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22 February 2023

Money & Life team

Money & Life contributors draw on their diverse range of experience to present you with insights and guidance that will help you manage your financial wellbeing, achieve your lifestyle goals and plan for your financial future.

As the FPA celebrates 30 years, we talk to some of our longest serving members about their perspectives of the profession – both past and future.

What are the biggest challenges that you and the profession have faced over the past years?

“The biggest challenge for the profession as a whole is to earn – and retain – the trust of the Australian community. The Royal Commission exposed this in graphic detail when it unearthed a plethora of legislative breaches that were systemically prevalent across much of financial planning in Australia. Sales cultures overrode clients’ interests, even after FoFA 2012 and the Best Interests Duty commencement. Twenty-three years ago, when I wrote my speech as the incoming FPA Chair, I embedded it with a theme of trust; that the biggest asset any of us have is the trust the community has – or not – in the industry that was striving to be recognised as a profession. Without the community’s trust, collectively, we’ve got nothing.

In a post-Royal Commission environment, where breaches of trust and legislative requirements cast a very long shadow over Australian financial planning, in the minds of the community at large, we’ve still got a long way to go.”

With so many financial planners leaving the profession, why did you choose to stay on in the profession?

“Having sold my business in 2009 after 20 years, and after an opportunity arose to buy it back with my business partner, Justin Baiocchi, in 2012, I chose to stay because, in part, of the pride I hold for the work we have done for our clients over 33 years. While I no longer practice, I enjoy seeing our business grow steadily over time, while still maintaining very high levels of services for our clients. I love what we do and take great pride that we have improved the lives of many people over more than three decades. That we still have clients with us who engaged us in early 1990 is deeply gratifying.

During 1990, we were one of the first financial planning businesses in Australia to move to a fee for service model – it just made perfect sense to me that, in time, it would mean the focus became one of looking after our existing clients as a priority, not the never-ending search for new clients.”

As we head into 2023, what are you looking forward to both individually and for the profession?

“I’m looking forward to continuing to assist the University of New England with its degree programs and continuing my PhD with Griffith University, where I’m seeking to understand the efficacy of financial planning legislative reforms since the late 1980s. For financial planning, I’m going to enjoy watching the new generation of planners – the graduates – become an increasingly large cohort of the ‘trust builders’ in the profession. And while we’re all in this together, the new generation is well educated, not focused on product sales, and are here for all the right reasons. I have great confidence in them taking the ‘reins’.”

What are your best tips for being a successful financial planner?

“My top five tips are:

A. Take the time to set your clients’ expectations very carefully – none of us can perform financial ‘miracles’. Much of what we do is subject to the vagaries of economies here and around the world, and the resultant investment market reactions. If financial planners do well in terms of early investment returns, it won’t be because the planner is a ‘guru’ – it will be because all the variables of economies, markets and legislation were blowing a tailwind. The reverse is also true – if the early returns disappoint, it won’t necessarily reflect bad advice.

B. Communicate regularly with This includes at least annual meetings (preferably six-monthly meetings), and quarterly newsletters that help to set the client’s expectations about what might be coming down the pipeline of returns. Don’t let your clients get surprises. Take the time to understand how your clients’ investment environment might be changing in the medium-term outlook and communicate your view to them.

C. Say what you will do and not do, and do what you Also ensure your administration system is geared to delivering the services you promise to clients.

D. Ensure your every written and spoken word is aimed at building and maintaining the trust in you of clients and potential

E. Finally, take your Building a business that survives takes time and dedication over many years. It’s not a race. If we (Australian financial planners and licensees) focus on earning and retaining the trust of clients, the community will eventually trust the financial planning profession. Experienced planners know that the best way to grow a business is when clients recommend family and friends; they recommend the planner because they trust them.”

What are the biggest challenges that you and the profession have faced over the past years?

“The biggest challenge for the financial planning industry over the past few years has been the varying standards in the larger dealer groups, together with the badly written Ethics exam, leading to almost

half of all financial planners being forced out of the industry. The impending degree requirement from 2026 has also seen many senior planners leaving the industry early.

I am a planner with over 30 years’ experience without a degree and have helped with the drafting of the changes to the Quality of Advice Review and education requirements. I believe senior planners, like myself, could continue to operate with virtually no end date.”

With so many financial planners leaving the profession, why did you choose to stay on in the profession?

“I love the role of a financial planner, as I specialise in aged care and Centrelink, and I receive a great deal of satisfaction helping people to navigate the complexities of this type of advice. This leads to an advice role, rather than selling products. You can choose your work hours, and it is financially rewarding.

I enjoy giving back to this industry that has helped me over many years, so I am on the Conduct Review Commission for the FPA, and a member of the FASIC committee for FINSIA. These bodies are an important part of our industry, and if we are to be perceived as a profession, we need to be active members.”

As we head into 2023, what are you looking forward to both individually and for the profession?

“After negotiating the transfer from a large dealer group to a wonderful boutique dealer group (I’m now with Finchley & Kent), I believe the future will be in the small dealer groups with under 100 financial planners. The superior support given, and the technology offered, enables efficiency and productivity. We are made to feel important and valued, and in turn, can provide a higher level of service to our clients.

I believe 2023 and beyond holds will be an exciting time for financial planning, with demand outstripping supply. However, we need to find a way to encourage more students to follow a career path to financial planning, which does not always make a degree mandatory.

This is an industry with no age limit, and clients in the aged care space like dealing with a financial planner who understands what it’s like to put a loved one into care.

Compliance needs to be automated as much as possible, so that more face-to-face client time is available. Statements of advice need to be streamlined, so that they are more client-focused and easy to understand.”

What are your best tips for being a successful financial planner?

“My tips to being a successful financial planner are many, but the three top tips are:

  • Find a good boutique dealer group;
  • Ask existing clients and centres of influence for referrals, and say thank you when they are given; and
  • Specialise in something you enjoy and let everyone know your speciality; listen to your clients; and be prepared to ‘hold their hand’ throughout their lives – during both the good and difficult times.”

What are the biggest challenges that you and the profession have faced over the past years?

“The biggest collective challenge has been the enormous additional time we have had to spend in dealing with the tsunami of new legislative requirements and compliance obligations, which were introduced as part of the Government’s response to the 76 recommendations for change arising from the Hayne Royal Commission.

The ironic part of this was that almost all of these recommendations were made to fix the problems and malfeasant actions by the ‘Big End of Town’ – which subsequently couldn’t get out of the business of providing advice to retail clients quickly enough. The small, non-aligned AFSLs barely rated a mention during the Commission’s inquiry, yet we are the ones forced to bear the consequences, costs and penalties. Talk about closing the gate after the horse has bolted!

As a financial planner who has been providing advice to some of our clients for over 30 years, the new requirement for our clients to sign a new advice and fee agreement every year was baffling to many of our clients, and an expensive waste of our firm’s time. When will we be trusted as a true and honest professional and not treated as a suspected criminal?”

With so many financial planners leaving the profession, why did you choose to stay on in the profession?

“That’s easy; I love the business, I get huge personal satisfaction from helping my clients, and I wouldn’t know what to do with myself if I retired! I enjoy the challenges thrown up every day – and my work gives my life a purpose. Plus, I pride myself on being a survivor. I am absolutely determined that my business and I will survive and thrive, if for no other reason than to spite those who seem to be doing their best to drive me out of business. (Does that sound like a siege mentality?)”

As we head into 2023, what are youlooking forward to both individually and for the profession?

“Given the almost halving in the numbers of licensed financial planners from 2019 until now (from almost 29,000, down to less than 16,000), it is plainly obvious that both sides of politics have completely stuffed up the task of managing an orderly transition of financial planning from an emerging profession, to a true profession. None of the many pieces of legislation that were heaped upon us, has been subjected to an impact assessment. Both sides of politics should absolutely hang their heads in shame at the disastrous results they have both presided over.

Both personally and from a professional viewpoint, I am greatly looking forward to Michelle Levy’s Quality of Advice Review recommendations, on December 16, as well as the final report of the Australian Law Reform Commission by the Honourable Justice Sarah Derrington, to be released in November next year.

Therein lies our great hope for the future of our profession! We live in hope that the recommendations will lift the yoke of unnecessary and costly compliance obligations attached to the provision of retail advice (via the QAR recommendations) and simplify the labyrinth of laws that govern our activities through Chapter 7 of the Corporations Act (via the ALRC recommendations).”

What are your best tips for being a successful financial planner?

“Always maintain an optimistic outlook on life and have faith in the future. Your clients will thank you for that. And remember the old Latin adage ‘illegitimi non carborundum’ (Don’t let the b**tards grind you down!).”

What are the biggest challenges that you and the profession have faced over the past years?

“Challenges for the advice profession have been the continued implementation of regulation that has taken the focus off the client and put it more on compliance. Unfortunately, this has been driven by poor advice scandals of the past and the outcomes of the Royal Commission.

The Government’s reaction has been to introduce more regulation to increase consumer protections. However, this has created frustration and more paperwork, which has done nothing but confuse consumers, rather than engage them. Personally, the cost of running an advice business has just been increasing over the years, which means we are unable to service all clients who we may want to.”

With so many financial planners leaving the profession, why did you choose to stay on in the profession?

“I have been in the advice profession for the past 35 years. I originally got into advice, as it was a career that allows me to help people, solve their problems, and put them into a great position financially to meet their goals and dreams. My enthusiasm around this has not changed.

Despite all the challenges, I still want to give advice that changes peoples lives and I have been prepared to step up and do what is necessary to stay around. This means I have finished my education and I am positioning my business for its next growth phase. I really believe the future of advice is very bright.”

As we head into 2023, what are you looking forward to both individually and for the profession?

“I have worked for a long time in the advice industry to help move us to a profession. As hard as Professional Standards legislation has been, we are now close enough to being recognised as a profession – the same as accountants and lawyers are. I feel this will open up many opportunities for the future of advice.

I believe more Australians will feel comfortable in seeking advice, as their perception of advice changes, from what they considered was product selling to the actual provision of good advice that is in their best interests. They will know that their financial planner is educated, and needs to adhere to a Code of Ethics and professional standards.

The Quality Advice Review could have the ability of relaxing some of the regulatory burden, which opens up the possibility for planners in being able to provide more advice to Australians, while giving us more time to service our clients”

What are your best tips for being a successful financial planner?

“Throughout my career, I have always tried to stay ahead of the wave of change by ensuring that our business continues to examine how we give advice, how we service our clients, and how we can constantly improve what we do for them.

We have not been afraid of surveying our clients. Even when we have volatile markets, and where you may get negative feedback, this feedback helps you consider whether you are meeting your clients’ needs when servicing them. This helps to ensure you stay relevant – both as a busiess and a practitioner – for the future.

Be good at listening to your clients, understand who they are and what they want out of their lives, be prepared to ask the challenging questions, be prepared to give them answers that they don’t want to hear, and be prepared to ‘hand hold’ them through their lives – during both good times and difficult times.

On a final note, change is always going to happen in financial advice, so you need to adapt and embrace it, rather than fight against it.”

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