It was 2002 when Ray Griffin attended a meeting of the International CFP Council in Auckland, New Zealand, in the midst of protracted efforts to create an independent global standards-setting body for financial planning.
Griffin had realised years earlier that financial planning could not flourish unless it operated to a higher set of standards, but knew that simply adopting the US CFP Board’s Certified Financial Planner (CFP) designation would not work equally well in all jurisdictions.
He understood that there must be a body responsible for adapting the CFP mark, and standardising its use globally, outside the US. But efforts to create autonomy for the international council were consistently stymied by a US body reluctant to cede control.
Frustrated with being blocked at every turn, Griffin accosted one of the council’s US members in Auckland. If the CFP Board wouldn’t grant the council independence to set CFP standards outside the US, he said, there were “23 other letters in the alphabet” the council could use to create a new global body.
His words cut through. The board relented, paving the way for the creation of the Financial Planning Standards Board (FPSB).
The International CFP Board morphed into the FPSB Council, an organisation that provides input and submissions to FPSB policy decisions. It represents every country in the world where the CFP mark is licensed, including Australia, where the mark is administered by the Financial Planning Association (FPA).
The official history of the FPSB describes Griffin as “a vocal proponent for greater independence” and a driving force behind the establishment of the global body. But Griffin had been just as powerful a force within the Australian financial planning landscape before taking on the world.
From global to local
Throughout his career, Griffin has recognised the need for financial planning to lift its game in order for the public to recognise it as a profession worthy of trust and respect.
“It goes back to how I approached my own role when I came to the community here in Tamworth,” Griffin says. “I thought I have to at least live up to the standards that my clients, or my potential clients, expect of their accountant or their lawyer, because that’s the benchmark they would measure us against.
“In my mind, I had to at least meet those standards. You had to be professional, and in my mind there was an automatic expectation that education standards had to be lifted, because that’s what people expect of their professional service providers.”
This view was cemented in the early 1990s. The financial planning industry was reeling from a series of crises – interest rates hit 17 per cent, there was a recession, the unlisted property trust industry was imploding and Estate Mortgage became the largest financial product collapse up to that point. And although the industry didn’t know it at the time, more was to come – an Asian financial crisis hit that led to so-called capital stable funds proving to be anything but stable, creating unexpected losses for investors that reflected poorly on the people who had recommended the products.
“I was keen to find ways in which financial planning generally could be more readily accepted,” Griffin says. “My thinking was we at least…have to look, and should behave, like traditional professions, which included professional standards, ethical conduct, education prerequisites.”
Following the merger of the Australian Society of Investment and Financial Advisers (ASIFA) and the Australian chapter of an American body, the International Association for Financial Planning, in 1992, the resultant Financial Planning Association became, essentially, the only body in town pursuing the ideals Griffin already supported. So he got involved.
He was instrumental in the establishment of the New England chapter of the FPA, even though the chapter didn’t then meet the FPA’s minimum-member requirement. In 1995, the FPA board invited him to chair the Towards Professionalism taskforce, which set out the steps the association would need to take to shake off its reputation of being controlled by the big end of town and become a member-only organisation. Then the board invited him to chair the national Continuing Professional Development committee.
Griffin and Perth-based financial planner James Doogue became the first financial planning practitioners elected to the FPA board, in 1998. Griffin served as president from 2000 to 2001, attending his first International CFP Council meetings as FPA chairman-elect.
Griffin was instrumental in establishing the Future2 Foundation and then, when charged with spearheading its fundraising activities, established the Wheel Classic bike ride that, by tradition, coincides with the FPA Professionals Congress; bikers completing the final leg of the ride arrive at the opening of the event.
“In the heat of when every news story about financial planners was bad, we needed to be able to say, look, here’s what we do for the community,” Griffin says. “That’s been my whole objective. My thinking has been that every financial planner should put $1000 a year into it. After-tax, it’s not a lot of money. And within a very short period of time there’d be another million dollars in the kitty.”
Control over client outcomes
Griffin says he counts himself lucky to have received solid training in financial planning when he joined the industry, which provided the foundation of the views he later took into the FPA and onto the global stage.
He had left school and deferred university, moving to Sydney to pursue a dream of becoming a professional road-racing cyclist and following in his father’s wheel tracks. But when it became apparent that wasn’t going to work out, Griffin moved back to his hometown of Inverell, in country New South Wales, and took a job in the insurance industry. About 14 months later, he attended a conference in Mudgee at which he learned for the first time about being licensed as a financial adviser.
“I was fascinated by it,” he says.
Griffin contacted Investor Security Group (ISG), founded by the late Robert Keavney.
“In my mind at least, if Robert were still alive today, he would be someone to make the list of Pioneer interviewees [in Professional Planner],” Griffin says. “ISG was a great nursery for me while I learned about portfolio construction and other financial planning principles. In 1989, there was very limited interest in financial planning by Australian academia, so starting my career with ISG, with strict supervision and training, was quite fortunate.”
At the end of 1992, Griffin moved to Tamworth and switched to a licensee owned by a major bank. Disillusioned with the pressure to use master trusts and sell global bond and capital-stable funds even as global bond markets were melting down, Griffin left and obtained his own Australian Financial Services licence (AFSL).
“There were issues around what sort of service the licensees were giving an adviser who was remote from them,” he says. “I should stress that in no way is Tamworth remote, even though people think it is. I wanted to have more control over what the outcomes for clients were. Even though as an adviser you can’t guarantee anything, at least if you’re able to build your own recommended list and have input to that – I’m happy to apologise for my mistakes if I make them.
“But it was getting to the point – and it was a constant feature in a period when I used a master trust, a non-discretionary system – where I ended up apologising for other people’s mistakes, just administration mistakes or, indeed, asset-allocation mistakes. I wanted to have control over my cash flow, because I felt I wasn’t getting value for money out of what I was paying the licensees. [But] if I was able to get 100 cents in the dollar, then it became entirely my responsibility for the clients’ outcomes. There was no hiding liability or responsibility.”
An adviser’s utopia
Griffin maintains that individual responsibility, and removing an adviser’s ability to “hide under a licensee’s umbrella” is critical for financial planning to separate itself once and for all in the public mind from the idea that it’s the sales arm of the funds management industry.
“My utopia for financial planners, if it were logistically possible, would be that everyone has their own licence, and everyone is accountable directly to the regulator,” he says.
“You need advisers to take responsibility right on the chin, and act as if it is their [own] licence directly at risk.”
Griffin took a break from the industry when he sold his business in 2009, before an opportunity presented itself to buy it back and form a partnership with Justin Baiocchi in 2012, to create Baiocchi Griffin Private Wealth.
Griffin says that despite the bad publicity that has buffeted the industry, and despite the dislocation created by constant waves of regulatory change, the industry is today generally doing a good job for clients.
“I think it’s in a really good place if you look at individual practitioners, particularly those who have been around for a long time and have very well-established, very loyal clients,” he says. “We only ever hear the bad news. What we’re not hearing about is the thousands upon thousands of good quality, highly trustworthy planners and how happy their clients are, who’ve stayed with them for a very long period of time, and whose children are now clients of the planners. These are the good news stories.
“That’s not to say we can rest on our laurels, because there are always ways to improve what you do, but I think it’s in a good place. It’s in a far better place than it was when I first started.”
He adds, however, that as long as clients are seen as a commodity, some problems will remain.
“That’s what I think is missing – there’s too much focus on the commodity of the client, rather than on the client as an individual,” he says. “That won’t change until the big end of town changes its attitude towards this.”