How an established Private Wealth firm used marketing to attract a new type of client

Collins House is an advice firm that has been an early adopter in the online direct investment space. In this article, they share valuable lessons they’ve learned while building a digital investment solution to complement their traditional advice business and discuss how they are positioned for their next growth phase.

Dominic Alafaci, Managing Director of Collins House, has been in the financial services industry for over 40 years, and his firm has been delivering advice since 1992.

Dominic has been honoured as Money Management’s Financial Planner of the Year, become a Life Member of the Financial Planning Association, and authored a book: ‘Grow, Manage and Protect Your Wealth’. He’s also been discussing financial planning and investments on Melbourne’s 3AW radio station for over 25 years.

Collins House is not your average advice firm! As one of the early innovators in recognising a “whole of wealth approach”, they were quick to commercialise this opportunity via the creation of a unique multidisciplinary advice proposition for private wealth clients. At the same time, their 3AW radio presence and Dominic’s personal brand were generating demand from a new audience – one outside the personal advice setting.

“It [personal advice] is just not economically viable for those who don’t already have quite a high level of investable assets to pay an adviser to take the time to give them personal attention.”
– Dominic Alafaci, Managing Director, Collins House

Many investors don’t want (or need) comprehensive advice but turning them away was an unpalatable option. The team was passionate about helping these investors start their investing journey with credible and appropriate portfolio solutions and financial guidance.

The motivating factor for an alternate solution

Collins House needed a way to harness their strong brand to reach this emerging retail investor segment and deliver a cost-effective solution. Simultaneously, as an accounting firm was attached to the business, Dominic identified an opportunity to provide a similar solution to a large cohort of their un-advised SMSF clients.

The ingredients for success were all present – brand awareness, trust, credibility, and an underserved market waiting for a solution. Dominic and the team felt it incumbent on them to find a better alternative to what these investors would ordinarily have been doing – their own asset allocation and direct investing.

A digital solution – lessons learned

Collins House’s first attempt at finding a suitable solution was Robo Advice. However, this led to a situation where they had many uncompleted SOAs in the pipeline, and they were not likely to reach completion. The team quickly realised this wasn’t as easy or effective as anticipated.

A more fitting option presented itself in the form of a general advice solution. In partnership with OpenInvest, Collins House could take advantage of its extensive IP and offer proprietary portfolios to end investors via their own customised digital investing service. It was a more elegant solution, empowering the end investor to engage with Collins House in a straightforward and cost-effective manner. No lengthy or complex SOA process.

Managing market fluctuations with a non-advised client can be challenging without face-to-face guidance. To mitigate this, Collins House has a customer promise for direct investing clients – they won’t let the funds fall more than 7% in any trade across the portfolio. If the market falls below 7%, the team has created internal investment rules whereby they move assets to cash. They complement this safety net with insights and information so that investors can understand market behaviours, all delivered via the OpenInvest app.

“We have safety nets. And it’s paid dividends in terms of protecting client wealth, which is what they’re really paying us for.”
– Dominic Alafaci, Managing Director, Collins House

According to Dominic, the direct-to-consumer initiative has been an interesting journey, and they continue to learn how to improve and differentiate the solution from their traditional advice model so that it provides an ongoing (and complementary) revenue stream.

Collins House has invested in its success

Getting the new service off the ground and working effectively has meant an investment of time and money by Dominic and the team.

They’ve not only designed a new website to highlight and differentiate their private wealth and direct investing solution (and they’re currently amid another update), but they’ve also invested in marketing support and paid advertising to generate traffic.

To have the right general advice framework for client queries, they additionally sought support to ‘get it right’ and to create simple processes for the team to follow.

Dominic and the team have further invested in educational content to distribute to their investors via the website and online app. They understand how critical education is in achieving financial well-being and have found a unique way to engage their audience – via their blog (check out their Music and Money podcast).

The Collins House team are excited about the future, and their mission to deliver digitally enabled financial and investing information to more Australians is only beginning.

Implementation Tips from Collins House

The Collins House team has had a long journey with direct investing solutions and gathered significant experience about what works and what doesn’t. Here are Dominic’s tips on what to prioritise if you’re considering adding a direct investing solution to your services:

• Building a brand in your community is a must – you need this to attract investors; however, it will also make sure they trust you enough to stay.
• Ensure the client experience is consistently good – understand the process and look for ways to improve how you communicate and interact with your audience.
• Ensure you have ongoing content resources – providing content like insights, as well as instructional videos about the platform, investing, financial concepts and more, will improve the value and guide your investors to make better financial decisions.
• Be prepared to give general advice – have at least one dedicated person in the office to take calls, make notes and give general advice.
• Be prepared to invest in branding and marketing – have the right website to outline your offer, create the right communications and ensure online marketing (social media, paid advertising etc.) is a priority.

If you would like to know more about how a solution could help your firm serve new markets and improve your growth opportunities, reach out to us at OpenInvest for a discussion.