Justin Butler might work in one of the most idyllic locations in Australia, but running a small business in a remote location has its unique challenges.

You would be hard pressed to find a more picturesque location to run a financial planning practice than the Whitsunday destination of Airlie Beach. But for the principal of Eclipse Financial Services, Justin Butler CFP^®, the balmy days and casual lifestyle of this tropical town comes with its own set of challenges – namely, isolation.

“The Whitsunday shire covers Airlie Beach, Proserpine and Bowen, and Eclipse Financial Services is the only financial planning practice in those three towns. You’d think that might be a good thing, but we just don’t have the skilled staff to choose from. So, that’s a huge challenge for us,” Justin says.

“Historically, it’s hard to find quality staff in such a small town. We’ve had a lot of good planners and mortgage brokers come through but often only on a two year ‘working holiday’. No sooner would they join us than they move on, as they are not used to living and working in such a small, isolated regional area.”

However, Justin is overcoming this staff continuity problem, having been fortunate to work the past four years with another CFP^® professional – Nick Haratsis – who previously was the practice’s first paraplanner, some 13 years ago.

“It makes a real difference having another practitioner in the business who is from this area and loves living here.”

Another challenge facing the practice is the downturn in the economy and the affect that is having on regional communities, including the Whitsunday community.

“Being a regional area situated at the top of the Bowen Coal Basin, we are influenced by the mining industry, which has been hurting for the last few years. Thankfully, Airlie Beach, as the gateway to the Whitsunday islands, also has a vibrant tourism industry, which has been strong over this period. That has helped sustain us.”

While working in a regional town does throw out distinct challenges for the 45-year-old, Justin draws strength from belonging to a tight regional community that is growing quite rapidly. For him, community involvement goes beyond being a good citizen; it’s being part of the lifeblood that sustains that community. And that, he says, is what being a professional is all about.

“I admit it. When it comes to involvement in my local community, I’m too involved!,” he says.

“I’m the president of the local Whitsunday Sportspark, which is Airlie Beach’s only multi use sporting grounds. I’ve spearheaded a Precinct Redevelopment Plan over the last 12 months and I’m happy to say that in the last month, we’ve secured a total of $4.2 million across the three levels of government to build a major sports club that includes a bar, bistro, gaming room and change rooms.”

His strong advocacy of community involvement has also rubbed off on his staff, with some involved on the Board of the local Family Day Care association.

A systemised approach to practice

Justin doesn’t deny that Airlie Beach has a casual and relaxed vibe to it, with a justified reputation for being a ‘party town’. But don’t think that relaxed approach carries through to his practice. Instead, many industry visitors to his practice have remarked on his systemised approach to business. It’s something he is justifiably proud of.

Justin credits a Business HealthCheck in the early days of the practice as being one of the triggers to begin implementing better internal systems.

Business HealthCheck is an online diagnostic tool that provides planners with an analysis of the key business drivers within their practice. It also includes practical ideas and actions to help further enhance a planning business, while further benchmarking the practice against peers and competitors.

“The Business HealthCheck really got us thinking. Instead of just opening up a practice and doing what needed to be done, it made us think about what we were trying to achieve,” Justin says.

“So, in 2004, we started out on the path towards systemising, mapping out and recording all the processes undertaken in our practice. We’ve been using the thread functionality in Xplan for over 10 years to ensure all the things we deliver to clients are delivered thoroughly and consistently. While this is fairly commonplace in the profession now, back then, very few planners were doing this.”

Model portfolios for different risk profiles

As part of this systemisation of the business, in 2005, Justin adopted the concept of model portfolios for different risk profiles. “As we run disciplined model portfolios, we know clients are getting a standardised approach to investment selection, with over 11 years of historical performance data that we can draw upon.”

Justin is adamant that a standardised approach to investment selection does work for different risk profiles.

“If you walk into our practice and you’re a balanced investor, you will get exactly the same portfolio of managed funds that the next balanced investor gets, while a growth investor will get a slightly different portfolio – same funds but different weighting. Again, a lot of firms probably also do that these days but we adopted this approach about 12 years ago.

“And about eight years ago, we started putting in a lot of time and money into monitoring the performance of those portfolios. So, we can now quote 11 year returns that are pretty robust.”

But isn’t this just template advice for clients? Not so, he says.

“While we do have a standardised approach to investment selection, every client receives tailored strategic advice. However, there’s not a lot of difference in the types of investment portfolios we recommend. I’ve based this on what works after 25 years of being a financial planner,” he says.

“We do make some minor variations based on stages of life. For example, with a client who is starting to drawdown in retirement, we use the bucket system. But ultimately, the core of their portfolio will still be the same as the one we use for any other client with a similar risk profile.”

Active investment management

Even with this approach to portfolio construction, Justin is very much an active investor. He believes that if he is not consistently outperforming the index in his various risk profiles and asset allocation ranges, then why should clients pay for active managers?

“We may as well go back to an index fund if we haven’t got the skill to select managers that are going to outperform,” he says.

“In terms of our approach to investing, we actively monitor, report on and compare our returns to peers and benchmarks. We’re not afraid to say that if we can’t demonstrate delivering long-term alpha on net investment selection, then we’re better off indexing. When it comes to our clients, we are active investors and can happily demonstrate long-term index outperformance.”

It’s this approach to investing that Justin believes is one of his keys to delivering a high quality experience for clients.

“Our core belief in what we do is peer review,” he says. “If you can’t confidently explain and justify what you do with every aspect of your practice to a room full of your colleagues, then you must question some of the things you are doing.”

The other key to delivering a high quality experience for clients is “simplifying complexity” for them.

“This means helping everyday people understand the complexity of the financial world, while guiding them towards better choices, leading to better futures. So, education and ongoing client service are real strengths of our practice and ensure that we are constantly delivering a quality experience for our clients.”

FPA Professional Practice

Eclipse Financial Services became an FPA Professional Practice back in 2011, when the brand was first introduced by the FPA.

“My decision to sign up and commit to the brand were threefold,” Justin says.

“Firstly, to support the FPA as the peak body advocating for the profession.

“Secondly, to garner recognition with clients and from within the industry that we’re a quality practice that adhere to the highest professional codes, and thirdly, to leverage the referral services that the FPA has organised with some of the industry funds.”

But for Justin, being a Professional Practice is more than just third party validation of service quality and planner experience. It means committing to the profession’s highest professional and ethical standards, which has brought recognition from aligned professionals, including accountants, that the practice works with.

“We deal with all the local accounting firms, so being an FPA Professional Practice was validation for them that they were dealing with a practice that also adhered to the highest education and professional standards. Accountants all have their CPA and CA professional practices, so being an FPA Professional Practice aligned us more with them as professionals. It’s been good for our business.”

Today, Justin still uses the free Business HealthCheck as part of his benefits of being an FPA Professional Practice, which helps him recalibrate his business.

“I did my first Business HealthCheck about 10 years ago, and then every couple of years after that. My most recent Business HealthCheck was last year, and we’re currently going through the Business Health CATScan results,” he says.

“It’s a good measuring tool that refocuses our Board on where we need to improve and where to direct resources.”

And what of the future?

While he reckons he is living the dream in Airlie Beach, Justin hasn’t gone troppo – yet. He has definite plans for the business, which includes the possibility of opening another office in Brisbane.

“We may only be a small practice but we’re progressive and doing some terrific things. We have good systems and processes in place, so there’s no reason why we couldn’t be as successful in Brisbane,” he says.

But does that mean turning his back on the Airlie Beach lifestyle?

“How could you ever do that,” he laughs. “What I’m talking about is bringing some of the Whitsunday magic down to Brissie. But definitely no neckties!”

Justin Butler CFP^® is the principal of Eclipse Financial Services, which has been an FPA Professional Practice since 2011. Justin has been a financial planner for 25 years. The licensee of Eclipse Financial Services is Professional Investment Services.