Real financial planning is the continual process of aligning your use of capital with what is really important to you.
Back in 1997, Quinton, the founder was fortunate enough to be given the opportunity to join a leading Wealth Management practice, where he got to learn the ins and outs of the financial services industry.
Historically, the industry was dominated by the large life insurance companies, who at that time were largely sales-driven, employing an army of sales representatives, whose main objective was to sell policies (please note this was not all companies and advisors, but unfortunately, a large majority). These salesmen were richly incentivized through the payment of high upfront commissions and incentive trips overseas, etc. This ultimately led to many investors experiencing poor ongoing service and investment/retirement outcomes, as there was no incentive for such salesmen to continue to service their clients optimally.
THE R3 BILLION WHISTLEBLOWER
In 2003, actuary Rob Rusconi spent six months analyzing the life and pension fund industry and his findings shocked both the industry and the government. Rusconi’s results showed that some retirement policies’ costs were almost double that of the international average. His findings sparked public debate and parliamentary investigations, which ultimately led to lower costs and greater transparency in the industry.
Following this, FAIS and FICA legislation were introduced which further improved and professionalized the industry.
The purpose of the Financial Advisory and Intermediary Services Act, is to protect consumers of financial products and services and to regulate the selling and advice-giving activities of FSP’s.
The Financial Intelligence Centre Act aims to ensure that financial institutions know with whom they are doing business. In terms of FICA, financial institutions are required to present the paper trails of all transactions and are obliged to report any possible money laundering to authorities.
Our story began back in January 2004, with a tiny office in Rosebank with a total staff compliment of 3, managing clients’ assets to the value of R100 million.
Back in that era, the norm was for advisors to charge both an (upfront) initial commission together with the (ongoing) annual advisory fee.
At the outset, we made the decision to do away with charging initial fees and only charge an annual advisory fee. This went a long way in establishing our business as a practice that was truly aligned with our clients’ best interests and very different to the typical sales/insurance-driven type companies.
From this humble beginning and thanks largely to the support of our loyal clients and hard work of our dedicated staff, Resolute Wealth Management has grown to the point where we look after over 1 200 clients and manage assets in excess of R3 billion.
The cornerstone of our business success can be attributed to our fierce independence (no incentives, additional fees, or undue influence from any third parties) and consistent, attentive service. We appreciate that the nurturing of our client relationships are paramount in building and maintaining our solid foundation.
At RWM, we believe that the historical “commission driven” fee structure is both unsuitable and unsustainable in the financial services industry. This type of fee remuneration encourages businesses to be transaction-based and the objectivity of advice can be questionable. In addition, this type of fee structure does not align itself to long-term personal service. RWM has structured its business largely on an ongoing fee basis system. Our fees are aligned to the performance of our client’s investment portfolio, thereby aligning our interests with our client’s interests.