From a self-confessed super nerd to a Marx Brothers movie; from bedding-down the Future of Financial Advice (FoFA) reforms to the birth of a financial planning profession; and from churning of life policies to running better businesses, Professional Planner kept readers’ fingers on the pulse of developments during 2013. This is how some of the profession’s key players saw events, as they unfolded:
“We’ll see the end of days where fees are charged in accordance with market movements that bear no relationship to the service delivered.”
Jenni Mack, CHOICE, 6/2/13
“From what we know there isn’t going to be a one-size-fits-all approach to FDS.”
Paul Derham, Holley Nethercote, 6/2/13
“And if you still think industry funds are anti-planner then, with the greatest of respect, you’re mad.”
Professional Planner 8/2/13
“Clearly Julia Gillard and Wayne Swan are out there trying to find more revenue, thinking that they can target superannuation as a soft touch.”
Mathias Cormann, shadow minister for financial services and superannuation, 18/2/13
“We believe APES 230 in its current form will create an unlevel playing field.”
Andrew Conway, Institute of Public Accountants, 20/2/13
“Honestly, I don’t think I’ve ever seen a more cringe-worthy advertisement for financial planning or planning for retirement.”
Professional Planner, 22/2/13
“One needs to be careful that someone’s holiday reading isn’t allowed to set the agenda for the rest of the year.”
Jonathan Ramsay, van Eyk Research, 25/2/13
“Bests interests and the safe-harbour steps are one thing, but the advice still needs to be appropriate.”
Tim Nethercote, Holley Nethercote, 27/2/13
“We believe the transition period to July 1, 2014 for all licensees/dealer groups is in order to allow an orderly and appropriate transition to the new rules.”
Mark Rantall, Financial Planning Association of Australia, 6/3/13
“I would ask that you ensure every opportunity is afforded to the colleagues in your professional network to join our professional community before this change takes place.”
Matthew Rowe, FPA, 6/3/13
“We still harbour significant concerns about the ability of the financial advice industry to retain appropriate incentive schemes to promote both good advice and adviser productivity,”
Brad Fox, Association of Financial Advisers (AFA), 8/3/13
“Codes will work well when they are positive statements about how an adviser is going to deliver a great outcome over time for their client.”
Peter Kell, Australian Securities and Investments Commission (ASIC), 11/3/13
“Clients will give you feedback. You just have to ask.”
Terry Bell, Business Health, 13/3/13
“If you don’t think financial advice on life insurance is a problem area for ASIC and for industry, please think again.”
Peter Kell, ASIC, 15/3/13
“There is now unprecedented, across-the-board clarity about the graduate outcomes expected for financial planners.”
Mark Brimble, Associate Professor (finance) Griffith University, 18/3/13
“Enshrining the terms in legislation isn’t necessarily a win for consumers, because people with the FoFA ‘seal of approval’, as it were, can still receive conflicted remuneration; and it’s not a win for professionalism, for exactly the same reason.”
Professional Planner, 22/3/13
“Typically, if you examine a financial planner’s business, you find that they could be generating a lot more revenue if they would just shift their activities.”
Bill Bachrach, US practice management consultant, 27/3/13
“How many of us at a practice level have such good systems that we can accurately track what services were provided? This is where the heavy lifting has to be done.”
Matthew Fogarty, national practice development manager, The Encore Group, 3/4/13
“Groucho Marx once said: ‘Those are my principles. And if you don’t like them, well, I have others.’ The APESB is beginning to look like a Marx Brothers movie.”
Professional Planner, 5/4/13
“The Board strongly recommends to professional accountants that clients be charged on a fee-for-service basis for financial planning services.”
Kate Spargo, chair, Accounting Professional and Ethical Standards Board (APESB), 8/4/13
“While the majority of advice provided was adequate we did find concerning pockets of poor advice.”
Peter Kell, ASIC, 12/4/13
“He was, as an example, an older, life insurance-focused adviser who really required a lot of handholding and support and for us that’s a lot of energy devoted where you don’t get significant value.”
Fiona Navarro, Apogee Financial Planning, 30/4/13
“There has been little evidence that the SMSF sector has dropped its guard; indeed, the evidence is to the contrary.”
Graeme Colley, SMSF Professionals’ Association of Australia (SPAA), 10/5/13
“Ladies and gentlemen, I stand before you today a confessed superannuation nerd.”
Bill Shorten, Minister for Financial services and Superannuation, 13/5/13
“Small financial planning businesses will receive no support from government with the implementation of Future of Financial Advice laws on July 1.”
Dante De Gori, FPA, 15/5/13
“A lot of planning is done when people have already got money: ‘I am retiring; what do I do?’. But who is talking to the 30-to-40-year-olds to say, if you start now, doing a little bit today can make a big difference at the end?”
Matt Lawler, Yellow Brick Road, 24/5/13
“My fear is that once we have done all of this, it doesn’t necessarily translate into more people engaging with a financial adviser.”
Andrew Waddell, AMP, 27/5/13
“We see problematic churning in just about every case where we see problematic advice in a licensee more broadly.”
Peter Kell, ASIC, 7/6/13
“I am not aware of any specific example of a financial planner being investigated over the tax advice given.”
Richard Batten, Minter Ellison Lawyers, 21/6/13
“What person would approach ASIC if they suspected we might discuss their case with a newspaper reporter?”
Peter Kell, ASIC, 24/6/13
“There are far too many SMSFs that are sub-economic, that the operational costs cannot be justified.”
Nick Sherry, Citi consultant and former minister for superannuation and corporate law, 26/6/13
“On any objective measure of what a professional association is, the FPA would meet that requirement.”
Deen Sanders, Office of the Professional Standards Councils and formerly FPA, 1/7/13
“We now have the pieces of the regulation jigsaw puzzle – we just need to bring them all together and work with the regulators to achieve the big picture we want to see.”
Hugh Elvy, Institute of Chartered Accountants in Australia (ICA), 8/7/13
“We have undertaken a complete redesign of our compliance processes, training, recruitment and governance along with a suite of new advice tools and a series of key appointments.”
John de Zwart, Professional Investment Services, 19/7/13
“This rush goes against expectations because most believed there would be little activity in the immediate wake of FoFA.”
Dennis Bashford, Futuro, 26/7/13
“The institutions worked out fairly quickly that they could never charge advisers enough to make a profit out of the dealer group.”
Ray Miles, Fortnum Financial Advisers, 31/7/13
“The removal of the accountants’ exemption will be a major tipping point because in the past accountants have been conservative and said, no, they didn’t want to get into holistic advice.”
David Lane, Count Financial, 5/8/13
“In releasing our updated guidance for research providers, we clearly communicated our expectation that research providers needed to lift their game.”
Peter Kell, ASIC, 7/8/13
“This fledgling industry of financial planning has copped a torturous period of regulatory reform on the chin.”
Mark Rantall, FPA, 12/8/13
“There’s no shortage of smaller firms and principals looking for a buyer but there are much fewer quality large businesses.”
Barry Lambert, CountPlus, 26/8/13
“It’s not our job to dictate how advisers should be remunerated, but it’s no secret the industry would like more advisers to write hybrid or level business because that’s stickier business.”
Mark Vilo, Asteron Life, 28/8/13
“Financial advisers are being made to pay for the incompetence of life companies and their senior management, who have been unable to manage the pricing series and who can’t rationalise their portfolios of products and services.”
Simon Swanson, Clearview, 4/9/13
“There is a realisation among businesses which are well organised and well run that FoFA isn’t that difficult to comply with, and small businesses… can move quickly to put the right processes and procedures in place.”
Soula Cargakis, Associated Advisory Practices (AAP), 6/9/13
“We see growth in that single-office, boutique-level [advice businesses]. But one of the strengths of FoFA is it’s forcing AFSLs to put processes into their businesses. You need systems. You can’t do it by memory or a paper diary. You need a process.”
Dan Powell, Actuate Alliance Services, 13/9/13
“Demand for advice has never been higher, yet consumers aren’t knocking down advisers’ doors. That’s because people don’t jump out of bed in the morning and say, I’m going to seek financial advice. It all depends on getting referrals.”
Mark Ballantyne, Financial Wisdom, 2/10/13
“When we made the decision to deliberately strike out and move away from being an industry association to being a professional body, we were told by a lot of people that it wouldn’t work and financially it would be the end of us.”
Matthew Rowe, FPA, 11/10/13
“If the consensus view is right and in five years 80 per cent of all SOAs will be limited plans, then advisers need a first-rate system to let them deliver financial plans simply and quickly.”
Wayne Wilson, Rubik Financial, 14/10/13
“If you’re a member of the professional community and you sign up to our standards and meet all of our requirements, it doesn’t matter who you work for or who your licensee is: you’re welcome.”
Matthew Rowe, FPA, 21/10/13
“Advisers aren’t lawyers and don’t need to be, but every self-licensed adviser should do a short course in contract law and get a solid grounding in legal contracts.”
Claire Wivell Plater, The Fold, 4/11/13
“The easiest way to end this discrimination is to instruct ASIC that administration platforms are not investment products.”
Peter Johnston, Association of Independently-Owned Financial Professionals (AIOFP), 15/11/13
“I’m not talking about one or two per cent or thousands of dollars. In some cases, the payment is off tens of thousands of dollars, or up to 40 per cent, and in every case in favour of the life company.”
Col Fullagar, Integrity Resolutions, 29/11/13
“When we did work around the value of advice, in particular advice around transition to retirement, we found there are still too many advisers in accumulation mode.”
Peter Kell, ASIC, 18/12/13
