It gets cold in the Blue Mountains. The iPhone app said it was 0.5 degrees at Katoomba. Not very many people (OK, none) ventured into the outdoor pool (the water was eight degrees). Coffee was served indoors. The only people outside were those who desperately needed a phone signal.
Maybe it was the cold mountain air that led to clarity of thinking. More likely it was the calibre of those gathered. But the inaugural Professional Planner Dealer Group Summit painted a very clear picture – as clear as the view down the Jamison Valley – of the future for dealer groups and licensees in a fast-changing financial planning environment.
The Summit was specifically designed to give the heads of leading dealer groups and licensees an opportunity to come together to discuss the key issues that will face their businesses in coming months and years. There were representatives from institutionally-owned groups, publicly-listed groups, and from privately-owned groups, both large and small. It was a chance to put aside the natural competition between these organisations, and contemplate the future as a collective.
I came away from the event more optimistic than beforehand about how the financial planning industry will cope with what’s coming at it. It was a great circuit-breaker; a chance to step back from the day-to-day and focus on the longer term. For me, that was the most valuable aspect of the Summit – not what the Future of Financial Advice (FoFA) proposals might mean this year or next, but what financial planning could look like, and what it could be doing, five or 10 years, or longer, from now.
To say that there were some great minds in the room would be not only grossly patronising, but also an understatement. To say there are some truly imaginative responses on the drawing boards, based on some very smart insights and some very sound strategies, would likewise be an understatement.
Of course there are. We need to remember every now and then that the Australian financial planning industry leads the world, in many respects. It leads the world because it has been, for the most part, reasonably well regulated. And for the most part, highly competent and ethical practitioners are found at its core. That is not to ignore its shortcomings, of which there are a few, nor to downplay the damage that occurs when the trust between a planner and a client is betrayed. Let’s not kid ourselves that all is rosy and nothing needs fixing.
But let’s not beat ourselves up too much, either. There’s a saying – in fact, I may have had it on a T-shirt when I was a teenager, thinking it made me look very cool and worldly – that goes: “When you’re up to your arse in alligators, it’s difficult to remember that you only came here to drain the swamp.”
Right now, as the FoFA wends its way towards legislation, it’s easy to feel like the water is waist-deep (and rising). It’s difficult not to be preoccupied with the alligators. It’s natural to lose sight, occasionally, of the job of draining the swamp.
You can read a wrap-up of the Summit from page 34. We’ve been urged to run a similar event again, soon. We’re working on the timing of that – so stay tuned.
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A couple of days after getting back from the Summit, Professional Planner and its sister publication, Investment Magazine, held a roundtable featuring the Shadow Treasurer, Joe Hockey, and Shadow Assistant Treasurer and Shadow Minister for Financial Services and Superannuation, Mathias Cormann.
We gathered more than a dozen representatives from the financial planning, funds management and superannuation industries, and spent almost two hours testing the Opposition’s view on financial planning and FoFA, on Australia’s position as a potential financial services centre, on national savings (including MySuper), and on a number of other things. Coverage of the roundtable starts on page 14.
From the perspective of Professional Planner readers, the good news is that the Opposition has definite views on what it can and cannot support in FoFA. For example, it cannot support opt in, and it cannot support banning some insurance commissions and not others (and generally cannot support banning insurance commissions at all).
But many of the FoFA proposals have the Opposition’s support, including the statutory best interest test – in fact, any measure that improves the transparency of arrangements between planners and clients (including product structures).
We’ve heard from both sides of politics now. Late last year we hosted a roundtable featuring the Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, and before that a roundtable featuring Shorten’s predecessor, Chris Bowen.
The notable thing to emerge from the most recent gathering is just how much common ground and agreement there is between the major parties on how financial planning should be regulated and how it should operate. How the disagreements are ironed out will be crucial, of course; and with a minority Government and an adversarial parliamentary system, it will probably get ugly.
But the idealist in me would like to believe that what can emerge from the process is a sensible package of reforms that achieve the Government’s aims, but in a way that does not unnecessarily burden those involved in the industry.
If that’s the case, and given the imagination, creativity and drive displayed earlier at the Summit, we’ve got a really good chance of draining this swamp.
