The Milestone Financial Group is gearing up for the next phase of growth in the “quality” independent financial adviser (IFA) market, according to recently appointed head, Grant Pearson.
Pearson, who spent a large part of his career in the Australian financial services industry, said Milestone was seeking to partner with advisory firms “who want to improve” their offer as regulatory and competitive pressures mount over the next few years.
“We want to ensure there is strong segment of the NZ market which provides arms-length, objective financial advice,” he said.
Currently boasting 23 associated advisers – plus another large group just signed on – Milestone is structured as a joint venture allowing member firms to access services according to their needs.
Pearson said Milestone advisers come in three varieties: those who, similar to “shopping in a supermarket”, pick and choose certain underlying services; a mid-tier group who essentially purchase a full ‘licensee’ offering; and, a core handful of advisers who drive the ongoing development of the JV’s offerings.
Under the mixed services model, all underlying advisory firms will be financial advice providers (FAPs) when the new regulatory regime kicks in next March.
“We won’t be a FAP but will provide practical services to help advisers with their operations,” Pearson said.
While Milestone advisers would retain their independence and identities, where possible, the group does aim to bring economies of scale as a collective buyer of services.
For example, last year the business signed on consultancy firm MyFiduciary to provide asset allocation and other investment research. Milestone uses both MyFiduciary and Morningstar “their research capability, optimisation tools and portfolio X-rays (which we base our approved product list on)”, the group’s website says.
“We’ve also just added a new research software system from Australia that makes it much easier for advisers to tailor portfolios for clients,” Pearson said.
In total, Milestone had about 20 different advice business elements available for advisers on a ‘pay per input’ basis.
But nothing is mandatory: for instance, Milestone is ‘platform agnostic’, although the ‘core’ group of advisers use an older FNZ-based service (OneAnswer) that could be up for review.
Balancing scale against independent adviser choice is not an easy act but Pearson said the flexible and collaborative Milestone model could be a winner as the NZ market moves into the Financial Services Legislation Amendment Act (FSLAA) regime.
“We’re seeing interest from advisers who want to grow their businesses,” he said. “And also from those who are on runway to exit the industry and want to work with a group that won’t treat their clients as a commodity.”
Milestone traces its roots back more than 20 years to The Portfolio Group (TPG), an advice service business formed by seminal fund manager Armstrong Jones – later taken over by ING then ANZ Wealth. After breaking the institutional links, some TPG users dispersed into separate advice firms Milestone and Kepler – the two groups formally merged last year to establish the new version of Milestone.
Pearson joined earlier this year to help the group grow sustainably through the coming industry transition.
“There’s room for one, maybe two, advisory groups in NZ aiming at the quality IFA market,” he said.
In Australia, Pearson was involved in various capacities with some of the marquee brands across the Tasman including MLC (“when it was still Lend Lease”), ING and platform pioneer, Asgard.
He returned to his birth country of NZ about five years ago, involved in various business interests including an ongoing role with Australian boutique funds manager, Insync.
Pearson, however, remains wary of translating his Australian experience to NZ conditions.
“A lot of Australians make the mistake of assuming NZ is lesser in many ways to Australia,” he said.
Later this month, Milestone embarks on the first of an intended ongoing series of adviser engagement days, designed to tread the fine line between fund manager sales pitches and high-end academia.
“We want to fill the middle space where advisers come away with ready practical solutions,” Pearson said.
The Milestone National Adviser Investment Development Day is set down for October 28 in Auckland and in Christchurch on October 30.
Future events would also feature separate consumer-focused sessions open to clients of Milestone advisers or other interested parties.