Financial Planning

Reflecting on change and opportunities in 2019

04 November 2019

Jayson Forrest

Jayson Forrest is the managing editor of Money & Life Magazine.

Marisa Broome CFP® notches up 12 months as Chair of the FPA. She reflects on a year of challenges and opportunities for the profession, as the FPA plans out the next five years. 

Twelve months ago, Marisa Broome CFP® took over the helm as Chair of the FPA from Neil Kendall CFP® – and what a year it has been! The Royal Commission, the new FASEA education standards, exam and code of ethics, code monitoring and more compliance.

You could say the last 12 months have been a real baptism of fire for Marisa, but one she looks back on as being a success.

“The first year in any role can be difficult but I have been unbelievably lucky in that I worked alongside Neil for around eight months prior to him ending his term,” Marisa says. “His knowledge of the FPA and its history has greatly assisted me, but his unwavering personal support has been immeasurable. However, by far the most significant support I have received is from Dante De Gori CFP®. His commitment to our profession is unwavering.”

Marisa also attributes her work as a practitioner and principal of Wealthadvice, as well as serving on the FPA Board prior to becoming Chair, with providing her with a much deeper understanding of the issues affecting the profession.

“When you look at the sheer amount of work the FPA has done this year, I feel we have achieved so much. With our member focus, we have rolled out an enormous range of tools and resources to support them with the challenges we are facing, plus we have a new Government, so we have undertaken a great deal of lobbying,” she says.

“In terms of the final report from the Royal Commission, I don’t think anything came out that was unexpected if you had listened to the hearings. This means that our priority has been about ensuring that the implementation of the Royal Commission’s recommendations are done to a timeframe that is sensible, and the unintended consequences are identified and addressed, further supporting our quest to rebuild trust in the financial planning profession.”

Marisa is confident that through the FPA’s “quiet advocacy” with Government, a sensible outcome can be reached with implementing the Royal Commission’s findings.

Difficult challenges

But ask Marisa about some of the more difficult challenges she faced this year, and top of her list is the hardship faced by practitioners at the coalface. She admits it was a sobering experience speaking to financial planners at 21 of the 33 FPA National Roadshows she attended, in addition to her appearance at many Chapter events.

“On becoming Chair, I made a commitment to members that I would be accessible. So, the hardest issue for me was to hear just how difficult things were for them.”

 The strain of FASEA, the Royal Commission and changing remuneration models for some practitioners, prompted FPA director, Michelle Tate-Lovery CFP®, to suggest the launch of FPA Wellbeing – a free and confidential service available to all practitioner members to help them with their mental health and wellbeing during this time of transformation for the profession.

 “Launching FPA Wellbeing was something that deeply upset me, as I didn’t realise things were as hard as they were for our members. So, I’m glad we were able to launch a service that could support them.”

Obstacles ahead

Not withstanding these challenges, in addition to the new FASEA standards and exam, Marisa is keenly aware that there are a number of other issues keeping members awake at night.

“It seems to me from a members’ perspective that the compliance pendulum from licensees has swung too far. Many of our members are having trouble getting their licensees to sign-off on advice in an appropriate time period, meaning that planners cannot get SOAs out to their clients in a timely manner.”

And then there’s the uncertainty created with licensees leaving the advice space altogether.

“A number of our members have the added worry of not actually knowing what their home will look like, given that many licensees are leaving the advice space or cutting their numbers of planners.”

Add to this the phasing out of grandfathered commissions in just over 12 months’ time, and planners still have a number of obstacles to deal with.

“We know that grandfathered commissions account for, on average, 8 per cent of revenue for our members, based on last year’s FPA member survey. And while this is a declining revenue stream, for other planners, it’s still a much higher percentage of revenue. This in turn led us to focus on the other key source of revenue for many of our members – life insurance commissions. This is why it was essential to establish a working group with the AFA, so we can prepare for the 2021 LIF Review.”

And while these issues also keep Marisa awake at night, as a practitioner, she knows she is also walking the same path that other FPA practitioners are walking. “That’s why the FPA Board and the FPA team keep working to try and find the right solutions for our members,” she says.

Proud achievements

 But challenges aside, Marisa says a definite highlight for her over the past 12 months has been actively engaging with the membership, many of whom she has never met before. And while she admits it hasn’t always been complimentary when talking to members or receiving emails, Marisa has developed a thick skin this year, which she says “is okay”.

“The FPA needs to be a sounding board, where members feel comfortable voicing their concerns and telling us when we need to ‘up the ante’.”

Nonetheless, the FPA has notched up some impressive achievements this year, including rolling out a range of tools are resources that have been designed to help members adapt to the changing advice landscape. These include the online education and study hub, FPA Return to Learn, FPA Wellbeing, the FASEA Code of Ethics toolkit, the Match My Planner tool, fintech evaluation tools and guides, as well as the National Roadshow.

Other achievements include the extension of the FASEA education and exam deadlines, where the Government will restore the full two-year period for planners to pass the FASEA exam by extending the deadline for 12 months to 1 January 2022, while also extending the deadline for meeting the FASEA education standard by 24 months to 1 January 2026. However, Marisa acknowledges these extensions still need to be legislated, which is unlikely to happen this calendar year.

Another recent success was the announcement by FASEA to extend its recognition of CFP® course work prior to 2003. This means that planners who commenced the CFP® 1-4 program course work to attain the CFP® designation after 1 July 1999 and before 31 December 2003, are eligible to be awarded two credits recognition for prior learning in an approved Graduate Diploma.

So, considering these ‘wins’, how does Marisa score her first year on the job?

“I’d say it has been a success, not that I can take the credit for the incredible work undertaken by Dante and his team. However, I think a clearly demonstratable measure of success must be all the tools and resources we have developed and rolled out to members this year.”

Five-year plan

As the profession heads into a new decade, Marisa sees more opportunities, rather than challenges, ahead for financial planners. And while she believes there are still hurdles to overcome, she is optimistic about the future.

“Without exaggerating, there are so many opportunities for the profession,” she says. “Even recent ASIC research (Report 627) has uncovered a massive increase in demand for advice at a time when there may be fewer planners to meet that demand.”

Marisa is referring to ASIC report, Financial advice: What consumers really think, which reveals that 41 per cent of Australians intend to get financial advice in the future.

She is also buoyed by the legislative and professional work done to position financial planning as a true profession. “Now that we have the terms ‘financial planner/adviser’ enshrined in legislation, as well as education standards and code of ethics, we have the cornerstones in place of being a true profession.”

Marisa firmly believes these professional changes alone are an opportunity to rebuild trust and engagement with consumers.

And what of the FPA’s strategic direction for the next five years?

Marisa confirms that the FPA Board and management team is in the process of developing both a new five-year strategy and a policy plan, which will be taken to the 2019 Congress for member feedback, before being rolled out to members at next year’s National Roadshow.

We’re in the process of developing the new strategy and I’m excited by it, as it will endure beyond my term on the Board. I hope, in some ways, this strategy will be a lasting legacy as part of my giving back to the profession that I’m so proud to be part of.”