1. business and industrial

“The difference is they
see me and my family
as the client, not just
my business...
Garry and Will Austin, GAZMAN
...that perspective makes such a
difference to the way they approach
our relationship.”
Garry Austin, GAZMAN
“Increasingly, we see
ourselves as wealth managers
to our business owner clients.
We seek long-term
relationships and provide
high-value innovative services
focussed on the owner,
not just their business.
The integration of this service
delivery is unique.”
John Clark, Chairman
Contents
Building your business 3
Protecting you from risk 5
Fordham Wealth Advisors
Keeping it in your family 7
Specialisation Advising owners of private businesses
Your exit options 9
Key areas of practice Tax and accounting, investment management, strategy and planning
Preserving your wealth 11
People Approximately 200
Transitioning your wealth 13
1
Building your business
“We have big plans. Today, nine successful outlets. Soon we will double,
then double again. They help me do this and manage my exposure to risk.”
Simon Crowe, owner Grill’d
2
Business ownership allows individuals to create
Business owners benefit from the objectivity and
and grow something very special. Something which
breadth of experience of our specialists. This sets
they know and understand. Something in which
the direction for change and is invariably a turning
they shoulder all of the risks and enjoy all of the
point in the lives of many business owners.
rewards. It’s theirs.
Issues typically addressed include structure,
But it can be lonely out there.
growth, funding, marketing, people, acquisitions,
equity, participation and problem solving.
Right from the start (and regularly over time)
Through this, the relationship becomes one
Fordham directors take our Business Services
of proactive involvement in all aspects of the
clients through an intensive strategy process.
business.
During this time, we challenge our clients as to their
concerns, strategies, goals, resources and rewards.
Grill’d
Specialisation Healthy burgers
Growth First store was only opened in 2004
Stores Nine
People 25–30 per store
Obviously, Fordham is not your typical accountant!
3
Protecting you from risk
“They [Fordham] have totally changed our lives.
When we met them nine years ago, we didn’t know what we were missing.
We know how to make great gears, and they know how to build great
businesses. They worked with us and taught us how to professionalise
our approach. They help us manage our risks.
4
5
That’s why I keep referring my colleagues to them.”
Gordon New, Managing Director Ronson Gears
The business is usually a means to an end. Its
Is tax being minimised through long term
role is to generate income to support the owner’s
structuring or short-term, last minute efforts?
lifestyle and hopefully build a separate stream of
wealth along the way. It finally provides a one-
What would be the impact of unplanned ill health
off opportunity to generate wealth at the time of
or death on the family? Are the wills effective?
ultimate exit.
Do they address assets located in trusts and
superannuation funds?
All too often, the business is seen as the “nest
egg”. All too often, all of the eggs are in one basket.
Are family trusts and structures a mess? Do they
All too often, the owner is too busy running the
require diligence and consideration to get them back
business to look at the big picture.
in shape? Are they effective for taxation purposes?
What will happen to them when the owners die?
If something goes wrong, what assets are at risk?
What firewalls are in place to limit the impact of a
Fordham helps clients understand the issues,
financial disaster?
help set the agenda for getting back on track and
manages the resolution of the projects from issue
How long is it since the structure was reviewed to
identification and prioritisation through to the
ensure that income taxes are being legitimately
successful conclusion.
minimised? Have recent tax legislation changes
made the ultimate disposal of the business
unnecessarily exposed to capital gains tax?
Ronson Gears
Specialisation Gear manufacturing and exporting
Turnover $10 million
Ownership Now second generation
People 36
We help clients sleep at night.
Keeping it in your family
“We were with a big accounting firm, but then our bank introduced
us to Fordham.
6
We needed help to untangle our succession plan, which had become
over-complicated, and had been unresolved for quite a few years.
Fordham were talented and persistent. With their help, we sorted
through the issues, and were both thankful and impressed.
The business remains in the family, and Fordham’s approach and effort
gave us the confidence to switch all of our accountancy and taxation work
to them. With over 4,000 customers, 24,000 products, six locations and
100 staff, we needed a long-term partner who took the time to really
understand our ethos and business.
Looking back, talking to Fordham has turned out to be a great decision.
With Fordham’s help, we’re continuing to remain an integral part of the
lock and security products industry in Australia.”
Mark Johnson, owner Locksmiths’ Supply Company
One hundred years ago, young adults left their
Proper planning can manage succession issues and
parents’ farms and sought a different future in
provide a framework to facilitate a transition of the
the cities. Today, Generations X and Y are making
business to the next generation. It is imperative that
similar decisions. Not only are their career choices
children are not set up to fail…especially in the eyes
varied and interesting, but their attitudes to the
of the numerous participants inside and outside of
family business are...well, different to those
the business and family.
of their parents.
The process must be managed.
With broadening generation gaps and a capital
market hungry for well run private businesses, the
Similarly, it is important that the children value
family business now rarely sees the next generation.
their opportunity. Any transition from student to
employee to management and ultimately to owner
But it can.
must be carefully planned and openly discussed.
Rights and responsibilities for all family members
must be understood.
Locksmiths’ Supply Company
Throughout Melbourne, Fordham is well known for
Specialisation Wholesale suppliers to locksmiths,
its family business advisory methodology and its
hardware and building industries
success in helping family business owners keep it
Ownership Third generation
in the family.
Coverage Australia and New Zealand
People 100
7
Your exit options
“When we met them [Fordham], our accounts were outdated and not up to
recognised standards, we didn’t have stock control and worked out of nine
factories. Our massive growth had taken its toll and our continued expansion
caused us to look for a more professional approach.
8
It took two years and they had our business on track. We put in systems,
structure, reporting and accountability. This preparation equipped our
business to become more saleable and attract the interest of a major
global company.
They ran our sale process and we got a fantastic outcome. They have even
helped us protect and invest our money...tax effectively of course.”
Maurice Smith, former owner Allcare Disposable Products
If you were selling your family home; you would be
As with most engagements, proper planning can
unlikely to sell to the first stranger who knocked on
help prepare the business for sale, and maximise
the front door. Most likely, you would first attend
its value on exit. Whether it be in six months or six
to repairs, add some fresh paint and tidy up the
years, different sale options should be considered
garden. You would engage the best professionals to
and the most appropriate to the specific business
help you properly represent and promote your home.
type identified.
And so it should be for your most valuable asset…
Tax considerations are always important. The right
your business.
advice can make millions of dollars of difference.
Fordham helps clients understand the valuation of
The sale process itself requires extensive project
their business, how to build that value and how to
management with the production of an Information
optimise and time an exit from the business. We
Memorandum, instruction of legal advisors,
also help clients appreciate the importance of a
promotion within the constraints of confidentiality,
potential strategic fit with any future owner and how
management of interested parties, hosting due
that fit can be identified, marketed and exploited
diligence enquiries and ultimately execution of a
strategically. The various types of exit options are
sale agreement.
always analysed.
Finally, after well-deserved holidays, we help
owners to have a strategy in place to remain
mentally challenged and a plan to create
Allcare Disposable Products
Specialisation Packaging and safety products
Turnover $24 million
Ownership Now sold
Sale outcome Better than we ever hoped!
meaningful identity in their post-ownership period.
9
Preserving your wealth
“We ran a great business. We understood it and we were diligent in our approach.
Investing is different. We needed guidance, rules and day to day help.”
Garry Hetherington, former owner Holiday Hub Beach Resort
10
Business owners usually excel in building wealth
Fordham’s clients benefit from a unique approach to
within their business (Active Wealth) but frequently
maximising wealth based around strong beliefs in:
do not apply these skills to managing wealth
– Independence
outside the business (Passive Wealth).
– Long-term focus
– Integration
Building, maintaining and preserving Passive
– Risk mitigation
Wealth requires patience and expertise. It requires
– Transparent, commission-free fees
an understanding of goals, objectives and risk from
– Client reporting and involvement
the family’s perspective rather than the business’s.
– Strategies based on business fundamentals
It requires careful consideration of structures
– Client control
and entities in terms of taxation and protection;
consideration of family from estate planning
Full details of services provided are available in the
perspectives and consideration of lifestyle
Financial Services Guide provided to all prospective
and security.
wealth management clients.
Given a Financial Planning industry with a history
of secret commissions, a lack of transparency
and independence, poor skills and very bad
investments, it’s no wonder that business owners
seek to do it themselves.
Holiday Hub Beach Resort, Pambula Beach
Specialisation Amazing family holidays
People 40
Ownership Now sold
New roles To help others in our community
11
Transitioning your wealth
“We were looking for an accountancy firm to be a real business advisor,
not just one to balance the books...”
Cathy Grant, business owner Grant Day James
12
It is remarkable that business owners let their
The end result should be a manifest containing
wills become so old and out of touch. Some don’t
such documents, structural explanations and
even have one. After building wealth in trusts and
other information necessary to provide guidance to
superannuation funds over many years, owners are
survivors as to how to deal with the complex affairs
often surprised to discover that these funds are not
of the deceased. From bank accounts and insurance
covered by their wills. The destiny of their wealth is
details to suggestions of how to dispose of the family
left in the hands of various trustees.
business. It can make all the difference.
The consequences can be horrible. Poor
Fordham calls this Inter-generational Wealth Planning.
estate planning is probably the single biggest
contributor to the destruction of family harmony
after the parents have passed away. These sad
consequences are usually preventable.
Estate Planning involves consideration of
businesses, structures, trusts, investments, children
and grandchildren, trustees and appointors,
spouses, philanthropy, lifestyles, life expectancy
and health. Proper planning integrates these
components. Fordham manages the various third
party professionals and family members to ensure
timely completion and understanding.
Grant Day James
Specialisation Advertising
Ownership Partnership of three families
13
Services
For the business
For tax
For wealth
Business planning
Tax management
Succession planning
Business structuring
Structuring
Wealth accumulation
Benchmarking
Research and advice
Shareholder agreements
Profit improvement
Capital transactions
Inter-generational wealth planning
For capital restructures
For investment
Sale of business
Portfolio management
Valuations
International equities fund
Acquisitions/MBO
Garnet Superannuation Fund
Financing assistance
Divisional director contacts
Business advisory
Corporate finance
Investment services
Peter Carroll
Michael Sutherland
Paul Ashworth
+61 3 9611 6631
+61 3 9611 6706
+61 3 9611 6700
Taxation
Motor dealer services
Superannuation
Brendan Henderson
David Buckley
Anita Collings
+61 3 9611 6631
+61 3 9611 6601
+61 3 9611 6600
Strategy and planning
Chris Alp
+61 3 9611 6631
Fordham Wealth Advisors PTY LTD
ABN 24 752 998 186 ACN 120 438 155
Rialto Towers, Level 35, South Tower, 525 Collins Street. Melbourne Victoria 3000. Australia
GPO Box 4369. Melbourne Victoria 3001. Australia
T. +61 3 9611 6611 F. +61 3 9611 6666 W. www.fordhamwealth.com.au
© 2007 Fordham Wealth Advisors. All rights reserved. “Fordham” and “Garnet” are trademarks owned by Fordham Pty Ltd.