Barry Lambert explains why he turned down an offer for Count that was worth significantly more than the multi-million amount that he received from CBA, and why he wouldn’t want to become a financial planner now.
Speaking at the No More Practice Live event in Sydney last week, Lambert was extremely candid on the state of the financial planning industry today.
While he was confident that there is always going to be a need for financial advisers, top of his list of concerns was the compliance-driven, box-ticking, exercise that he believes financial advice has become.
“I remember the first Choice review. There were eight judges on the Choice review – seven of them were compliance managers,” he said.
“There was no regard for the quality of advice; it was whether or not you ticked this box, ticked that box and all did this bullshit that we call financial planning today. And that has been what’s wrong with the industry.”
He added that these compliance requirements have made financial planning a very expensive industry to work in today, and these harsh business conditions have contributed to the current hot topic of scaled advice.
The concept of putting everyone in the same box “because someone says this is what you should do” was “absolute nonsense”, said Lambert.
“And that’s why I wouldn’t want to be in the industry, personally, if I was a young person today,” he added.
“I don’t count the money I’ve got”
It is an industry, however, that has brought Lambert huge financial success. But he told the audience that personal financial gain was never his primary motivator. In fact, he claimed to have turned down an offer for Count that would have personally netted him considerably more than the multi-million dollar amount that he earned last year when CBA bought the business for $373m.
“I don’t count the money I’ve got. People used to say ‘how many shares do you have in Count?’. I’d say ‘I don’t know. Have a look at the annual report – it’ll tell you’. Because I never sit there and think about how much money I’ve made, or am going to make,” he said.
He explained that, back in 1998, after he had his second heart bypass and was feeling “a bit vulnerable”, BT approached him to purchase 20% of Count – an offer that was then upped to 100%.
“I had no interest in selling 100%,” he said. “So we ended up listing Count instead, so I could give equity to the staff and to the membership. But had I taken that offer then – because I owned 90% of the company then – it would have been more than I would have got today.”
He does occasionally get asked why he sold Count at $1.40 a share, rather than earlier in the game when shares were going for $3.50, but claimed that this is a question that never worries him.
“The money is of no influence,” he said, adding that – in reality – last year’s CBA offer was the only realistic one that he’d received since he was approached by BT over a decade ago.
“So this was the first time that a real offer was put on the table, and the directors thought it was a good offer – in the best interest of the shareholders,” he said.
Determined to be different
While Lambert remained largely modest about his remarkable success, he did allow himself a pat on the back for putting Count in a position where someone wanted to buy it – and urged today's practice owners to do the same.
“You’ve got to position yourself to be different, so we positioned Count where there was no other business like us,” he said.
“Position your business so your clients don’t think there’s anybody else like you. And if you get that position where your clients think that they can’t go anywhere else because there’s no one as good as you in financial services – or whatever it might be – once you get in that position you have a great business.”
He did concede that his father-in-law certainly thought he was “pretty stupid” for leaving secure employment with the Commonwealth Bank in order to start up his own business all those years ago, but explained that it never dawned on him that going it alone was a stupid thing to do.
“I knew there was a great demand there, so it didn’t occur to me that that was a risky thing at all,” he said.
Are compliance hurdles driving good candidates away from financial advice? Have your say by commenting below.
Barry Lambert: why I sold Count