Getting help with your wealth from a Shadforth Private Wealth adviser isn’t cheap. The company offers premium advice to its 10,000 high-networth clients across Australia, and makes no apologies for charging premium fees. That being said, CEO Terry Dillon can’t recall anyone complaining about the cost of its services. “The one thing I don’t get from clients is, ‘I think your fees are too high,’” he says.
“What I hear from them is, ‘I love what you’re doing. I want more of it, I want to hear from my adviser more. I want to see you more. You help me sleep at night and I want that to continue.’” While the fees may be on the premium end, clients agree that they represent extremely good value.
Many have been with the firm for decades and have relied on its industry-leading advisers to navigate numerous market shocks, as well as shocks in their personal lives. The company’s overall client satisfaction level last year was 89 per cent – the highest it has ever been – while the net promoter score for its advisers was an impressive 70 per cent.
“We’ve done that survey every year for five years and it has increased every year, so we’re very proud of that,” Terry says. Shadforth’s clients tend to invest around A$500,000 in their first year with the firm and, on average, have entrusted A$1.5 million dollars to its advisers, meaning the company manages roughly A$15 billion. “We want to use that scale to create cost savings for our clients and to give them lower-cost access to investment markets,” Terry says. “We think over time, it’s going to be compelling. Those costs will continue to come down.”
Advisers for life
Shadforth enjoys sky-high satisfaction scores partly because its advice is holistic and long-term in nature. Most of those who entrust their wealth to the firm are executives or senior professionals, like lawyers or doctors, who aim to be independent of work – not to retire necessarily, but to have the financial security to leave work if they want to. Terry proudly describes Shadforth’s team of 107 advisers as the best in the business.
We’ve got a lot of great competitors, but most of them are smaller businesses that will retire before their clients’ investment needs and advice needs are over.
“I’d trust any one of them with all of my money,” he points out. “In fact, I do trust one of them with it.” These professionals help their clients to craft customised, long-term strategies to ensure they achieve their life goals. Clients might typically come to the firm in their mid-40s with the goal of being financially independent by the age of 55. On top of that, they may want to leave the family house and A$1 million to their children, to take a holiday to Europe once a year and help their kids with their first house.
“So we say these are our goals, and everything we’re going to do is about achieving those goals,” Terry says. “It’s a great conversation to have. With the help of technology, we can build scenario models, lifetime cash flow models and keep bringing people back to the reason that they came to us.” Helping its clients stay focused on their long-term goals is perhaps the most valuable thing that Shadforth offers.
“What we find is that there are a lot of things we do that are incredibly important and make our clients a lot of money,” Terry says. “But what they value most is the long-term scenario planning – the what-ifs. What if they buy the holiday house or retire a year earlier, or help the kids earlier? That’s where they see the real value in what we’re doing.”
Shadforth will celebrate its 100th birthday in 2024, and Terry fully intends for the company to be around for at least another hundred years, thanks to a multigenerational outlook that is a key reason clients feel safe with the firm. “We’re in the business of making and keeping 50-year promises to clients,” Terry says. “We’ve got a lot of great competitors, but most of them are smaller businesses that will retire before their clients’ investment needs and advice needs are over. Very few of them are actually set up to deliver on a 50-year promise.”
That means entrusting your wealth to Shadforth is not necessarily about a relationship with an individual adviser; the client’s relationship is ultimately with the firm, which will be there to support them even as advisers retire. “We want to be the last advisers they ever hire,” Terry says.
Hard to leave
It’s not just the clients who spend a large part of their lives with the company; its advisers are also extremely loyal, with an average tenure of 15 years. “They’re in demand from all of our competitors and they could work anywhere. They are among the best in the industry,” Terry says.
“Typically, you join Shadforth for life. It’s very hard to leave because if you buy into what we’re about, it’s a pretty compelling value proposition.” Terry has been in the advice industry for 25 years, and therefore has a deep understanding of and respect for the work his advisers do. His experience also means he knows exactly what he is looking for when he hires new recruits – something he will be doing more and more as Shadforth expands.
There are some 500,000 families in Australia with more than A$1 million of liquid assets, according to Terry, and he sees enormous potential in reaching a large proportion of these people in the coming years. The main challenge in pursuing this growth is finding enough top-tier talent to build up his team of advisers. He intends to maintain a ratio of 90 clients per adviser to ensure that the quality of services the firm offers remains extremely high. “We’re not interested in growth for growth’s sake,” Terry says.
“If we have 10,000 client families, that’s 10,000 client families who we think will achieve all of their goals. But at the same time, if we can, why wouldn’t we help 11,000, 20,000 or 50,000? Or why not 100,000 Australian families over time?
“Why can’t we actually become the equivalent of PwC or McKinsey for wealth management and advice in Australia? Someone’s going to do it really well, and we’re probably in the best position to do it, and we’re incredibly ambitious to help more people.”
The ultimate goal of every team member at Shadforth is to create a financial advice firm that they are happy to use themselves and happy for their families to use. Terry lives true to this goal; both of his parents trust the firm with their money. “It’s a very simple formula,” he says. “Act like owners. Spend money – or don’t spend money – like it was your own, and build an advice firm that you’re proud of.”