Provincial wealth advice firm flourishes
Starting a financial advisory during the global financial crisis may not have seemed like a good idea, but a Masterton company has beaten the odds and continues to grow.
Tim and Carissa Fairbrother started their financial planning business Rival Wealth in 2008 after a stint working in Ireland. ‘‘I can’t say the market was favourable to us. However, we found people still wanted advice,’’ Tim said.
The business, which now employs 15 staff in Masterton, is ‘‘flourishing’’ as demand for personal financial advice grows.
Rival Wealth, which provides a service tailored to the financial objectives of a client, has about 2000 clients throughout the country, managing about $70 million for corporations and individuals.
The number of clients is rapidly growing, with half living outside the Wairarapa.
Fairbrother, who is a certified financial planner and authorised financial adviser, cites an ethos of advice and not selling as the reason for his company’s success.
‘‘We have built up a good brand. Most of our clients come through word of mouth,’’ he said.
Unlike banks, which he said were product based, his business was more personalised and need based. There was also little competition for the business, which differentiated itself by the service it offered, he said.
‘‘Our team has a good attitude and we take ownership of everything we do for clients.’’
Baby boomers selling businesses, farms and organising succession planning had also contributed to its success, he said.
‘‘People have money in the bank, interest rates are going down and people need advice.’’
Fairbrother advised those thinking about investing to diversify and put more ideas on the table.
‘‘First ask yourself what you want to achieve. If it’s short-term capital security bank bonds are best, but if its long term you’ll beat inflation by diversifying. ‘‘Spread your money around and out [with] a reasonable amount overseas.’’
This month Rival Wealth was licensed to provide discretionary investment management services (DIMS), which will affect about 80
We have built up a good brand. Most of our clients come through word of mouth. Tim Fairbrother Rival Wealth
of its clients. A DIMS licence is an arrangement which allows an authorised person to buy or sell investments on client’s behalf without having to consult them on every decision.
The licence makes it easier to manage large numbers of clients with similar portfolios, but the David Ross scandal exposed weaknesses in how they were regulated. Licensing of DIMS was introduced as part of the Financial Markets Conduct Act 2013, which is replacing most of New Zealand’s existing financial markets conduct law.
The new DIMS arrangements place greater obligations and mini- mum standards on providers, which regulators hope will deliver better protection to investors.
This places Rival Wealth alongside businesses such as Gareth Morgan Investments and Fisher Funds as one of only a limited number that can offer the service, most of which are large companies. About 44 firms in the country had applied for the licence.
Consumers could be confident the Financial Markets Authority had approved the financial adviser and taken a close look at the process for investing client funds, Fairbrother said.
There were 1842 authorised financial advisers in New Zealand who can give investment advice and most work for stockbrokers, fund managers or insurance companies, he said.
‘‘There have been some issues with financial advisers in New Zealand, but don’t mix up finance company failures and a few bad eggs with the great job that the investment advice industry does for clients.’’