If this issue is any indication, ‘disconnect’ is running amok in the financial planning world. Once I’ve progressed past my growing irritation with the word itself – it seems to be joining the annals of the horribly overused expressions du jour – it does accurately reflect some of the recurring issues within the advising industry.
Consider regulation. In “The Big Issue” Peter Switzer illustrates one of the downfalls of what he calls excessive regulation. He says customers aren’t getting the advice they need due to legislation; the very same legislation that was designed to protect the customer.
Alan Kohler finds the major political parties completely disconnected to what he sees as serious conflicts within financial planning, as discussed in his column “The Politics of Indecision”. On a more practical note, Rod Bertino is somewhat astonished to report that although his firm can strongly link structured client reviews to a whopping 146 percent increase in profit, an overwhelming number of advisory practices have not put such a system into place. ‘Disconnect’ indeed.
And although ethical and sustainable responsible investing appear to be on or near the top of many investors’ wish lists, only 28 Australian advisers have bothered to obtain readily available training and documentation – via an ethical investment certification – to better position themselves to provide this service to their clients, as discussed on the Education page.
Fortunately, methods to counteract the rampant disconnection are also at hand.
Mike Goodall, formerly of ANZ and now managing director of Inpro, suggests an effective way of broadening and solidifying client relationships – with the upside of increases in practice profit – by increasing those all-important connections, in “The Secret Life of Networkers”.
Michael Le Roy, the subject of this issue’s Client Case Study, exemplifies the positive outcome of a closer connection with his planner, Adam Moir. By putting the priorities and needs of Le Roy first, Moir seems to have helped improve Le Roy’s financial circumstances and outlook substantially along with his opinion on the importance and value of good advice.
But you need look no further than the News page, and the story of 11 independently-owned financial planning firms deciding to merge, for evidence that connection matters. A niggling question that remains to be answered about the latest planning conglomeration, however, is what will be the impact of all this amalgamation on the clients of these firms – more or less disconnect? It will be an interesting story to follow.