Planner Profile: Tony Mount

Ann Cunninghame profiles Tony Mount who was one of the finalists in the 1999 Financial Planner of the Year Awards.

Thursday, December 16th 1999, 12:00AM

Tony Mount, 49, set up his own consultancy in Nelson 12 years ago after working in financial services in the UK, USA and New Zealand. He holds a BSc in Economics and was a member of the IAFP from 1988 to 1995.

Mount now runs Independent Financial Consultants and The Investment Centre with one full-time and one part-time administrator, operates his own in-house investment management system (developed in 1988 and upgraded annually) and has around 300 clients. He says his firm was the first to develop and offer client contracts and currently has more than $40 million of client funds covered by these.

On a personal level, the importance of risk management and estate planning was sheeted home to him three years ago when friends were killed in a car accident. Mount not only acted as trustee and executor, but he and his wife became guardians of their friends' daughter, now eight, bringing her up with their own two boys. Mount says he found the whole experience a steep learning curve.

"However, in many ways, it's been a rewarding experience. I see a lot of people who just haven't thought about anything happening to them or about who would look after their children."

Why did you choose Nelson to set up in business?

We chose Nelson on purpose because we can beaver away and do things a bit differently. We also enjoy living here; it's quite laid-back. We enjoy visiting Auckland and Wellington and sampling the lifestyle, but we don't have to live it!

What is your target market, and what marketing do you do?

The type of clients we get here is very similar to Tauranga: a lot of older people and then the affluent 40 pluses. We don't have any minimum portfolio size, but drip-feed has never a large part of our business until the last three to four years when we've started to see more aware 30 pluses. What you're really doing with them is planting the seed for the future and working to structure their debt.

We have two marketing strategies because of the differing styles of the two businesses I run. On the advisory side, it's mainly referral marketing nowadays, some private seminar work and awareness advertising via radio and newspapers.

For the Investment Centre, which has no advisory function, advertising is more upbeat and aggressive. It's totally reliant on radio, newspaper, promotions and, in the near future, on television advertising.

What services do you provide and what products do you recommend? Pretty much the same (services) as most of us do, although I don't have a high percentage of risk-based or mortgage-based business.

We don't have a product recommendation listing. Over recent years, we've used unit trusts less and less, with a greater emphasis on listed investment trusts and direct holding of shares etcetera. We don't tend to have many clients in syndicated property or registered superannuation products.

About 60 per cent of our funds are now held directly. The main driver (away from managed funds), initially anyway, was the cost structure and also the quality of management. Most of the investment trusts that I will recommend are the ones that are being researched regularly: the Flemings, Foreign & Colonials, Hendersons... I'd recommend those as core products, then maybe some that aren't so well known.

We've also had client contracts since the late 1980s. These are performance-based, or even capital-guaranteed contracts. They're all fixed term contracts (for three or five year terms with quarterly reviews) and the guarantee doesn't come into being until the end of the term. These were developed in response to client demand: people were coming to me with expectations of performance and I could either educate them or take away the responsibility from them. They're normally taken up by older clients who've been with me for a while.

What about your income?

Advisory income is almost totally fee-based, whether that's annual fee income from monitoring or "one-off" income from doing financial plans (when an hourly charge is made) or putting together an investment strategy and product listing (a percentage of the portfolio value). For The Investment Centre, income is from brokerage. Total income is currently split roughly 75/25 in favour of fees. The average annual fee income is 1.3 per cent per annum plus gst over our total client base.

Is there any particular software that you use, such as programmes you use to demonstrate to clients?

On the advisory side, apart from our in-house administration systems which are NT based, we do not use illustrative software for client demonstration purposes.

For The Investment Centre, because it has no staff, we have relied on computer technology to guide investors. We have digitised product advertising for viewing on the computer terminal and via the wall screen, developed an interactive investor profiling system which allows investors to chart their own profiles and choices while at the same time allowing us to market products via the interactive terminal based on their answers. We have also developed software which analyses investor profiles so that we can fine-tune our advertising and promotional marketing.

Do you operate an administration system such as a wrap account?

Using master trusts or wrap accounts, to me, is a case of an adviser becoming a fund manager. They're not really relevant for our business; they don't suit the mentality of the type of clients that we have. I also think it takes away the responsibility of the financial planner and I don't like to abrogate that responsibility. You may as well be a cardboard cutout.

What value do you believe you add for clients?

Not having recommended product listings or affiliations of any type gives us total flexibility in our dealings with clients. As nearly all our clients are contractually based, our hands-on approach and one-on-one dealings with our clients builds a high degree of trust and confidence. There is also a commitment to building clients' investment knowledge. It's an ongoing process of education designed to take away the mystique that surrounds financial planning and investment advice.

Having a more knowledgeable client base also makes my job easier. It shows clients the level of expertise I have, gives them confidence to participate in the planning process while at the same time accepting that they have a part to play and a responsibility for the investment decisions that are made.

There's a danger in our business of trying to be too smart. I've seen financial plans put forward that have been complicated in the extreme; for example, a $50,000 portfolio with 20 different investments, 2.3 per cent here, 1 per cent there and so on. That's just not necessary.

Tony Mount was a finalist in the 1999 Financial Planner of the Year Awards. The Awards were sponsored by Armstrong Jones, AXA New Zealand, Tower Managed Funds, Royal & SunAlliance and FAB Software.

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