Testimonial - Richard Heffernan - BMR Financial Group P/L

Why do you use listed securities in your client portfolios? Do they offer any particular benefits?

I think that over time we have been looking at all products in our attempts to add value to our clients. This really has been brought about as a consequence of our entry and continued work in the self managed superannuation environment. I would suggest that 'control' is the major benefit of using listed securities. Control in the sense that the client is able to become very much part of the asset selection process.

Whilst there is still an asset allocation in terms of Aus Equities, fixed interest etc, the client is able to cut and paste more personal preference rather than having a fund manager provide this process.

Do you offer these listed investment products to all clients or only to some that meet certain criteria e.g. minimum amount FUM etc

We have predominantly used these product structures for those clients in DIY / Self managed superannuation funds however we are now tending to view Hybrids, Warrants and Equities as a stable mix to be used in most portfolio construction.

Many financial planners feel that listed products, such as equities, hybrids etc are too time consuming to research and monitor.How do you research and select these securities?  How do you manage the monitoring process for listed investments?

I would have to say that we are fortunate in terms of the information provided via our dealer group Lonsdale. They provide us with an equities model portfolio and provide research in respect to hybrid investments as well. In terms of warrants I have been overwhelmed with the amount of e-mail and print material that is available from warrant issuers.

In my experience it has been relatively easy to track warrants via the information provided from the issuers and I can't imagine advisers not having access to equities via software updates or wrap/ master- trust facilities.

Listed investment products don't offer ongoing commissions -how do you maintain your remuneration when using these products in client portfolios?

We have moved to a fee for service regime. We also have chargeable service agreements for ongoing services that we provide as part of our terms of engagement. We also have moved to provide other planning modules that are chargeable and are continuing to develop.

Do you use a wrap account or other type of platform for the administration and reporting of these listed investments? 

We do use wrap accounts and some master-trusts that do provide reporting on listed investments. We also receive data feeds that update our database, client administration & planning software.

For how long have you been advising on listed products? Why did you start advising on listed products?

We have been involved with listed products for 5 years or so but, our movement into hybrid products warrants has really only taken place over the last two years. Our entry into these newer areas has been slow and somewhat cautious however, we've become more comfortable with the use of these products.

Have you done any specific education programs/courses on listed products?

We felt it necessary to take part in some education sessions that are available through the ASX We also attended quite a number of warrant issuer sessions and stock briefings via our dealer group and other broking firms.

In the future will you offer clients advice on any additional listed investment products other than the ones you already use? If yes, which ones?

We feel it necessary to expand the education of clients on gaining access to the use of options and exchange traded funds.

Can you offer any advice to financial planners wanting to learn and start advising on listed products?

I think it is part of the expanding universe of product that is available to us all as advisers. It allows us to help educate clients as to the options and opportunities that they have in terms of investment.

Speak to warrant issuers, broking houses etc, there is also plenty of information available through the ASX. They provide education sessions that you can attend and they are willing to assist in the sessions designed to help educate your clients.