The Yellow Brick Road model may well yield lessons for the broader industry on how to grow the advice market in Australia, writes Vanessa Stoykov
I watched with interest as Mark Bouris’ Yellow Brick Road announced this week their new concept of ‘wealth agents’. As you would know, Mark was a judge on Series 1 of No More Practice, and always is one to watch (pardon the pun!).
While it does seem to be an extension of mortgage broking services with a new name, there are some key attributes that were different and interesting, and worth exploring further as we make inroads into increasing the number of Australians seeking financial advice.
The key factors that made the announcement around wealth agents were around access and talent.
YBR wealth agents will be able to visit clients in their homes, and on the weekends out of business hours. This is definitely an advantage over the traditional advice model, where meetings are traditionally run in business hours only. It personalises the relationship and quickly gets the wealth agent in the mindset, lifestyle and circumstance of the client.
While this can be seen as an advantage, our judge from the last series Financial Wisdom’s Mark Ballantyne pointed out to me that people are in a different mindset when securing a mortgage, whether it be for the first time or investment purposes. This time in people’s lives is all-consuming and they are usually not in the right mindset to talk bigger picture financial goals and complex investment choices. So the wealth agent may have to separate out work around a mortgage from the overall advice process.
It remains to be seen how effective that will be, but it does suggest that with changing work patterns and the low take-up of advice in Australia, maybe advisers and accountants need to be prepared to adjust the ways they engage with clients.
The other key factor around the YBR wealth agent model is around attracting new talent to the advice network – mothers returning to work, those disenfranchised with their current employers, and those that could complete an RG146.
If being a wealth agent is a true alternative, it seems that flexibility of working hours and the ability to recommend products of choice are two key drivers behind this strategy. It may be that this model can have an influence on the middle and lower income segments of the market. These have been traditionally held by banks via mortgages and credit cards. It may well end up being bigger competition to the industry fund movement if superannuation is on the table to be moved.
It seems to be that the move for our industry towards education and qualifications means that complex advice solutions are probably not going to come from this kind of service. While there is definitely room in the market for innovation, new approaches and putting the consumer first, we all know that advice needs can vary greatly from person to person.
The YBR model may well yield lessons for the broader industry on how to grow the advice market in Australia, but it will probably service a particular segment of consumer. It would be great to see the industry working together (both accounting and advice) to design solutions for all segments of the market. For surely the more Australians that receive sound financial advice, the better off we all become.
What it does tell me, is that perhaps advisers and accountants need to offer some flexibility to clients.
