Cargill Financial was not alone in its journey to seek out the right licensee. It joined up with seven other practices from its former licensee and collaborated with them to find the right match.
The outcome was surprising. Having been down the path 12 months earlier and unable to make a decision, Cargill’s ended up choosing a licensee it had not previously considered.
Since May 2019, Cargill’s has been licensed with Paragem Pty Ltd. Cargill Financials’ Senior Financial Adviser, Matt Lancashire, says the most satisfying aspect of transitioning to a new licensee has been getting the decision right.
“We had a recent PD day and at the principals dinner, I felt like we fitted in. It was the professional home I hoped it would be.”
While the final trigger for Cargill’s to transition to a new licensee was forced, the writing was on the wall that things were changing for the worst under the previous licensee.
“Some of the services we liked had changed,” explains Lancashire. “Besides our practice Development Manager, getting in touch with key staff was difficult. Fast responses were impossible with so many layers of teams and decision makers.”
In contrast, Cargill’s was looking for a licensee that wasn’t too big, that was like-minded and whom they could have a relationship with.
Rank and file
Conducting the due diligence on ten licensees is a large task. The group divided the licensees and asked each practice to contact two licensees and organise appointments.
A ranking system was devised by the ten licensees and each practice attended most interviews to provide their input. The group spoke to industry peers and other Paragem practices on their experiences.
“The licensees offered very similar services,” says Lancashire. “The Approved Product Lists (APL), the research, getting wider in their services.”
When the list was being narrowed down, the group asked the selected licensees for their X-plan logins so they could assess how similarly they used the system.
But essentially, it was people that became the main focus and Paragem stood out. “I realised why I liked doing this job. They were positive about the future. I felt very comfortable and reassured by every member of the team and they were positive about the future of advice.”
Advice from industry peers also confirmed Paragem would be a good fit in terms of the retiree and pre-retiree clients the business looked after.
Making the move
After completing the Paragem application, Paragem visited Cargill’s to review three client files and their past three compliance reports.
Paragem assisted with communication with the regulator, the Australian Securities and Investments Commission, regarding the license change and with communicating to fund managers on the APL.
The new codes that were required for Xplan access and data feeds, were also organised by Paragem. The transition process took two months – one month’s notice period and approximately another month to be fully operational again.
“How does the saying go?” asks Lancashire. “How do you eat an elephant? One small bite at a time. The implementation was done in stages, so it felt manageable.”
Sweet taste of success
Since Cargill’s joined Paragem in May, it has been very busy. Statements of Advice for ongoing clients have been issued, client reviews have been conducted and new Service Agreements signed.
Moving all clients to similar ongoing arrangements has also been a priority.
Despite this activity, Cargill’s is very happy with its decision, one that Lancashire says was made a lot easier by talking to as many contacts as they had, in the industry. Further, taking the time to make the right decision was imperative.
“Relationships are really important,” says Lancashire. “We rely on them [licensee] massively so it’s important that we get it right.”
This case study has been issued by HUB24 Custodial Services Ltd ABN 94 073 633 664, AFSL 239 122 (HUB24) and is current at October 2019. It is only for use by Australian Financial Services License (AFSL) holders and their authorised financial advisers. It is not for use by retail clients. HUB24 is the operator of HUB24 Invest (an investor directed portfolio service), promoter and service provider of HUB24 Super which is a regulated superannuation fund. The trustee and issuer of interests in HUB24 Super is Diversa Trustees Limited ABN 49 006 421 638, AFSL 235 153, RSE License No. L0000635 (Trustee). The information in this case study is intended to be general information only and not financial product advice. It does not take into account any person’s objectives, financial situation or needs. It is not legal advice. Accordingly, before acting on any of this information, the reader should consider the appropriateness of the information having regard to their or their clients’ objectives, financial situation and needs. This information is based on the experience of a single Advice Licensee. It relates to that Advice Licensee’s experience and is provided for illustrative purposes only.