Financial planning and the passion for helping people

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(Pictured:  Ian MacRitchie)

Ian MacRitchie is a veteran financial planner with an A-list client list who still likes helping people – a character trait that has made a lot of his clients happy and, more importantly, given a better chance in life for many underprivileged people in Timor Leste (East Timor). He spoke with Greg Bright about putting something back as well as the world of financial advice.

One of the things that makes Ian McRitchie, a principal of IMR Financial Advisors in the Sydney CBD, angry is the way many of the international fund managers which have set up shop in Australia do not fully become a part of the local industry. They don’t give as much, or any, to the industry charitable fund raisings, he says. “As an industry I believe we generally do a good job and most people want to give something back,” he says. “As an industry we have a big heart. But some foreign companies, in particular, are not pulling their weight.”

MacRitchie should know too. He has raised – and given – a lot of money in the charitable space and gathered some well-to-do industry people and clients into the fold, usually recommending to each that they set up their own charitable trust in the process. He rattles off some names of patrons for the eMerge Foundation, for instance, which he backed as his first foray into charities in 2001.

Maria Bashir, the former NSW Governor, is the patron of the foundation, which is an educational body working in Timor Leste. Some “industry patrons” include: Linda Elkins, Chris Cuffe, Stephen van Eyk, Amanda Gillespie and Geoff Lloyd.

“I set up the business [IMR Financial Advisors] in 1991 and after about 10 years, I had the mortgage under control and the school fees covered so I thought about doing other things. I decided to help fund a new charity to educate young African women so they didn’t get married at 13 or 14.”

The African charity effort came about because of Anne Kelly – the sister of singer/songwriter Paul – who was headmistress at the school one of Ian’s children attended. He saw some research which showed that educating women, in particular, had a positive impact on a country’s GDP. With education, they not only had a much better chance at employment and job creation, they also tended to have fewer children of their own and therefore are able to break the cycle of poverty. He gathered together some friends, held a fund-raiser, and backed her mission.

After Anne Kelly had finished that project she moved on to Timor Leste and MacRitchie and his friends continued to support her efforts, which once again has a strong education focus. The eMerge Foundation has provided 262 scholarships and seen 477 teachers graduate from the ICFP Baucau Teachers College. The educational structure is provided by th for the Australian Catholic University (ACU), of which General Peter Cosgrove, who had led the peacekeeping mission in Timor Leste, returned to Timor Leste as Chancellor. Baucau is 125km or three hours drive from Dili. The foundation also has programs to improve general health among the villages, including training “barefoot nurses”.

View eMerge Foundation website:  One of the regular fundraiser’s is MacRitchie’s annual rugby lunch, which this year was a sell-out with 540 attendees. The ACU has awarded him an honourary doctorate for his work in Timor Leste.

MacRitchie came to Australia from his native South Africa – hence the rugby lunch and various rugby collectibles around the IMR office in Sydney – in 1986 with the then Sedgwick Financial Services (now part of Mercer). He has an accounting degree with a post-graduate degree in tax law. South Africa had death duties at the time and MacRitchie became well acquainted with estate planning. Tax and estate planning still make up important parts of his work as a planner.

“In our business you have to be passionate about helping people,” he says. “One of the tings that helped us get through the GFC was that we got good advice ourselves. Stephen van Eyk [who continues to be an advisor to IMR]told us to sell out of property trusts. We added alternatives assets  which helped save us.”

MacRitchie met Stephen van Eyk at a conference in 1987 and has good reason to remember the conversation. van Eyk, renowned for his forthright views, said that the stock market was going to crash soon. And crash it did.

When MacRitchie set up on his own in 1991 he became a subscriber for Purvis van Eyk Research. The relationship evolved from there after van Eyk set up the firm which still bears his name but which he sold out of several years ago.

IMR buys research from both Zenith and Lonsec as well as taking qualitative advice from the likes of Stephen van Eyk. MacRitchie believes that the quality of research today is very good and plays an integral part in the advice that financial planners give their clients.

In 1999 MacRitchie was joined by current partner Ron Geffin, who had his own practice before linking up with IMR. Geffin is now also a director and principal in the boutique wealth manager Core Private Wealth, with David Isaacs and Wade Riley.

“We have been inundated with people wanting to buy our business,” MacRitchie says. “But we need to find someone who’s on the same wavelength… I’m not in any hurry.”

He is feeling uneasy about the markets, however, at the moment and is looking to put more protection into his clients’ portfolios. Protection strategies include alpha-seeking active extension (120:20 and 130:30), market neutral and variable beta.

“I think we need a international market neutral fund for Australian investors,” he says. “There are none that are rated [in Australia]. I have about 20 per cent of most portfolios allocated to liquid alternatives. I like infrastructure, too, because it usually has CPI adjustments [for revenue]. The thing that worries me most is the fixed interest part of the portfolios.”

MacRitchie remembers the bond market collapse of 1994. “Clients think they are protected by brands, brand-name managers,” he says. “But they’re not. My preference right now is looking for absolute returns managers in the fixed interest space.”

He says that any increase in US interest rates, which is widely tipped from next year, will have a knock-on effect. Europe is teetering once again and could go back into a deflationary position. China is slowing down.

While some of his clients prefer direct equities over managed funds, MacRitchie says that his fund manager clients, of whom he has 11, tend to prefer managed funds.

On the planning industry as a whole he believes that there needs to be more education. Everyone who works at IMR has an accounting or similar degree and then does the specialist financial planning courses such as the CFP.

“I think the industry needs more people who understand economics,” he says. “Many planners are re-treaded bankers who are taught a sales speil. You have to know that the client comes first.”

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