A little about me
As a child migrant from Sri-Lanka at the age of 2, my family came to Sydney to escape a country being ravaged by civil war. My father was lucky enough to have been accepted to this beautiful country as a skilled migrant. Having been a qualified and successful CFO level CPA, he had to restart his career in Australia as a junior bookkeeper. I watched him grind away, earning one promotion at a time until he became the National General Manager of Finance at Woolworths. From this role he was able to retire from corporate life at the very young age of 44, having accumulated a property and share portfolio sufficient to support my parents’ retirement.
With his newfound time, he did two things: firstly, he accredited himself in financial planning and investing; and secondly, he devoted his time to the rehabilitation of Sri-Lankan children affected by war. A cause very close to his heart.
With the market booming, his share investment portfolio was growing fast so (following the advice of his financial planning peers) he added gearing strategies to maximise his returns with the aim of increasing his donations to the charity.
Why I entered finance
Watching this happen, I naturally took an interest in the investment side of what he was doing. Fresh out of university with a Bachelor of Business, I joined CommSec and began at the VIP Trading desk. Here I worked placing trades and managing portfolios for CommSecs biggest clients and some of Australia’s largest investors with all the gusto and wisdom you would expect of a 23-year-old.
Broking as a business
As you may have guessed, everything changed in 2008. Geared up and caught without internet at a remote rehabilitation centre in Sri-Lanka, the market crash wiped my father out. Overnight the portfolio more than halved, and with the gearing on top, he was forced to sell the property portfolio to cover losses. Working at the VIP desk at CommSec, I saw many of my clients in a similar position.
My parents, like many of my high-net worth clients, were suddenly scrambling to cover the margin calls and panicking about their ability to survive into retirement.
But what really tore at my insides was that at CommSec the chaos was cause for celebration. Whilst our clients suffered, we were setting new records for “The most number of trades in a single day” and “Highest revenue trading day”, leading to boozy lunches and large bonuses.
Sadly, this became a common theme as I progressed through my stockbroking career.
Being intellectually curious I expanded on my university degree with industry specific qualifications whilst I was progressing my career. To my degree I added qualifications in financial advice, equities, options and derivatives, foreign exchange, margin lending, money markets, deposit and cash markets, futures and banking. I also became one of the few people in the country with a personal ASX Designated Trading Representative License in Equities and Derivatives, meaning I gained personal unfiltered access to directly place trades in the ASX CHESS system. I wanted to understand it all and the more I understood the less confident I became in investing my own money in it.
Despite all my qualifications, and rising roles, I refused to advise my clients on investing. My conscience wouldn’t permit it, as I wouldn’t personally invest in any of the options I encountered. I instead focused on understanding the products, how they operate, and became not only an expert in how stockbrokers make money but how best to run the operations. Broking is a product; I was interested in how the business of broking worked.
I was eventually promoted to the head of State One Stockbroking at the age of 33. When I took over, State One was (at the time) one of only 35 direct ASX CHESS participants. Under my tenure we grew to turning over $8bn a year of direct equities and derivatives, through a combination of old school broking, an award-winning online platform (Amscot), and as one of the major white label providers to financial advice groups.
I was now an expert in the ‘business of stockbroking’, but I still wouldn’t invest my own money in the market. The reason was simple: I knew I could make more running a stockbroking business than I could investing in most of the companies we were trading.
It’s hard to believe in investing when you meet the snake oil salesman that is the CEO or their investor relations team, or see advisors keeping their own money separate from client funds being put into yet another “great opportunity” that just came across their desk. I’ve lost count of the number of gamblers I met, incentivised to “take a punt” on a new venture because of a glossy presentation, or traders I’ve hired and fired for not performing. All of it was too short lived and felt too much like a casino.
Don’t misunderstand: I have no issue with making money from the market, and I think stockbrokers and advisors play an important role in our financial system. I just disliked the incentives that encouraged advisors to benefit from a culture of “Win or Lose we Booze”, whilst their clients risked their hard-earned money.
As Buffett put it “never ask a barber if you need a haircut” I haven’t had hair since my early 20s and I know many barbers that would still offer me their chair! Broking, like most businesses, is designed to make the company money not the clients. When the clients make money that’s just a bonus.
Meeting Teaminvest
When I finally discovered Teaminvest, it didn’t take long for me to realise that it was an approach designed by investors for investors. Starting with fundamental research eliminates the snake oil. Discussing it with others helps reduce the risk of bias and being conned. Taking your time before investing reduces the opportunities for service providers to mine your wallet by distracting from what matters.
As an outsider, Teaminvest is the solution the market is missing. Unlike broking, there is no house to bet against, or croupier suggesting just one more roll of the dice would make you rich (charging a very modest cut of course for the privilege). It’s simply investors helping each other understand business better.
From that point on it was a no brainer, I now had a compelling reason to leave the world of stockbroking. So, I did.
I met Andrew Coleman (CEO, TIP Group) and asked if Teaminvest had a role available. Luckily for me the role of Chief Operating Officer of Teaminvest was on the cards. In title and pay it may have been a step down from Managing Director of State One, but there was so much more to gain personally and financially.
It is the best thing I’ve done. I’m having a blast working with the members and streamlining operations. Slowly I’ve added to my responsibilities, and now I handle all operations for Teaminvest and our various funds.
But most importantly I know that the principles I’m learning and sharing with others actually work. And they’re designed to work for the long run because they aren’t built on picking trends, momentum, charts or other fads that I’ve studied. Instead on real research and a good dose of common sense, that allows the investors to come out in front.
For the first time in my life, I’m comfortably investing my own money alongside my “clients” although these days I no longer have use of that term, I now work for fellow members and investors. Like you my money is in our pool of Wealth Winners and wonderful funds, and I wouldn’t have it any other way.
How has it worked out?
18 months ago, I made my first investment after a Sydney Teaminvest Masterclass. Excited by what I had heard, I went back and read a few years’ worth of SMaRT reports and Annual Reports. For the first time I felt like I understood the business I was investing in, not just the projections in the presentation. It was like I’d caught a bug. Since then, I’ve added more Wealth Winners, and not only am I having fun, but I sleep very peacefully at night.
It has been great for my peace of mind. My portfolio hasn’t done too badly either.
To date I’m up over 40%, only having made 12 trades, and haven’t used any gearing nor do I ever intend to.
Even better, I now see falling prices as an opportunity not a cause for panic, or a way to clip the ticket and celebrate whilst people around me suffer hardships.
Not bad for a reformed stockbroker.
Lessons From a Reformed Stockbroker