Financial planners with technical competence and sound knowledge can’t always translate that know-how into the best interests of their clients – and sessions at the 2016 Self-Managed Super Fund Association (SMSFA) conference next month aim to address that shortcoming.
“It’s a conversation with trustees – so it’s not technical at all, and it’s really about boiling it down to basics,” says Liz Ward, SMSFA’s head of education services.
“We’ve got three highish-profile trustees on a panel and as I’ve been talking to them, each of them has said in their own way that they assume the professionals they talk to know their stuff, that it’s a given.
The trustees told Ward that what they want is for their advisers to be able to communicate with them and talk to them as a person.
“It was refreshing to hear that from these three trustees, who are all saying they just assume [technical proficiency is] in place, but what they really want is for [the adviser] to understand them – taking technical knowledge, and applying it to them.
“It all sits very well with the ‘year of professionalism’ … and understanding the trustee, knowing what makes them tick, and that technical knowledge should be part and parcel of what you do.”
Graeme Colley, SMSFA’s director of technical and professional standards, says a recent conference run for SMSF trustees revealed that their greatest concerns revolved around “relationships with their accountant and financial planner, and getting on with them”.
Down to the individual
Colley says some accountants and financial planners are good at cultivating relationships and translating technical expertise into the client’s true best interests.
He says convergence of accounting and financial planning over coming years is likely to be driven by looming regulatory changes that will require accountants to be licensed (or to become authorised representatives of a licensee) to continue to give advice on SMSFs.
“That will require greater communication with clients,” he says. “Those sorts of personal skills will become essential, or they may miss out on business.”
Ward says that even though accountants have “historically been more transaction-orientated, I know that my accountant is very personable”.
“I think it comes down to the individual, as to what sort of person they are,” she says. “But with FoFA and best interests duty, the overwhelming noise is that it is very much about the client, and you have to bring everything back to the client.”
Ward says the session will give delegates an insight into the aspects of an advice relationship that three different trustees say they value most.
Trustees’ experiences
“One of them is a young guy who said, ‘To be honest I’ve never thought about getting advice – I just spoke to a mate at the pub who said getting an SMSF might be good and I think I’m pretty intelligent and I just went off and did it by myself – and it’s a really interesting concept that I might have to think about going and talking to someone’. So that was interesting,” Ward says.
“Another person said, ‘I thought I should get one so I went to a mortgage broker’. She said the advice her mother gave her is that they’re not making more land, so she’s used that throughout her life and property has been her most prominent investment. When she thought ‘SMSF’, she thought ‘property’; and when she thought ‘property’, she thought ‘mortgage broker’.”
Ward says the third trustee has a background in the financial services industry and is well versed in superannuation issues.
She says that hearing from three trustees briefed to be “very candid” about their SMSF experiences will give delegates “a message to the people in front of them to take home”.
“Even though all of [the delegates] have got clients, it’s for them to sit back and reflect and ponder why they’re actually here in the room,” Ward says.
“And why they’re here in the room is that it’s all about the trustee.”
