Despite being ensconced in Australia’s largest dealer group, the Melbourne AMP business of KRA Financial has created a boutique feel by asking its clients exactly what they expect from the financial advice process.

The principals of Melbourne-based planning practice KRA Financial Group have been through 18 months of reinventing their business such that its focus is solely on the delivery of its core product – advice – according to Mark O’Leary (pictured), one of the founders. He says that the change process followed independent research with clients on what they wanted from their financial advisers. “We found that they expected relevant and timely strategic advice to reach their financial goals but they also wanted simplicity,” he says. As a result, KRA developed its own unique customer value proposition known as KRA Strategy Plus. This product simplifies the advice process into three clear, integrated components: strategic advice incorporating the seven key steps as per FPA guidelines, the financial solution including investment recommendation and placement, and ongoing customer care and reviews. To assist the planners to substantiate the recommendations on investment placements the firm developed the KRA Investment Management Service. KRA received one of the Innovation Awards given by its dealer group, AMP Financial Planning, last year for “excellence in the delivery of quality customer advice propositions”. O’Leary says that the practice, set up in 1997 with the merger of his business with that of fellow principal Alan Crosby, and subsequent purchase of another practice, would continue to evolve. “We’ve always been sensitive to what our clients want,” he says. “This is a relationship business and it’s all very well to be liked by our clients but we have to give them value… this is an ongoing process that’ll probably never finish” KRA has five planners and four support staff. Having tried in-house paraplanning, the firm now outsources this to a specialist paraplanning business, with a condition of their contract being that the paraplanners moved into the same building as KRA on Queens Road, Melbourne. “Our view is that as long as the strategy is right, the Statement of Advice is more a process,” O’Leary says. One of the planners. Simon Turudia, has become an equity partner in the firm at age 32, and represents part of the succession plan, O’Leary says. Turudia completes his CFP this year. Another, Adam Watts, was central to developing the Investment Management Service and acts as technical research manager for the other planners. An important part of the reinvention process for KRA was to outsource the rudimentary contact with about 2,000 clients who are of a “transactional” nature, O’Leary says. AMP Financial Planning’s call centre now handles queries from those clients (answering the phones as “KRA Financial Group”), while KRA continues to do their reviews. This allows the planners to concentrate on the remaining 900-1100 clients who represent their preferred list. These clients receive quarterly summaries of their accounts, including commentary on what’s happened, benchmark comparisons for the markets and any recommended changes. O’Leary says the quarterly summary is not designed as a “churning vehicle” but rather to provide up-to-date information. He estimates that between 600-700 of the preferred clients are active. KRA has clear pricing, with an initial strategy fee based on the complexity of the task, a one-off investment placement fee based on assets and an ongoing service fee, also based on assets. The asset-based fees can either be paid by the fund managers through their commission systems or directly invoiced to the client at his or her choice. A few KRA clients have a performance-related fee in their agreements. KRA does not have a deliberate referral strategy. “We get plenty of referrals without having to ask,” O’Leary says. “That way they tend to last. We’re about building long-term relationships. Name: KRA Financial Group Location:Queens Road, Melbourne Dealer: AMP Financial Planning No. of planners: 5 No. of support staff: 4 No. of clients: approx 3,000 Funds under advice: $230 million Research: Mercer (through AMPFP) Software: MoneyWise (some Visi models for projections and planning).

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