Know Your Money with Bronwyn Waner and Craig Finch
Know Your Money with Bronwyn Waner and Craig Finch
113. Financial Clarity: The Fundhouse Approach
Join us for a compelling conversation with Ian Jones from Fundhouse as we explore the foundations of ethical investing and the importance of transparency in financial services. Ian shares the ethos that drives Fundhouse, actively working to place the end client's needs at the forefront of all investment decisions. Throughout the episode, we delve into how Fundhouse has navigated challenges in the financial advisory space and why it is essential to cultivate relationships with like-minded advisors.
Hear about their core mission: to assist clients in retiring better and to promote a sustainable financial advisory industry. Listen as Ian emphasizes the need for clarity and simplicity in financial discussions, transforming complex investment strategies into achievable outcomes for clients. This episode serves as an essential reminder of why ethical investments lead to lasting success, not just for advisors, but for their clients as well.
End your financial journey on a positive note by engaging with ethical practices that prioritize your best interests. Subscribe and share to spread the word on transparency and clarity in the world of finance!
Please subscribe to our podcast or have a look at our website
www.growthfp.co.za
Hello everybody, welcome to Know your Money. I'm Bronwyn Wehner.
Speaker 2:And I'm Craig Finch and we are from Growth Financial Planning. We hope you enjoy our podcast. Our viewers very lucky to have Ian Jones back in the studio from Fundhouse and Ian, we met over 10 years ago when your business was evolving into creating model portfolios for practices and I thought that was an incredible way because I was trying to shuffle through all these funds over a thousand South African unit trust funds, trying to blend them, talking to other practices, and they were doing what I was doing and we were basically almost guessing and I found that really difficult to make sure the outcome was good. And then you explained how model portfolio would be and you've spoken about the DIM role that played a major role in our practice for the last nearly 11 years. And I'd just like you to talk about fund house because for me, there's a great ethos through your company and it's just continued to grow as you've grown. It's a really important part of our practice and what we present to our clients. A little bit more about the ethos around Fundhouse.
Speaker 3:Thanks, craig. Yeah, I remember that meeting you 10 years ago very fondly and it's been a bit of a journey. Yeah, I think perhaps the place to start is to talk a little bit about what drives Fundhouse, why we try and do what we do and what almost the founding sort of thinking behind our business was back then is we as a collective, looked at the market, looked at the financial services market in south africa and recognized that both in south africa and globally, there was quite a lot of poor practice, quite a lot of sort of the client being at the end of the queue, everyone taking their little bit of fees and if the clients got a bit out at the end. You know that was how it happened. And we saw an opportunity you know with, I suppose, the rise of a bit of consumer power with social media and things like that to be on the right side of that and to try and center our business around the end client, the end investor, and center our business around the end client, the end investor. And if we could build a business where every single thing we did was to make decisions in the best interest of the end clients and in the best interest of allowing them to retire in the best possible shape that they could.
Speaker 3:We thought we could build a good business. So it might sound all altruistic and like doing the right thing and all that, but we really did believe that it was also a significant business opportunity to grow and be on the right side of that. So so our sort of starting mission or mission statement was to do everything we could to help clients retire better. And then the second thing was to try and build a more sustainable, long-term, growing, independent financial advisory industry where there were advisors out there doing the right thing, trying to make sure they charge the right fees, putting in the right funds, and they were up against this. So the rest of the market were, as I say, a bit of overcharging, sort of didn't matter what the client did fees, penalties, upfront, all these things. So that was the starting point and that sort of has remained very key in our business for, yeah, I mean, we're going forward. This is our 18th year and it's been very much a part of everything we've done from the start and remains.
Speaker 1:Awesome. Do you have a question? Or must I jump in? No, jump in Bron. Awesome. Do you have a question? Or must I jump?
Speaker 4:in no jump in Bron.
Speaker 1:So, with regards to how you decide who you're going to work with or like what financial practice, what is it that you were looking for back then and what do you look for now? And just explaining a little bit of where Fundhouse went with that, yeah, that's a great question.
Speaker 3:And back then, when sort of you're trying to build a business, it's quite easy to just accept any client because you're trying to build a business and trying to get revenue and all that.
Speaker 3:And we made at the time it was quite a tough financial decision, but long-term has been gold for us where we would only work with advisors who had a similar, I suppose, mindset, similar ethical underpin to us, Um, and so we walked away from quite a few um potential clients where we didn't feel that was a good fit.
Speaker 3:You know, if the advisor wanted a kickback on fees, or the advisor charged fees that were inappropriate or wanted to put things in structures that we didn't think was right for the end client, we wouldn't start a relationship with them. So where we've ended up is that we have a client base that's made up of like-minded people who have seen growth because they're doing the right thing and have ended up with a client base that we enjoy spending time with. So the answer to your question around how we choose who we work with is the starting point is a cultural, ethical overlap and then other things. Like you know, does the business have the potential to grow? You know, is the business, someone, that we want a long-term partnership. All those other factors come into it, but the starting point was very much a cultural fit.
Speaker 4:You know, I asked you on the previous episode did you think that your I think it was the way you were able to cut the cost to your customers Was that maybe what made you unique to your competition? But I think what maybe made you unique is you were a fund manager that was happy to walk away from money if it wasn't ethical.
Speaker 3:I think it's part of it. I think there are a couple of others that have done the same. I think there are a couple of others that have done the same. But you know, it's very much a case of if you want to build a long-term, sustainable business, if your principles at the start are right, you're never having to unwind anything. So we came in at the start with fees that were at the lower end of the market. We won't use the word cheap At the lower end of the market. Affordable, yeah and um.
Speaker 3:You know we did fund ratings. So we put ratings out into the markets where that hadn't been done before, where someone went out there and said we think this is a good fund, we think this is not a as good a fund. For these reasons it almost was to try and hold the whole the industry a little bit more accountable in a way. And by starting in that place you're never having to unwind anything you've done before. We've got no product of our own, we don't earn any fees from any asset manager or any product, and that's really, really key. You're not beholden to anyone.
Speaker 3:Then so, you're putting a portfolio together for a client and your starting point is okay, we're trying to deliver, I don't know, inflation plus 5% or 10%, 11% per annum or whatever the objective is you're trying to meet and you've got a totally blank slate. You're not linked to anyone. You're not saying, well, if we increase that fund, then we get 10 basis points into our 0.1 percent, into our pockets. So I will give them 20. You know, it's very much a case of we're in the same fee from, regardless of which fund manager, which products we use, which platforms, which administrator, which anything. And oh, that is very transparent. Yeah, yeah, and it's a beautiful thing.
Speaker 3:It's an absolutely beautiful thing because you, you, you never having to answer to anyone that's your plans.
Speaker 2:Yeah, that suits our practice really, because we we are fiercely independent. We want to remain that way. We now fund us all the same, and that we also, the people that you employ, have the same ethos as well. So it's very easy to talk to your, your, all the people, you, they just get it, they get our, our world, we get their world, and it's a, it's an easy fit, it's not a difficult discussion on anything, and often we bring financial planning complex, complex problems to you guys. We bring it and sometimes you'll say walk away from it, and we respect that, we don't, we know that you're not financial planning complex problems to you guys. We bring it and sometimes you'll say walk away from it, and we respect that.
Speaker 1:We know that you're not doing it just to add some more assets onto the platform, which is really good and I also think the benefit of Fundhouse for our practice is you have all these like-minded advisors and they do their due diligence on certain things. So in terms of winding up estates or any different thing, they will direct us to the right person that's also like-minded, like that. So you don't just help us with the funds, you help us with all different things. I mean Fidelis Fox and Martine, that's making sure that you're doing that estate planning properly and that's from the Fund House family. So as a practice, we really benefit from you in more than one way.
Speaker 3:Yeah, I would add one other thing that I think is really important that we try very hard to do this as much as we can. It is harder than you think at times and our tagline is investment clarity. And I remember one of the asset managers, when we first put that tagline on, saying to me I knew him quite well and he said to me that's quite arrogant to think you've got clarity of investment. I said no, you're missing the point completely. We are trying to provide clarity to the end investor, because I always use the story I mean I'm useless when it comes to cars.
Speaker 3:I know nothing about cars. I climb in a car and just go forward, and if I open the bonnet and there's a mechanic there saying, oh, you've got to replace the whole engine, I'm just cool. And the same way, my mother knows nothing about financial services and if a financial advisor says to her we've got to replace the engine, she's like cool. And that trust relationship comes from a place of well, I don't really know. So anything and everything we can do to provide clarity, to provide a simple explanation of what's quite a complex world.
Speaker 3:So we want to try and do exactly so that the end client has some level of information, some level of way to test back. And it's hard. It's hard with the world big and getting out there, but that's what we try and do, and all the articles we write and all the webinars we run are we try and do it in fairly, I suppose, untechnical, unjargonful language To try and see whether we can get.
Speaker 4:I think that's one of the big frustrations with people like myself when it comes to banking terminology and financial terminology. It's much like lawyers make up. Lawyers speak just so that we don't understand it.
Speaker 3:It seems the same thing. There is an element of that. Definitely there are lots of good people in the industry who do the right thing and say the right thing.
Speaker 4:There are some people who use complexity to their advantage, and I really like what you said about making it as what's the word for it Not attainable, but achievable.
Speaker 1:Yeah, achievable for everyone to be able to, about making it as what's the word for it Not attainable, but Achievable. Yeah, achievable for everyone to be able to understand a transparent clarity.
Speaker 4:Yeah, I really like that.
Speaker 1:Thank you so much, Ian. We appreciate the partnership and thank you for being here.
Speaker 3:Thanks to both of you. It's been a great 10-year journey.
Speaker 1:Thank you Bye.
Speaker 2:Thank you for listening. If you have enjoyed this podcast and would like to subscribe, please visit our website wwwgrowthfpcoza. The information we have provided in this podcast is our personal opinion. For more detailed information, please discuss your financial situation with a financial planner.