1. TOWARDS THE SUSTAINABILITY OF MICROFINANCE SERVICES - The role of Client Impact Monitoring
Book by Tony Virtue
2. THE VIRTUE OF A SIMPLE, HOLISTIC PLAN
Catherine James, IFA Magazine - November 14-20, 2005 Issue 292, p.35
The Practice
Tony Virtue places a sheet of paper on the table. It reveals a black and white four-sided diagram with the word “YOU” at the centre, flanked on each side by a box containing a different word: superannuation, investments, insurance, finance. Two arrows point out of each box to another word, expanding on each category. It is, Virtue says, a summary of what he does – holistic financial planning at its simplest. “If you were going to come here for advice, and you didn’t know exactly what a financial planner does – or doesn’t do – or where it beings and ends, I think most people would say these are the areas you’d expect someone competent with money to be advising on,” he says, indicating the words on the paper.
Some advisers say the capacity to cover all areas of advice is near impossible, hence specialisation is the way to service the client best. However, after 15 years’ experience – 12 with Associated Planners, Virtue disagrees. He underlines the referral system as the downside to specialisation. “From a business model point of view I can understand someone just wanting to specialise in a particular area. I took the contrary route anyway. There’s a danger if you do outsource these things, there’s quite a lot of slippage.
In other words, I’ve built a relationship, I’ve filled in fact-finders, spending two to three hours really getting to understand the client, and they put a fair commitment into the whole process. If I’m then going to hand them on to the next person, and the next, all through a similar process, I wonder how effective that is. In my mind you want to deal with one person confidently, and know that if they need to check things out behind the scenes, then so be it.” “The alternative would be to have four different people dealing in four different areas [within the practice], but you can see how it could dilute the whole process,” he says.
As for staying abreast of it all, he says it’s not as overwhelming as it seems. “These days we’ve got websites, we’ve got a lot of these things online. With mortgages now you can get conditional approval, you just punch these things in ‘subject to earnings’ or whatever. Risk insurance is not far behind; we’re looking at generic application. Technology is catching up on what we’re doing from an advice point of view, so it’s making it easier to do, though it’s still a challenge,” he says.
Virtue sends out a monthly email to 900 clients, 200 of whom he considers core clients. As for the rest, he never writes off anyone if he can help it. “We might think they don’t have a lot money, that they’re a ‘C’ class client, but you never know with these things. They might inherit half a million, or they have an amount in [an account] that they never thought to mention, but something happens and triggers them to say it,” he says.
He also bases his offices close to clients, travelling between two in Sydney – one in the city and one in the Sydney northern beach suburb of Manly.
“It doesn’t matter how good you are, if you aren’t accessible, clients aren’t going to turn up,” he says.
He is also undertaking a doctorate of business administration, having already completed his Masters Degree. His work with a charitable micro-finance organisation, Opportunity International, was the catalyst for the thesis. “I wanted to do some further studies, but I needed something that was important enough to do it,” he says.
The thesis focuses on the Third World poor, looking at how they might help themselves with access to very small loans. “The Third World is our future customer. Those earning one to two dollars a day are at the entrepreneurial core. I spend some time overseas visiting these people, and their issues are not dissimilar to mine in many ways: working out how to buy something for a dollar and sell it for a little more, or how to manage cash flows,” he says.
This does not mean the industry is about to start targeting low-income clients. Rather, Virtue argues, “the main way that smaller amounts of money are going to be serviced will be through the compulsory superannuation structure”.
