Our guest for this new episode of #FintechInterview is Luca Mainò, Founder and Managing Partner at Consultique, which is the leading company in independent “fee only” financial analysis and advisory in Italy.
Luca, can you tell us about your professional background? In particular, why did you decide to join the Consultique team from the very beginning?
Immediately after graduating from high school, I turned down a permanent position in a bank, much coveted by my peers, and decided to enroll at the University of Economics in Bergamo. Having always wanted to be autonomous from an economic point of view, during my university studies I began to collaborate with one of the largest European financial and insurance groups, where I remained until I turned 31 years old. During these years my career progressed quickly, until I became one of the youngest managers in the group.
When I was 31, however, after a meeting with my two partners Cesare Armellini and Giuseppe Romano, I discovered the world of independent financial advisory and I got involved in the Consultique project, which immediately struck me for the ethical values it carried with it.
For more than 20 years now, we have been working with the same passion and enthusiasm of a start-up, taking up and facing ever new challenges. Our values become stronger every day, due also to the great presence of young people who work with us.
Speaking of young people, what are your tips for young students who would like to enter the world of independent financial advisory?
As with everything, passion and dedication to study are fundamental. The passion must be aimed at various financial issues, such as asset-allocation strategies, identification through the analysis of the most efficient investment tools, or the desire to gain experience in the dismantling of investment products.
Furthermore, one of the most important qualities is humbleness, which is necessary to learn the skills of those with more experience. Nowadays, Italy has a large number of independent financial advisors and professional firms, so young people have the opportunity to start their own careers within this new sector.
Finally, since the main service of independent advisory is wealth planning, the so-called fee-only financial planner must investigate various aspects concerning the assets of families (wealth, financial and non-financial risks, pensions, real estate and tax issues, etc.) and implement plans every day to achieve the life goals of its customers. For this reason, among the most important skills there are the ability to listen in order to understand the client’s objectives, empathy, an attitude aimed at solving problems and a lot of discretion and confidentiality.
Regarding the fee-only advice, independence would be a great added value for the consumer. But in Italy, unfortunately, independent advice is still considered a benefit for the few. Do you believe that finance can become more ‘democratic’ in the future?
Nowadays, thanks to independent advice, some services that in the past were reserved for clients and families with important wealth have become accessible to everyone. I believe that as independent advisors become more numerous and spread throughout the country, investors and families with modest wealth will access these services. For us, this issue is extremely important. One of the services offered by our group is to quantify the cost of the customer’s banking advice in order to demonstrate that it is not free but has a significant cost (many years ago we coined the term “hidden fee”).
What is Consultique’s mission and what are you doing to achieve this?
Our goal has always been to spread independent advice as much as possible, i.e. advice free of conflicts of interest, unrelated to the sale of financial products, released from banks and other intermediaries, and only remunerated by a fee that the client pays in a transparent manner directly to the advisor. After many years, due also to associations such as NAFOP (National Association of Fee Only Planners) or ASSOSCF (Associazione delle Società di Consulenza Finanziaria), we have managed to legally institutionalize this profession also in Italy. Now our goal is to make it known to the greatest number of people within the country.
Who do you identify as the main competitor and how do you differentiate yourself? What are your strengths?
The Italian scenario is strongly bank-centred, so the supply of banking and financial multinationals dominates the demand of households. If we talk about independent advice in the strict sense, we can say that, to date, there is almost no competition. In fact, those who do independent financial advisory are only advisors like us and fee-only advisory firms.
Our first competitive advantage, which the market is gradually learning to recognize, is precisely subjective independence, that is the fact that we receive no compensation of any kind whatsoever except what the client pays us.
A second advantage is that money does not have to be transferred from one bank to another when we go into action, but it stays where it is. We often negotiate the conditions, to allow the client to get the best at the right price from their intermediary.
Furthermore, we can range from all the investment solutions on the market, unlike traditional operators who can only recommend products for which they receive commissions.
Finally, a priceless benefit is the customer’s state of serenity and well-being that comes from collaborating with us, given the perception of having everything under control. In essence, independent advisors like us become trustees: the client uses our support and our specific skills to manage his assets and achieve his goals. This allows him to be more serene, having fewer economic worries.
The world of financial services is undergoing a very rapid technological change, also in the automated wealth management sector. How are you facing this technological revolution?
When we started in 2000, the intention was to create a web platform (Independent Financial Advisor) dedicated exclusively to independent advisors. With this tool we have semi-automated all the processes related to the regulatory compliance of the advisors and we have integrated all the protocols and procedures that allow you to operate with existing best practices in full compliance with the provisions of the supervisory authority. Today the IFAnet 4.0 Smart Platform has become an indispensable tool for almost all professionals who offer advisory services in a specialized way. Actually, we did not have to integrate technology within the business model because Consultique was already born with the technology within its model that has evolved over time to become a service hub for independent advisors.
In addition to Financial Planning, Compliance, Profiling and independent advisory software, we provide all the research that we do as a research department on a daily basis, such as Analysis and models of financial instruments and products recognized by the entire market. In fact, since 2004 we have been providing the rating model of pension funds and that of ETFs that comes out every week on “plus24” of Sole24Ore.
Furthermore, we were able to integrate applications within the platform that allow remote customer on-boarding and customer interaction within encrypted video call systems to be able to discuss delicate and sensitive topics in total privacy; all of this has been highly appreciated by customers. Technology is at the service of the advisor and the customer: “high tech, human touch” is still a valid slogan today for combining technology with people’s intelligence.
The digitization of financial advice is still a debated topic, what could be the added value of technology in financial advice?
We firmly believe that technology and human intelligence together can represent the best for an advisor who uses our services. A hybrid model is highly appreciated since the customer has a contact person (a trustee) who assists him with the help of the most advanced financial technology available. With the health crisis we have understood even more how important it is to combine technology and maximum confidentiality for the customer.
What are the main types of customers you address and the most requested services?
The first type of customers concerns families and small businesses. We offer direct advice to families who need financial support, and to small companies and small entrepreneurs who are looking for support both for private assets and for overseeing the company’s financial area. The most requested services are:
analysis of the bank reliability;
negotiation of the conditions that the bank proposes to the customer;
the implementation of strategies to achieve the family’s objectives in terms of investment and planning;
opinions on the products offered by the bank are often requested.
The second type of customers is represented by independent advisors. They rely on us for various services. First and foremost, independent advisors often need an independent research department that can produce first-hand analyses on a daily basis, which are then used as a basis for making decisions in line with what clients require. We also offer tailored technologies and software, and an academy to keep updated with what is happening in the sector. Finally, we also offer support in marketing and communication, at the level of how to create a website, how to implement a social media strategy and how to create effective presentations for events.
How are you approaching the youngest ones? What do you think of ESG (environmental, social, governance) investments that seem to be very interesting for young people?
We try to involve the youngest ones by encouraging them to have curiosity and deepen the financial issues, which often young people still do not feel close because they do not yet have important responsibilities. However, it is good to investigate these issues immediately. In doing so, we have also included many young people in our company, so there is always a sparkling and dynamic air, there is joy, and young people contribute positively to maintaining this culture, I have seen a great desire to improve in young people.
As far as ESG is concerned, it is a topic that has become fashionable today. We have been trying for many years to select ad hoc products for our customers, especially institutional ones, and to have an eye for those asset management that have an approach towards sustainable investment. Sustainable investment not only have a positive social impact, but also in terms of the mere economic usefulness, they tend to be better than an unsustainable investment.
We have noticed that ConsultiqueNOW! has become more active online, what is the goal you want to achieve through social media?
ConsultiqueNOW! is a new communication project that allows young people and savers to approach independent in a simpler and more immediate way. Every week we share videos and posts on Instagram and Youtube that aim to raise awareness of the independent financial advisory. ConsultiqueNOW! was born this year on September 1st and we immediately found a lot of success among young students passionate about finance who saw a possible future career in independent financial advice. This prompted us to organize new initiatives, such as dedicated support for the writing of the thesis and specific offers for students to participate in our training courses.