Welcome to our new website, designed to complement the print edition of the magazine by extending Professional Planner’s range of services and scope of information. Each month you’ll find some, but not all, of the current edition online. We’ll regularly publish our Client Case Study and Planner Profile each month, as well as the Consumer Insight column. As each new edition comes out, the previous edition will be archived in full, so you can find the full text of all past articles and columns. Professional Planner’s writers will produce regular blogs, to provide commentary on and analysis of events between editions. We’ll also invite guest bloggers onto the site from time to time, so you can benefit from their knowledge and expertise on issues as they arise.
The website features a research library, where you can find industry-leading research and “thought leadership” papers. In most cases the papers are available for direct download; in others we will provide a link to the authors’ own websites. I invite any organisation that produces a paper it wants to put before the financial planning community to submit it to Professional Planner for consideration for inclusion in the library. We’re particularly excited about a joint venture that we’ve entered into with Strategic Consulting and Training (SCAT). Jim Stackpool, SCAT’s managing director, will already be well known to many readers, and SCAT consultant Martin Mulcare is a regular contributor to Professional Planner. The joint venture is designed to give Professional Planner readers an opportunity to gauge the performance of their planning practice.
It gives, free of charge for a period of three months, access to SCAT’s industry-standard practice management tool, Dashboard Scenario Planner. The scenario planner is designed to help you quickly and effectively pinpoint which areas of your business are performing well and which are performing below industry standard. Dashboard measures four key areas of your business: sales, structure, clients and profitability. These measures are then combined to produce a Dashboard Score and Value to allow you to see the difference that various scenario changes can make to your business.
The joint venture is designed to be an entree to a wider range of services, and is the first of a series of practice management and profit optimisation tools that Professional Planner is working to make available to readers in future. An events calendar also exists, where you can keep up-to-date with upcoming seminars, conferences, presentations, and so on. I invite all planning firms, dealer groups, consultants and service providers to send us details of upcoming events to be included on the calendar. One distinctive characteristic of the Professional Planner readership is your level of commitment to and engagement with the industry’s key issues and your willingness to provide insight, opinion and feedback on these issues.
The website is designed to support this engagement, providing a series of avenues for you to contact the publication directly, to comment on what you’ve read, and to interact with your peers, via a series of forums. I invite to you have a look at the website, register, give it a test drive, and explore some of its features and services. But above all, let us know what you think – what you like, what you don’t like, what works, what doesn’t work, and anything else you’d like to see.
On the face of it, Ian Silk and Brian Bissaker might be viewed as mortal enemies. But as politicians like to say, the things that unite them are greater than the things that divide them. Silk, chief executive of the industry superannuation fund Australian Super, and Bissaker, chief executive of the Commonwealth Bank-owned Colonial First State (CFS), do view some parts of the financial services landscape through very different prisms. But on at least one issue they appear to agree: the value of financial planners. Bissaker and Silk revealed their hitherto unexpectedly similar views at the Investment and Financial Services Association (IFSA) conference on the Gold Coast in early August. Bissaker reckons financial planners have saved CFS a vast amount of time, energy and angst by acting as the front-line troops in the battle to explain to investors what’s happened to their funds in the 2007-08 financial year (and what continues to happen so far this financial year).
He says the volume of calls received by CFS’s call centre spiked by about 20 per cent during July, as members received their end-of-financial-year statements. But a 20 per cent spike is pretty normal in July, he says, so the extra volume driven by investor disquiet over the 2007- 08 financial year has been minimal. Planners have done a brilliant job of telling Bissaker’s customers exactly what to expect from their investments, and of explaining to them what has happened. As a result, investors are far less likely to pester Bissaker’s staff directly. Of course, the vast majority of funds managed by CFS are advised funds; the reverse is true for Australian Super, and Silk is bracing himself for an onslaught.
The one place you do not want to be in coming months, he says, is in a super fund’s call centre – especially an industry fund’s call centre. It’s a problem that Silk appears resigned to facing whenever there’s a significant market downturn, and one he probably wishes he could solve quickly. Silk does not believe more disclosure is the answer – disclosure to date has been, he says, ineffective, and in any case, a large proportion of industry fund members (in fact, of the general population) are inadequately equipped to understand financial matters at a high enough level.
He acknowledges that, issues around commission aside, financial planners will never treat industry funds as a serious alternative unless industry funds can significantly raise their game on service and administration. (It would also help if industry fund call centres didn’t apparently automatically treat financial planners as the enemy – but that’s another story.) And so industry funds will not be able to count on financial planners as allies in the war on “investor ignorance”. Which is a problem for industry fund members, who look like being cut off from high-quality financial advice for a while longer yet.
This edition of Professional Planner marks a milestone of sorts – it contains Alan Kohler’s final column for this magazine. Alan has been an invaluable contributor over the past year or so, and was instrumental in helping Professional Planner attract attention and gain respectability in its early editions. His column this month is both reassuring and depressing, and I urge you to read it (it’s on page 7). It’s reassuring, in that the arguments he puts forward – and has consistently put forward – remain valid. Alan argues that commission payments have the potential to distort the provision of financial advice (in fact, he argues more than that – commissions DO distort the provision of advice); disclosure of commissions has failed to remove that distortion; and in the long run, fee for service is the only intellectually honest and ethical way forward for the industry.
But it’s depressing because he clearly has come to the conclusion that he’s been banging his head against a brick wall. The entrenched vested interests in the financial services industry are so strong that it’s going to take more than words on a page to shift them. It’s going to take a concerted effort by a growing number of planners themselves. They must raise their voices and speak out against the inequities, distortions and biases that they see in traditional remuneration methods. They must advance arguments against traditional remunerations structures, and in support of moves towards true professionalism.
While Professional Planner acknowledges that remuneration is but one aspect of what constitutes a profession, true professionalism will never be achieved unless and until this very significant hurdle is cleared. We thank Alan for his commitment to the cause, and for helping Professional Planner find its voice. We wish him well with his other interests.
