Financial Standard
1 May 2023 | Volume 21 Number 08
A champion for evidence-based investing, Mancell Financial Group founder and managing director Peter Mancell tells Karren Vergara how this investment philosophy helped bolster his practice and inspired him to co-write a book.
With an entrepreneurial spirit, a young Peter Mancell felt in his bones that being self-employed, he could build a successful business from the ground up.
Back in 1980, when Burnie-based Mancell Financial Group was established, MLC provided him that opportunity as a licensee. But in 1989, Mancell became “frustrated with the training focus on selling products” and began abandoning the institutional influence.
He decided that the business would charter its own course. Over a decade later, at the turn of the century, Mancell set major changes into motion. He reimagined MFG’s value proposition and operations by adopting an evidence-based philosophy or a factor-based approach to investing.
“Investing is about hard evidence that’s validated over long periods of time, and anything other than that is speculation and, sadly, relies on luck,” he says.
“We only want to use investment processes that are well and truly proven by people that don’t have a vested interest in the outcome. That way, we’ve got evidence that we think investors can rely upon. I embraced academically proven, evidence- based investing in the early 2000s, which was about halfway through my career, and it is something that I wish I’d learned earlier.”
For the last 20 years, not having to speculate about financial markets has been a boon for the practice.
“Since then, we have operated a simpler, more manageable business. Our clients across the whole group get a more consistent outcome, because we use the same investment process.
The cost of investing is lower, and the portfolio results are more reliable,” he says.
Forty-three years later, MFG has grown to a practice of 15 staff members with funds under guidance of $450 million.
MFG is accredited as a fiduciary financial adviser with the Centre for Fiduciary Excellence (CEFEX), meaning that it is only one out of a handful of certified firms in Australia that adheres to the utmost ethical and legal standards by placing clients’ interests above all else.
Under the MFG umbrella sits FYG Planners, which Mancell also oversees as the managing director.
FYG helps advice practices that typically operate on a fee-for-service basis to build better businesses by also putting clients’ interests first and foremost.
Mancell was so enthralled with the tenets of evidence-based investing that he joined forces with like-minded colleagues from Australia and New Zealand who shared the same philosophy to form the Asset Class Investors Group in the early 2000s.
A few years later, it linked with advisory organisations around the world to form the Global Association of Independent Advisors, a collaboration of 20 global financial advice and wealth management firms, based in Geneva, Switzerland.
The group regularly meets in one of three geographic regions each year for about three days. In 2014, Mancell was invited to be GAIA’s first chair and did so until 2018.
Members also reconvene regularly virtually throughout the year, sharing everything from thought leadership and best practices to the hard figures such as profit and loss, and funds under management.
Mathematics has always been Mancell’s strong suit. After completing high school in Lismore, Mancell packed his bags for the Big Smoke, studying a science degree and majoring in applied mathematics at the University of Sydney.
Mancell moved to the Apple Isle to pursue a cricket career and played a couple of seasons of Sheffield Shield Cricket for Tasmania. Mancell comes from a one-income, seven-children family. Every child was a gifted athlete.
“We didn’t have lots of money, but there was a lot of love. I was very fortunate to grow up in a loving home,” he says.
His eldest sister Judith was the Australian amateur golf champion twice and is a member of the Australian Ladies Professional Golf Hall of Fame. Lesley was an elite hockey player, while Sandra excelled at swimming.
Eldest brother Ron played golf with a handicap of six and is now a retired lieutenant colonel. Younger siblings Glen and Diane were both New South Wales school golf champions.
His cricketing career wrapped up at the end of 1992, when he retired at age 32. “At the time, my wife was soon to have our second child and I felt that I had played for long enough and wanted to devote my free time to helping her raise our two wonderful girls,” he says.
“I now look back and know that the Tasmanian cricket selectors did not need me anymore.
And that was really the catalyst for me to get serious about building a business as opposed to merely being self-employed.”
Mancell believes that good financial advice that’s implemented in a disciplined manner can change people’s lives – so much so that he helped pen a book.
Last year, Mancell published Your investment philosophy: A guide to managing wealth and protecting it from fraudsters, marketers & doom merchants, with colleague and communications expert Daniel Crowe.
Mancell and Crowe argue that investing is not a skill – but a set of principles bound by discipline.
The authors discuss five starting principles that form the bedrock of evidenced-based investing as an alternative to looking for the “next hot company, sector or country to boom” or forecasting “the next financial apocalypse”.
Not only is this narrow focus on trying to control and react costly and exhausting, they say it is also destructive and they “to aim to free you from it.”
They remind us that our investment outlook should not be formed by a “scrap of information here, or an old wives’ tale there or various fallacies and poorly informed views, all washed down by an inflammatory cocktail of media misinformation.”
Instead, it can be guided by principles that are backed by hard facts and evidence.
Mancell credits Crowe for encouraging him to publish a book.
“Over the years, he helped me compile different documents about investment markets, investment planning and investment theory. MFG has had a very strong academic background in its approach to managing investment portfolios.
Daniel said, ‘You’ve got so much material, why don’t we compile it into a book?’” Mancell says.
“I had the numbers and information, and Daniel would polish the messaging because that’s his key skill. I’m good with the facts and history, while Daniel is the storyteller.”
At the outset, it seemed like a good idea to Mancell. But he wasn’t completely sure.
“But since it has been published, I can say that I am very pleased with the outcome. The feedback that we got since the October launch has been exceedingly positive, which proves that it was a worthwhile project,” he adds.
Having distilled life-long investing lessons into a book, Mancell hopes that others can learn from it and help them make smart decisions with money and avoid the traps and pitfalls. Looking to the future, he also hopes that his legacy will ripple even further.
“We want to continue to have the privilege to meet great people to live their lives the way they want, free from worrying about money. We’ve managed to do that now for over 40 years and that’s incredibly satisfying,” he says,
When it’s time to hang up his boots, Mancell trusts that MFG will only go from strength to strength, thanks to a good group of colleagues who will carry the torch.
“We have a high degree of optimism that an intergenerational transfer will allow the business to continue to support the people in our community, many of whom have trusted our services for a long time, well after my career has concluded,” he says.
