The new age of advice: how a WA planner found independence

Imagine putting $10 million in the hands of an adviser you have never seen. Well some people do, and the man they trust is Perth-based Travis Morien.

Travis Morien has about 100 clients, but he claims not to know the total FUM of his business. (For professional indemnity insurance purposes he claimed the number to be around $40 million). What he does know, however, is his clients vary in their own assets from a few thousand right up to $10s of millions. “I don’t track the average FUM statistic, but a lot of my clients have seven figure sums, and some are $10 million plus.” While Western Australia has had its fair share of entrepreneurs, it is not local clients that make up the majority of Morien’s business. In fact he says most of his clients are from the eastern states. Morien is a new-age planner, attracting clients with his detailed website, and corresponding with them primarily via email or web conferencing. This fits comfortably with the profile of the majority of his clients, where three quarters come from IT or academia What is most curious about the business, is that most clients do not have regular face to face meetings, and some of them only met Morien recently after using his services for some years. “I have met most of my clients now,” he says, “but often it is after many years of dealing with them. Some people are prepared to invest $10 million with an adviser they have never met.” What persuades them, Morien contends, is the detailed content of his website. “In many cases clients have been seeking an independent adviser for some time, and they have often been burnt by the commission based advisers, they are swayed by the content of the website.” Morien says the website works as a marketing tool, because a lot of information can be posted onto it at a minimal cost, and it is powerful because people pass it on. “A customer service orientated spiel is not as convincing to a jaded public, as a thought out business plan,’ he says. Morien says his website will attract about 6,000 visits a month, and in a good week will convert two or three enquiries into genuine clients. “There is at least one person enquiring per week who is ready for a financial plan, but until now I have been unable to service them because of my work load. But now with the appointment of Scott Francis, in Brisbane, I can feed the clients to him.” The website not only attracts clients but also other advisers “I get emails all the time from advisers impressed with my website and the opinions I give,” he says. “The website seems to attract junior advisers or paraplanners from large dealers who are feeling constrained or misaligned with the sales orientation and restricted product lists of large dealers.” “I am a genuine independent alternative.” Most of his enquiries from planners turn out to be mentoring exercises rather equating to real discussions of authorisation. But Morien takes his independent fee only status very seriously and criticises the Financial Planning Association for their acceptance of commissions. “The FPA aggravates me, with their ‘commissions are OK if they are disclosed line’,” he says. “They take the lowest common denominator approach, the one that won’t upset the majority of their membership.” But being so staunchly fee-only does have its complications. For instance, Morien is unsatisfied with the treatment of commission rebates in the majority of commercially-available front end software systems, and so is building his own. “I’m building a cheaper version that is more suitable to my requirements,” he says. “I need a system that deals with commission rebates properly.” Morien resigned from Taylor Financial Planning in July last year and then set up under his own licence. He claims, now he is an independent fee based planner, he can save his clients up to 1.5 per cent on their investments. But his investment advice is pretty simple, invest passively. In the closest thing to a junkie in financial services, he is a self-confessed Dimensional Fund Advisors’ fan, and now directs most of his investment through the Credit Suisse platform because of the cheap and easy access to DFA. “Before Credit Suisse’s Wrap, few wraps had DFA on them, and I wanted DFA,” he says. “I used to use some boutique value managers as well, but not so much anymore now that Credit Suisse’s Wrap is out. That has changed my model a lot, because it is a cheaper wrap there is a lot less incentive to look elsewhere for low cost active management.” Many of Morien’s clients are 100 per cent passively invested, those that aren’t have some investments in asset classes that are not easily indexed, such as agri-business or direct property. Adviser’s Name: Travis Morien Business Name and Location:Compass Financial Planners, Perth Dealer Name:Compass Financial Consulting Group Number of Staff: 2 authorised representatives, and shares one administration staff and one junior accountant with the other two parts of the business, Compass Business Consultants, and Compass Finance Brokers Relevant Qualification: Bachelor Science (Honours), Diploma of Financial Planning, and he is studying the CFA in his own time but is not an enrolled student Member of the FPA: No Number of clients: 100 FUM/Advice: He says he doesn’t know the exact figure, but for the purposes of professional indemnity insurance he quoted $40 million Method of fee collection: flat fee which varies from $600 to multi-thousands, and moving to a yearly administration fee as well Investment Platforms: Credit Suisse is the main platform but also uses Macquarie Wrap and Skandia Wholesale Front end Software: Building his own Investment Research Used: n/a Insurance Research Used: n/a Ongoing Education: Tribecca conferences, Dimensional Fund Advisors conferences, and the IFA CPD program