Professional standards in the advice and wealth management industry are shifting quickly. As a publisher and a thought leader, it’s important to be ahead of the curve at all times, which is why we’ve made the decision to terminate our successful Professional Planner/Zenith Fund Awards.
This decision is in no way intended to take away from the efforts and successes of the winners and finalists.
In recent years, I’ve been struggling to see how sell-side awards ceremonies add any value to the client, not to mention what this backslapping looks like to people outside the industry. By people outside the industry, I mean those paying a percentage of their savings for returns to afford a better lifestyle and a dignified retirement.
The Hayne royal commission hearings and interim findings have already called out many conflicts of interests, but many more will be called out in coming months and the industry needs to make some of these calls itself to move forward. I think the fund ratings process is one of the areas that needs to change, which is why – despite the revenue opportunity for our company – we are walking away from the awards.
Conexus Financial, the privately owned publisher of Professional Planner, holds 20 events across its three titles, which also include Investment Magazine and Top1000funds.com. The fund awards are the only sell-side event in our stable. This particular event is inconsistent with our mission to push the industry to lift professional standards and, ultimately, further the interests of the member and the end investor.
By promoting the awards, we are inadvertently promoting short-term behaviour, which is not what investment or super should be about. Firstly, from a portfolio construction point of view, there’s plenty evidence to suggest that it’s asset allocation, not fund manager selection at all, where the difference is made to investor returns over the long term.
Further, the role of fund ratings and research houses in the ecosystem is heavily conflicted and, indeed, is hampering the progress of the industry towards professionalism. Requiring fund managers to pay for ratings makes the system favour larger managers with multiple funds because they contribute more to the revenues of the ratings agencies. It’s these types of arrangements that end up creating worse – not better – outcomes for clients.
There are too many agents in this industry already. We need to do much better for the end customer in this regard.
Following the royal commission’s final report in February, serious reform will be on the way and there will be no appetite for the financial industry to be congratulating itself, so we are moving now to set the right tone.
Conexus Financial, through Professional Planner and its other mastheads, has core values of making a quantifiable difference, promoting inclusion for women and minorities, and championing diversity in general. Our goal is to encourage growth within the industry, while also promoting more participation in clear and sustainable investment outcomes for individuals and society. In every venture, and in every area, our efforts must reflect these values to remain current, contemporary and relevant.
We thank S&P and subsequently Zenith and all our partners for their past support.