Having worked in the industry for more than 40 years, Paul Tynan has lived its evolution and is now a staunch, frequently outspoken supporter of what he hopes will be its revolution.
A proud country boy, Tynan got into financial services by way of an accounting degree because “it was just what you did in those days.”
Never one to sugarcoat, Tynan says he realised he “had too much personality and liked talking to people too much” to remain an accountant and joined AMP’s corporate superannuation division in 1975. After 10 years in various administrative roles, Tynan became one of AMP’s first superannuation consultants, eyeing an opportunity to be a part of something big.
“Everyone goes on about how super was started in 1992, but it wasn’t. In 1987 the national wage commission was getting ready to give everyone a 5% pay rise and Paul Keating and his mates decided instead to give everyone 2% and put 3% in super … Our young people should be getting taught this in school because this was life-changing stuff,” he says.
Soon Tynan ventured into the world of financial advice, with the independent adviser segment front of mind from day one. In 1989 he went out on his own, establishing Inamps; a wholesaler of AMP investment and superannuation products to independent financial advisers.
The venture changed the way AMP products were distributed and was so successful that in 1994 AMP acquired Inamps from Tynan, along with the $800 million in funds under management it had accrued.
The mutual then enlisted Tynan as Victoria/Tasmania state manager for AMP Affiliate Services and later as South Australia/Western Australia state manager for AMP Adviser Services. In 2002, he was seconded to serve as head of UK platform sales, his final role with AMP before leaving in 2003.
Leadership, distribution and business development roles with boutique financial planning practices followed. Having always worked with IFA practices, Tynan was now working in them and his eyes were opened to the need for dedicated merger and acquisition expertise in the sector.
“I got into M&A because we are terrible at it – business owners are losing money all the time and they shouldn’t be,” he says.
The self-described eHarmony of financial services, Tynan established Connect Financial Service Brokers in 2011 to matchmake the perfect buyers with the perfect sellers.
“Succession planning is one of those things that everybody talks about but nobody really does. The dealer groups, the associations; they say they’ll help but they don’t bring people together and they don’t help transact. I transact.”
And increasingly so. The last few years have proved bittersweet for Tynan as he’s never been so busy. “With everything that’s been going on in the industry, I’ve had an overwhelming number of advisers coming to me looking to sell,” Tynan says.
Their primary motivation is the new education standards coupled with the increasing likelihood that grandfathered commissions will be switched off; an issue that Tynan vehemently opposes.
“I worked through the 1990s. Those products were the only products available at the time and they were designed with commissions that had nothing to do with ongoing service,” he argues.
“You can’t say those products were bad because they were the only products that could be sold to consumers at the time. You can’t take them away because then you take away people’s livelihoods. You cannot change history.”
Instead, Tynan is urging the Federal Government, regulators and industry to focus on the future of advice and putting the client first. One thing he believes needs to happen to ensure the sector is sustainable and client-centric going forward is an overhaul of the current AFSL regime.
“The institutions and ASIC are not embracing this client-first principle and are pushing back as they see this as losing control and not in their self-interest,” he explains.
While the outcome of the Royal Commission remains to be seen, if the industry is allowed to continue operating as is, Tynan anticipates we will witness a ‘perfect storm’ fuelled by mature-age planners, education requirements, over compliance and the obvious failing of the licensing regime as demonstrated by the demise of Dover Financial Advisers.
He predicts more than 50% of advisers in the industry will exit over the next six years.
If this eventuates, the number of advice practices on the market will soar into oversupply sending business valuations south, providing Tynan with plenty of work but making the job much more difficult.
“I feel for the business owners, and I want to be responsible and get them the best deal possible. When you’re a small business owner, your business is your superannuation,” he says.
“The actions of our industry have been a double-edged sword. The regulator and the institutions have made it impossible for young people to want to come in and damn near impossible for the oldies to get out.”
Nevertheless, Tynan firmly believes that small business is the future though and acknowledges it will likely be some time before this future arrives.
“I don’t think there is a place for the big institutions in advice anymore but all of the structures in place are for their benefit. A big part of the problem is that ASIC is made up of corporate types and what they need is to talk to a couple of grey-haired practice owners to actually get a taste of the real world,” he says.
It’s not just Australian small businesses that Tynan is passionate about seeing succeed. In addition to being an international consultant for a Malaysian advice firm, in 2015 he established Connect ASEAN to link like-minded Australian and Asian businesses to explore investment and partnership opportunities.
“The next 50 years will be all about Asia and we have no idea how to do business in Asia. Every time we go into business in Asia we come home with our tail between our legs so we need to start learning,” he says.
He is no less focused on Australia however, particularly its consumers.
“I laugh every time I hear about this huge intergenerational wealth transfer that’s apparently going to happen. I can tell you now that my generation will not be forwarding any capital on to our kids because we will need that money to retire,” Tynan says.
In the future, people can’t afford to retire, he warns. “I’m sorry, but life expectancy is on the rise and so is the cost of living.”
Despite the gloomy outlook, Tynan says there’s never been a better time for financial advisers.
“Over the next four decades there will be unprecedented demand for new channels of advice in aged care and residential living; assistance with social security and pension requirements; estate planning; exit and succession of SME business owners; and self-funded retirees,” he says.
“The need for advice is the one thing that won’t ever go away.”