This financial advice practice owner reveals why he decided to leave the comfort of a major institution and go it alone.
Speaking at the AFA National Conference, Phil Campbell from Edplan – which services the teacher market – explained that he started as a life insurance agent back in 1983, and managed to build the practice up to a value of $2m by the year 2000.
The Edplan brand name was used by advisers who would then run onsite seminars throughout New South Wales.
“I’ve been involved as a managing agency under AMP, so we’ve always had several advisers included under my agency,” said Campbell. “I’d get paid an override commission on whatever new business the advisers would write.”
Campbell had 21 advisers under the Edplan umbrella at one stage in the 90s, but ultimately he found that – in his case – there were some limitations to being institutionally aligned.
“If those advisers followed a lead, they could sell their clients back to AMP, or to someone else. So I made the decision at that time that I was not going to buy the clients back from them,” he said.
“We lost advisers for whatever reason they left. I was not going to buy those clients back. They’d only acquired those clients using the market and brand name that I’d built up, so why should I buy them back from them?”
But it was changes in personnel at Edplan, and the AMP commission structure, that ultimately led Campbell to decide to go it alone.
“Paul [Hardick] started in 1995 and he recruited Richard in 1999, and then Rob. So we were all working under the Edplan name in the teachers’ market,” he said.
“Paul was running his bit like a mini-master agency, under my own AMP master agency. I didn’t mind that I was providing the marketplace for them and getting paid override commissions from AMP. So Paul made his own arrangements with Richard and Rob; we all worked in the same office.”
“What happened in 2000 was AMP was cutting out the managing agency in the 35% override. So that was obviously going to make a big difference to the way I operated and the way advisers under us operated.
“So what I decided to do was to leave AMP and go out into the IFA world as we know it.”
Campbell had made a partial sale of his register and was well “cashed up”, so he was able to take the remaining clients with him when he started his own venture. His colleagues, however, were happy to stay institutionally aligned.
“Paul and Richard decided to stay with AMP at the time. A lot of people thought that that looked like a split up. But it gave them a chance to see how things worked out for me under a different dealer group. I didn’t see any problem with them staying with AMP, as they could do their own thing in the teachers’ market. They just couldn’t use the Edplan name any more,” said Campbell.
“Over the next two years we saw heaps of each other and got along fine.”
At the end of that two-year period, Hardick offered to purchase Edplan from Campbell, and the pair came to a mutually beneficial arrangement.
“What we decided to do is that I would sell down two-thirds of my business at that time, and they would put their resources into the pot,” Campbell explained.
“So how it actually panned out is that I got cashed up to the tune of a third of $1,050,000, and then had a 20% shareholding.”
“I was guaranteed a 20% share, which had a valuation then of $500,000.”
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