Blue Chip Issue 81

FINTECH
unfortunately, there is a growing dissatisfaction and distrust in the
financial services industry. I also realised it didn’t have to be this way
– a solution already existed in the market, especially for younger
clients, but not enough of them knew about it. I started to connect
with a small passionate community of flat-fee financial advisors,
and this is where the idea of DoshGuide took hold.
We’re seeing strong
indications in the market
that the flat-fee model
is growing faster than
AUM-or commissionbased
approaches.
What is your definition of a
“flat fee”?
Where the advisor is paid
by the client directly on an
hourly, project or retainer
basis. There is no third
party or product involved in
advisor remuneration, and
fees are expressed in rands,
not as a percentage of assets.
Many very good and ethical
financial planners charge AUM-based fees. Would they be excluded
from being listed on DoshGuide?
There are plenty of advisors doing a great job on an AUM basis
and there are many platforms and large, established companies
supporting that model. Currently it’s quite easy for people to find
advisors operating on an AUM basis. However, it’s difficult to find
flat-fee advisors; we want to make that simple – that’s our focus.
It’s important to understand that planners who join our platform
can have an existing AUM business, in fact many of them do. We
have no issue with advisors on our platform growing their existing
AUM business in parallel. However, we require that any clients you
gain through our platform are engaged with on a pure flat-fee
basis, so no commission and no percentage of assets. This approach
gives advisors an opportunity to test out a new model without any
impact on their existing AUM business.
What for you is so important about financial planners charging
flat fees?
Ideally, there should be more financial advisors operating like any
other professional service and they should be rewarded appropriately
for their time and expertise without the burden of having to sell
products. Suggesting options like investing in property, paying off
debt, making gifts to children, increasing your cash buffer can lead to
a reduction in an advisor’s fees. Getting paid less for helping people
be better with their money doesn’t make sense.
Flat-fee advisors are disproportionately represented in the
industry, but more people, especially a younger demographic, are
organically seeking out this service. We’re seeing strong indications
in the market that the flat-fee model is growing faster than AUM-or
commission-based approaches. We’re excited to support and
increase that growth while helping more advisors build sustainable
flat-fee businesses.
You seem to be promoting a model where financial planners
only give advice, and that clients are then left to implement
that advice directly with product providers themselves. Is this
correct? What about the many clients who don’t have the time,
energy, experience or expertise to do this themselves and just
want to delegate their affairs to a financial professional?
No, most of our clients need help with implementation, and our
advisors do a great job with that, the only difference is now they
are getting paid on a project or retainer basis to do so. Since
advisors are no longer drawing fees from the product, they are
free to consider all options in the market for their clients, even
self-service providers, where it makes sense. For advisors to be
successful with flat-fee clients, they’ll need to suggest product
providers that keep costs down to a minimum, and help with
implementation, regardless of what providers are selected.
We’re starting to introduce client ratings and reviews for
individual advisors; this rewards those delivering true value,
resulting in more exposure and more clients. In the future, we’ll
also share learnings from the best-performing advisors on the
platform so that everyone can understand how to deliver the best
possible flat-fee client experience. Part of the value DoshGuide
provides is sharing best practice around building this type of
client base.
There is no such thing as a free lunch. How does DoshGuide
make money?
We launched in July, and currently are giving away free lunches!
While we’re in beta for the next several months, advisors who
join can use the platform free of charge. Once we get beyond
beta, our fees will be charged as a percentage of an advisor’s
earnings on the platform. We’re still finalising our fee structure
but we’re aiming at averaging around 10% to 15%, with longer
client engagements dropping to below 10%.
How do people get in touch with you?
I’d love to hear people’s thoughts on what we’ve built, how we
can do better and any questions they may have. Feel free to get
in touch on LinkedIn or email rory@doshguide.co.
If you are interested in becoming an advisor, visit
www.doshguide.co/become-a-guide/
Prior to this, Brachner worked at
Google for nine years, gaining
extensive global experience as a senior
sales and business development
leader, having lived and worked in
London, Singapore and San Francisco.
This included eight years focused
on growing Google's advertising
technology business (DoubleClick,
Google Marketing Platform, Google
Analytics) in various markets and one
year building partnerships for the
Chrome product team.
Rory Brachner, founder
and MD at DoshGuide
www.bluechipdigital.co.za
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