Finding the right career to aspire to didn’t come straight away to Simon Madder. The Managing Director of Prime Financial Group – an ASX-listed company with a market capitalisation of $25 million specialising in accounting, wealth management and capital – looked at a couple of options.
At 16 he was a top state tennis junior and Madder thought being a professional tennis player might be an option. After finishing his VCE at the prestigious Melbourne private school Carey Grammar, he went to La Trobe University to study commerce. His father Peter was a successful chartered accountant with his own firm and there was the opportunity to go to work with him.
However, just six months into his commerce degree his aspirations of becoming a professional tennis player were too much to resist, so he decided to give it one last chance. He went to the US and Europe and also had a stint at the John Newcombe tennis ranch in Texas.
He even considered accepting a tennis scholarship to a US college. However, after a few months struggling on the circuit “I figured I wasn’t going to be a world beater and tennis was great but it wasn’t something that I really loved.”
“So there I was. I had quit trying to be a tennis professional and had quit six months into my commerce degree. I had never really wanted for anything but had nothing.”
Fast forward to today and Madder’s Prime Financial Group advises over $1 billion in client funds plus provides business and accounting advice to some of the most innovative companies in the country.
Uniquely, Prime also has joint venture partnerships with 35 accounting firms of various sizes throughout Australia. So what changed in the now 41 year-old Madder’s life? “After coming back from overseas I realised it was time to buckle down and make something of my life.”
He went back to La Trobe University and finished a three year commerce degree in 19 months.
During this time he also worked part-time in his father’s accounting firm. It was then that Madder found he wanted to do something different with his career. Madder soon struck on a unique idea when he told his father that accounting on its own wasn’t interesting enough for him.
“My father said he had an idea that he had been thinking about for some time which was to get accountants involved in wealth management. He thought it strange that we had all these clients but then handed them over to someone else when they wanted financial advice about how to invest their money and plan for retirement.” That was in December 1997.
In January 1998 Simon, then aged 23, and his father set up Prime Financial – a hybrid firm bringing together accountancy and wealth management into an all-in-one service.
“The early stages were hard. We were pretty close to running out of capital a couple of times but we knew we had a model that could be successful.”
SIMON MADDER, PRIME FINANCIAL
Two early foundation investors helped kick start the business. Looking to raise $4.5 million in capital, one-third came from Madder family interests and one-third each came from two prominent Melbourne families – all clients of Peter Madder’s accounting firm.
The Madders’ vision of Prime Financial in the late 90s was a business that could enable accountants to offer their clients accounting and wealth management. In more recent times it has grown further – adding capital advice to provide its clients with what is literally an end-to-end solution. Since its start almost 20 years ago, Prime has now become an embodiment of Simon Madder’s business values. “This is much more than what a traditional accounting or wealth management firm offers. We deal with innovation on a daily basis and need to demonstrate innovation ourselves! One of our mottos is aspire, innovate and grow – and we need to live this every day.”
“We needed to offer something different in what is a pretty cluttered marketplace. What we have done is to bring together the accountant and wealth manager to personalise and sync our advice so the client receives a complete solution.” Part of the Madders’ strategy in growing their business was to get other accounting firms involved in offering these expanded services. To this end, Prime has joint venture partnerships with 35 accounting firms around the country. “This enables us to drive a lot more value through insight and expertise to help grow accounting firms by giving them access to additional expertise as well as investing capital into their firm,” Simon said.
Prime Financial took this another step further by increasing its stake in Melbourne-based accounting and business advisory firm MPR Group Pty Ltd from the 40% it acquired in December 2015 to a 93% stake in August 2016. True to his taste for innovation, Simon said the reason for increasing the stake in MPR was because it offered something unique.
“MPR’s focus is on supporting businesses beyond accounting and business advisory with a focus on research and development for tax incentives and innovation for growth orientated businesses. It has helped hundreds of Australian businesses access much-needed R&D incentives (cash from the government) which have fast-tracked their development.
Simon said partnering with like-minded accounting firms enabled Prime to add significant value firstly by assisting them to offer a larger range of services such as wealth management, but also investing capital into the accounting firm along with the advice and expertise a larger group can provide.
This creates a win-win scenario for everyone involved says Madder. “The firms that we have chosen to partner with are all different but with one common philosophy – that clients are best served by receiving accounting and wealth management through one experience. Some firms are very growth oriented, some need to address a succession planning issue, some need to focus on the wealth management piece, and don’t have the skills or expertise to put that into place.
We are in the unique position to bring it all together, and help the firm achieve their vision, their goals and their objectives.
“For our direct clients it means we are able to offer a variety of services including wealth management and superannuation advice, business and personal planning, management and accounting, protection for business and personal capital and access to capital for growth and innovation. The addition of the MPR business, which is being merged into Prime, adds complimentary services for Prime accounting partners and clients and includes just over 30 employees and will see MPR rebranded as Prime. As part of the deal, MPR Managing Director Matt Murphy joined Prime Financial’s leadership team adding important additional expertise. “We now have expertise in grants, tax incentives, innovation consulting and capital advisory – expertise which our clients and accounting partners are now able to access to grow their business but also the business of their clients.”
In January 2007, Simon’s father Peter joined the business on a more permanent basis. Today, Peter is an Executive Director and Chief Financial Officer – and speaks highly of how his son’s ambition brought Peter’s idea into reality.
“While I might have come up with the Prime business model, it was Simon who took over the running of the company from day one. Simon built the business. I basically got out of the way although obviously provided advice and guidance as he was only 23, although a mature 23 at that!
He is still only young but he has experienced a lot in the past 20 years running his own business and the ups and downs that it has had. Peter believes Prime is in a great position to grow.
“The whole industry is going through a transition – primarily rationalising. Margins are tighter and the operating costs of running a business need to constantly be considered. “We have a clear plan of where we are heading – and that includes additional partnerships. Acquiring and merging MPR with Prime made complete sense.
It has a great business model and together we will be better than two single entities. “Undertaking acquisitions makes sense as growing organically can be slow but any future investment we make must be complementary to our business plan. Because the industry is changing and the way we do business is changing, scale is important. “We believe in our business model and we know it is in the category of best practice.” It’s not just the interesting business model that Prime prides itself on. Staff retention has also been strong in an industry where retention can often be difficult.
“One of our first team members was Danny Bowe, who is still with the firm 16 years later. There are several other team members well into the teens in regards to years of service,” says Simon. “We have tried to create an environment where people can thrive, but we can do better. We are given a lot of responsibility by our clients to look after their affairs – and we greatly respect that responsibility.”
Simon says Prime does not intend to rest on its laurels despite its success. “You are constantly encouraging yourself and your team to be better. You don’t really stop. Sometimes I will get up at 4 am because I have thought of something and want to capture it. On weekends I am regularly thinking about the business and the direction it is heading.
Sometimes it is second guessing yourself but in the end there is a team in place, both from a group and board level, that I know can take the business forward. “It is vitally important that we stay ahead of the curve. We want to build something that is different, innovative and has the client as the centre of our considerations.
Fortunately, no one has to push the senior team. They are their own worst enemy in wanting to do better for clients, themselves and for the firm. “I started my career as an accountant and I have had the privilege of growing up around accountants and seeing how highly regarded my father is held by his clients.
They are a member of the family. Accountants and financial advisers are in a privileged position and clients need to feel comfortable that we aren’t selling them just for another buck. They are their most trusted advisors.
Breaking the mould of accounting and wealth management is something Prime has been pursuing for the past 20 years, and Madder thinks there’s more to be done to that end.
“There is an opportunity today to be more dynamic and that is why when we look at other businesses to acquire or partner with we want to make sure they are continually moving forward and not just doing what they were last year or the year before.
SIMON MADDER, PRIME FINANCIAL
Accounting, and to an extent wealth management, can be seen as solid, staid professions but that is not what I would say about the people I work with. There is an opportunity today to be more dynamic and embrace the needs of business owners and family groups. Simon explains that the way Prime is structured is to provide a group of services to get its clients into a better place. “It is not about being a jack of all trades and master of none.
This is about providing expertise across our key pillars – accounting and business advisory, wealth management and capital – with the ultimate goal of improving peoples’ livelihood. “Our growth plan is to drive Prime and to also ensure every business that we have a joint venture with is growing and delivering on the client promise. That is a non negotiable from my perspective.
If you stand still for too long you can become irrelevant very quickly. “Our aim is to be more innovative – we want to know what our business is going to look like in 3 or 4 years time. We are investing in people and technology. No advisory firm in the future can be successful if it is not people, client and technology led.
There is science behind our marketing for example – we need to know where and when to be investing our time.” Simon is also adding to his own knowledge and last year was part of a group of 10 Managing Directors that went on a global innovation tour that included tours of US financial services and consulting firms, technology companies, creative and design agencies and firms such as LinkedIn.
“The aim was to see how these companies were looking to the future and how they would get there. I found it a great way to stretch my mind because these companies are testing the boundaries – which is what we want to be able to replicate.”
SIMON MADDER, PRIME FINANCIAL