Practice of the Month: HPH Solutions

04-Sep-2017

By Megan Tran

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HPH Solutions managing partner Rob Pyne believes revealing what investors don’t want to hear - that their financial adviser doesn’t know everything there is to know about financial markets - is one of the things that sets his Perth-based practice apart.

“We reveal the inconvenient truth that financial advisers and stockbrokers cannot be relied upon to pick investment winners. Advisers promising this to clients are kidding themselves and their clients,” Pyne said.

“Worse still, clients are paying a premium price for this perceived investment management skill. We use a low-cost, evidence-based investment approach with Dimensional Fund Advisors,” he said.

The group uses a low-cost, evidence-based approach for their investments, which are run through Dimensional Fund Advisors, and Pyne says this approach as well as being a fee-only business has helped the firm, as they are not preoccupied with picking investments and gathering assets to boost their funds under advice.

Pyne, who has been in the financial services industry for 24 years, decided to get into financial planning in the early 1990s after reading Noel Whittaker’s book Making Money Made Simple.

“I had just completed a science degree but this book really sparked my interest in personal finance - it set me on a course that led me to becoming a financial planner five years later,” he said.

He wanted to start his business with a different approach, by having a fee for service model which was independent of product payments or asset-based fees.

“If an adviser gets paid on a percentage of AUM (assets under management), their focus is on gathering assets. Fee-only financial advice gives us the freedom to represent and advocate for our clients without restriction or reservation,” he said.

Pyne said this approach also crosses over to their remuneration model, in which advisers are salaried employees and staff partake in a profit sharing plan which engenders a collaborative culture.

“If the remuneration of our advisers was tied to their client revenue, they would only be concerned with their own clients,” he said.

“We instead focus our attention on where we can add the most value – strategic advice and client service.”

However the business model is not without its challenges, Pyne said, admitting he has not had as much time as he would like to work on higher level business strategy, such as improving productivity through technology.

“To address this challenge, the partnership team supported me stepping back from advising clients earlier this year so I could focus on business management,” he said.

Pyne advises those looking to improve their business or start up on their own to first clearly define their clients based on the type of work they enjoy doing, then tailor their service proposition to the specific needs of this group.

“This will also allow you to develop a targeted marketing message to your preferred audience,” he said.

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