Andep was started by Dennis Barton in 1982 and he is still a director today. Andep is and always has been unaffiliated with any banks and other financial product providers.
Andep started as an unincorporated business “Analytical Independent Investment Consultancy” as an offshoot of the actuarial practice of its founder, Dennis Barton. The trigger for Andep’s establishment was a comment by a fellow member of the Superannuation Board of Western Australia (now GESB), which Dennis chaired at the time, about the poor advice given to a patient of the board member’s medical practitioner wife. At the time, most investment advice was dispensed free of charge and advisers were remunerated by commissions up to 8% of the sums invested. The conflict was obvious.
Dennis sought and obtained an Investment Advisers License.
Andep was the first fee based investment advisory practice in Western Australia and one of the first three in Australia. For three or four years, Andep and others participated in a lively debate against “Sellvisers”, but the industry barely budged. Fee based financial planning survived as a niche, but did not overtake the old model.
As the funds management industry relied on commission based distribution, Andep received commissions (both initial and “trailing”), but passed them through a trust account back to the investors.
Consistent with the “Analytical” part of Andep’s name, research was important from the outset. Linda McDonald (now Marson), Dennis’ assistant, set up the practice’s research function, which was acknowledged by fund managers as industry leading.
Linda is the only member of each of the three groups of Andep’s people of which it is very proud.
- Those who worked multiple stints with the practice;
- Those who were trained and promoted within the practice and
- Those who went on to successful careers elsewhere in the financial services industry.
Research continues to play an important part and provide a base for Andep’s advice.
In 1986, the unincorporated practice became Andep Pty Ltd (later changed to Japhener Pty Ltd) and the Andep Staff Unit Trust (ASUT) was given a 40% holding in the company. Its directors were Dennis Barton (Chairman), John Coombes (Managing Director) Jacqui Le-Fevre, Ian Sanderson (independent non-executive) and Brad Martin (a staff elected).
In the time leading up to the 1987 stock market crash, Andep became increasingly cautious in its advice. This minimised its client’s losses in that crash. This approach was repeated in 2000 and again in 2007.
By its tenth anniversary, Andep had a complement of six advisers and their support staff (pictured with people from the actuarial practice celebrating that occasion).
- Back row (L-R): Dennis Barton, Ken Barrett, Dick Haynes, Kerrie Russell, Ross Nayler, Brian Baynam
- Front row (L-R): Stephanie Taylor, Cheryl Farley, John Coombes, Con Ariti, Bob Miller, Fiona McArthur
In late 1992, tensions emerged within the business with the managing director being invited to resign in December and a meeting of the staff shortly thereafter inviting the chairman to resign. From January 1993, Dennis Barton had no role in the management of the business. The business was managed by Mr Coombes. In July 1993, Mr Coombes’ signed a five year contract to serve as managing director.
In late 1996, Mr Coombes sought a release from his contract. This was granted and Mr Coombes left the company, taking clients in lieu of his equity through ASUT and commencing his own practice. His departure completed, with one exception, the turnover of the staff who had celebrated the tenth anniversary.
The removal of the Mr Coombes’ client base reduced the practice’s revenue and thus capacity to support its research function. Within a year, agreement was reached with Perpetual Trustees WA Ltd (a subsidiary of Perpetual Ltd) for Perpetual to employ all but two of Andep’s staff and for Andep to offer clients on formal advice contracts transfer to Perpetual. A “reduced” Andep, managed by Dennis Barton, continued to provide advice to clients who were not on formal contracts. Of the two staff not employed by Perpetual, one joined Jacqui Le-Fevre’s firm Simmonds Le-Fevre (and remains there at the time of writing (October 2013) and the other remained with Barton Consultancy until he obtained other employment.
After the sale to Perpetual, Andep continued to provide ad hoc advice to existing and new clients, but, in the industry climate of the time, made little effort to find new clients.
Andep’s owner, Japhener registered the business “Discount Investment Originators of Australasia” (DIOA). DIOA provided a vehicle for clients to make investments of their choice without paying initial commissions and investment and financial planning information on its website. For facilitating clients’ commission free entries, DIOA received trailer commissions.
Changes in legislation replaced Investment Advisers and Security Dealers licenses with Australian Financial Services Licences and with effect from July 2003, Japhener was granted AFSL 230176.
In 2013, more than thirty years after Andep and others highlighted the conflicts involved in commission based remuneration, community and legislative change destroyed the commission remuneration model. Now, a new conflict has emerged from the coalescence of significant parts of the financial advisory industry into a virtual bank owned oligarchy. This creates a need to reinvigorate Andep and offer a new generation analytical independent financial planning.
The “new generation” Andep started in the second half of 2013. You are welcome to join us on that journey.