“So I did that, I did my diploma; and then I did whatever was required to do to get CFP in those days. In 2000 I started my Master’s and finished that in 2003. We’ve had a degree-based policy here for 10 years – so I figured that if I expected my colleagues to be appropriately qualified, I should be myself.
“I’m now doing a Graduate Diploma in tax.
“We don’t let a planner see a client, as a planner, until they have an appropriate degree plus the CFP standard. They’re not a planner until they get to that stage. We have a three- to five-year mentoring program. They work here under the other planners, and work closely with them while they’re learning.”
Since so much of the proposed changes are not only inevitable but predictable, Hewison’s business has been shaped to accommodate, ahead of time, these forces of change.
What to make, then, of the resistance to change in some quarters? Some planners continue to argue for the status quo, claiming, for example, that provided commissions are disclosed, then they’re OK – and in any case, clients are happy to pay them.
Hewison disagrees.
“I think it’s a convenient argument. The clients aren’t happy about it,” he says.
“You can survey existing clients all day long and they’ll all say yes, that’s fine. But the majority of people do not agree with commissions being paid by product manufacturers, and I think there’s a lack of understanding by consumers.
“I believe that if we’re going to call ourselves professional advisers, and be seen as professional advisers, then we need to stand up and have our clients appreciate the value of what we’re providing, and pay us for it.”
Hewison, for his part, charges an asset-based fee – a style of fee that is itself the subject of some debate within the industry – for the ongoing service his firm provides to clients.
“It’s fully stated, it’s deducted out of the client’s account, they understand what they’re paying, they understand what they’re paying for, and they understand they’re paying us,” he says.
“The financial planner needs to be on the job every day, all the time, continuously. So if there are changes in a client’s circumstances, changes in legislation, jobs that need to be done on their accounts, the planner needs to have the ability to do that.
“An ongoing fee – whether it’s a percentage of assets or a flat fee, it doesn’t matter what it is. It’s when the planner is paid by a product provider that it just doesn’t hold up.”
Hewison says ongoing fees help to cement the relationship between planner and client, and that clients know only too well they can walk away if the planner underperforms.
“We have a very close relationship and we’re accountable – we don’t carry all of the responsi- bility; we make sure our clients understand it’s a partnership – but we’re accountable to them,” Hewison says.
“And if we don’t perform, they’ll sack us.”
Which brings the conversation to the issue of the opt-in proposal. Hewison is not a fan, but is resigned to the idea that it might come into force anyway.
“It’s a nonsense from our point of view,” he says.
“We have a contract with the client, an advisory agreement that they sign. They understand what that’s all about. They understand they can terminate us any time they like and they understand the payments they’re making to us, because it’s coming out of their bank account. If they’ve got an issue they can change the arrangement and go somewhere else.
“It’d be inconvenient to us and to the client, but if we had to have a contract renewal every year, then we’d do it. We don’t want to do it, but we’d do it.”
The proposed introduction of a fiduciary duty for planners also “makes no difference to us at all”, Hewison says.
What it means is that “everything you do has to have the client’s interests first”, he says.
“There cannot be any conflict,” he says.
“Where we have conflict, we declare it. We’ve had this debate about conflict. We’ve always been of the view that we do not have conflicts.
