialise based on their expertise and preferences. This specialisation will allow practitioners to complement their existing advice with services, such as estate planning and residential aged care advice,” says Angela.

“And we may also see increased use of managed discretionary accounts and other solutions that provide greater efficiency of transactions and improved transparency for the client.”

The path to independence

With membership of the BFP increasing by about 35 per cent over the last 12 months, Angela says there is a definite rise in interest amongst planning businesses to become self-licensed. You only need to look back 12 months at last year’s 2019 FPA Professionals Congress, where Angela spoke on becoming self-licensed to an audience that was standing room only.

But she warns that becoming self-licensed is not suited for every business, requiring careful consideration of your responsibilities and capabilities as an AFS Licensee. However, for practices wanting to get their own AFSL and travel down the independence route, she offers the following advice.

“It’s vitally important you fully understand your responsibilities as a licensee,” Angela says. “Then consider your capabilities and finances, and whether they are sufficient to fund the establishment and running of the business.”

Her other tips include:

• Create a clear business and operational plan;
• Prepare and test your ideas by talking to people who are existing AFSL holders. Talk to them about their experiences and challenges;
• Develop your philosophy and client proposition; and
• Look to engage with specialist service firms to assist with both the application process and compliance procedures. Also consider what other specialist service firms, like human resources and technology, can be used to support your business.

“Most of all, learn from your peers,” she says. “Develop a professional network, collaborate, share concerns and share ideas. And, of course, I’d recommend you join the Boutique Financial Planning Principals Association!”

Looking ahead, Angela remains excited about the future of financial planning and the important role it plays in improving the lives of all Australians.

“There are so many positives to running your own business, like creating a niche offering, controlling how you operate, deciding what you are delivering, and what services you use. But underpinning all of these, you first have to understand your responsibilities as a licensee and your capabilities. These are both paramount to your success.”

It’s wise counsel from a practitioner principal, who has walked this path.

Personal Financial Services is an FPA Professional Practice. An FPA Professional Practice is dedicated to the highest professional and ethical standards, through commitment to the FPA Code of Professional Practice and CFP^® Certification.

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FPA Professional Practice Program

The FPA Professional Practice program has been specifically designed to recognise financial planning practices that go above and beyond, by adhering to the highest professional standards to deliver best practice financial advice in the local community.

The benefits of becoming an FPA Professional Practice are many. They include:

1. Recognition

As an FPA Professional Practice, your financial planning practice will become a role model, and employer of choice, within your local professional community. Your demonstration of the highest professional and ethical standards, through commitment to the FPA Code of Professional Practice and CFP^® Certification, will bring your practice the recognition and respect it deserves. The use of FPA Professional Practice branding in your office, on your website and on your business stationary, will set your business apart.

2. New client opportunities

As part of the FPA Professional Practice program, the FPA has implemented a series of national referral programs designed to connect Australians with your practice’s financial planners.

3. Professional standards

By becoming an FPA Professional Practice, the quality of your business will be instantly recognisable. That’s because at least 75 per cent of your practitioners are FPA members and a minimum of 50 per cent have achieved CFP^® Professional status (or will become CFP^® Professionals by 30 June 2024).

4. Practice management support

FPA Professional Practices gain exclusive access to the FPA Connect, Share and Learn workshops with your peer business principals, as well as practice management tools and discounts.

Eligibility criteria

The FPA Professional Practice program is open to:

Self-licensed financial planning practices;

Local branches of employed financial planners; and

Practices under a dealer group AFSL that have been operating for at least one year.

The eligibility to become an FPA Professional Practice is:

75 per cent of your financial planners must be FPA members in the following categories: CFP^® professional, Financial Planner AFP^® or Associate.

50 per cent of your financial planners are already CFP^®professionals (or will become CFP^® Professionals by 30 June 2024). There must be at least one CFP^® professional in the practice to be appointed the Relationship Manager.

Your practice commits to upholding the FPA Code of Professional Practice.

For more information, go to: fpa.com.au/professional-practice or call 1300 337 301.