This is the final edition of Professional Planner for 2009. It marks both the end of a tumultuous 12 months and – near enough – this magazine’s second birthday. I doubt that there could have been a worse time to launch a new publication than October, 2007. We didn’t know then, but we know now, that the S&P/ASX 200 Index would peak on November 1, 2007. A year later, the index had fallen by about 50 per cent, and it felt as though the world might actually end.
At the end of a year it’s customary to look back on the events of the 12 months just past and take stock. While now we know that it only felt like the world would end, that sensation, stemming rom chaos on global financial markets, wasn’t helped one bit by three Government inquiries, two landmark industry position papers on remuneration, product failures, you name it – who can blame Emmanuel Cassimatis for forgetting what happened?
Of course, it’s easy to focus on the negative (or unusual or unexpected), because those events are, by definition, news. But looking back over the past year, we’ve covered a range of topics and issues, all designed to be constructive and supportive of financial planners in their businesses. Our December ’08 – January ’09 cover story was The Financial Planner’s 2009 Survival Guide – which made a key point that financial planners would have n important job in making sure clients stuck to long-term investment plans. The market recovery started in March. In February we turned the spotlight on managed fund research houses, and asked if their ability to analyse and assess managed funds was up to scratch – and whether financial planners ought to be entitled to rely on them when making product recommendations.
In March we focused on Storm Financial, and the lessons the industry could learn, so as to emerge stronger and better trusted by the general public. In April-May we looked at moves by the Big Four banks to improve the quality and calibre of their financial planning arms – not all readers believed the banks were doing a good job, nor even doing in practice what they claimed to be doing in theory. The June – July edition featured a roundtable discussion which included, along with a strong lineup industry leaders, Bernie Ripoll, chair of the Parliamentary Joint Committee on Corporations and Financial Services Inquiry into Financial Products and Services in Australia. Ripoll revealed himself as a savvy operator, quickly getting up to speed with the issues, and gave us a fascinating insight into how the inquiry works and the issues it was keen to get to the bottom of.
Quality of advice was the main topic in the August – September edition; specifically, how to define it, and how to deliver it. And the October – November edition examined the ramifications of industry reviews and heir impact on people working in the industry. In every edition we’ve highlighted the positive effect that good advice has had for clients. We’ve examined new and innovative business structures. We’ve profiled individual planners and canvassed their views on the key issues affecting their businesses and clients.
And we’ve brought you some of the best thinking in the industry on practice management, professionalism, investment issues and trends, self-managed super, private banking and technical issues – among others. It’s nice to be able to end the year on a relatively upbeat note. On October 30, almost 200 people packed The Establishment in Sydney to learn who’d been named the Standard & Poor’s 2009 Fund Manager of the Year. The results of the awards can be found in this edition of Professional Planner, starting on page 14. One of the striking characteristics of the event was how refreshing it was to be actually celebrating excellence; to be rewarding organisations for a job assessed as having been well done.
In other positive news, a report commissioned recently by the Investment and Financial Services Association (IFSA) and conducted by KPMG found that on average, people who are clients of a financial planner save (or invest) about $2500 a year more than people who are not clients. It found that clients of planners have accumulated, on average, more than $8000 more in investments than people who do not have an adviser. This kind of analysis is exactly what has been missing from the debate on the role of financial planners so far: the actual, practical benefit to the nation as a whole from fostering a vibrant, efficient and trusted planning industry – or profession.
The IFSA/KPMG analysis goes further than the “Value of Advice” analysis that the FPA does – although that analysis, as far as it goes, is very good. The IFSA/KPMG analysis assesses the impact that planners have on the economy more broadly. It estimates that if a mere 5 per cent more of the adult population sought the services of a financial planner, it would boost national savings by 0.5 per cent. Now, I do not mean to suggest by these two fairly recent events that all is rosy in the financial planning garden, because it’s not.
There are still changes and improvements that can, and on present indications will, be made. But let’s try to keep a sense of perspective. Just like the global financial crisis (GFC) felt like the end of the world, some f the upheaval the industry is facing tends to feel the same way. But eventually, we’ll look back and wonder what the fuss was all about. I’d say the fundamental things are in place, and working well.