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Remove all conflicts of Interest? You’re Dreamin’​!

Remove all conflicts of Interest? You’re Dreamin’​!

It is unfortunately too easy to find trade press reflecting the wrong-doing of an individual or organisation in the financial markets. Should the nature of any indiscretion or activity be measured by degrees, or is it outright fraudulent? Is being ignorant of “Best Interest Duty or Reasonable Basis” any better than knowingly disrespecting this lawful responsibility when a financial adviser? A recent article was titled “The idea that commissions are not conflicted is akin to the argument that guns don’t kill people“. Having read the article it made sense to me and is clearly consistent with the direction of the industry. Interestingly, in reading to the end, the author represents an association that supports independent advice (and names his individual business also). This is the world of educational/content marketing as a means to an end – in this case to grow their membership and promote his business as a responsible independent service. Arguably, is it not a subtle conflict of interest to write this article as it promotes the association and his business? Conflict of interest is difficult to avoid. Not just for the financial planning industry & the nature of human behaviour is that people lie. In fact, a fantastic documentary titled “(Dis)Honesty – the Truth about Lies” (Available on Netflix) is a great depiction of human behaviour. It features individuals sharing their stories on the outcomes of their lies (at the time they lied, it was seen in some circumstances as in the best interest of themselves, their family and not hurting anyone else). People lie to protect themselves, not look foolish, avoid conflict, to preserve something they...
Scarcity of Experienced Financial Planning Talent – It’s Coming

Scarcity of Experienced Financial Planning Talent – It’s Coming

If you think it’s already here, there’s a way to go! The proposed educational changes (new and existing authorised reps – AR’s) have been introduced to Parliament. Turnbull has also weighed into the discuss. Over the last 12+ months, change has already begun with many licensees moving to minimum education standards that mirror proposals for the authorising of all new financial planners. These proposed (and expected) changes will impact FP businesses in two ways: A number of ageing financial planners who don’t meet the new minimum will choose to retire from delivering advice at some point before 2024 (or the date that is ultimately agreed). Many new entrants to the industry will come from young graduates similar to professional services today. As we know from accounting and law, pathways to delivering advice do not happen overnight. It takes many years of experiential learning, continuous education and engagement before advice is independently delivered. These two factors will create a “Scarcity Window For Talent” if the industry does not prepare as we progress towards being recognised as a profession. And with scarcity comes opportunity Opportunity for those experienced, well educated business owners and advisers with demonstrated ethics and quality technical and engagement skill. Opportunity for new entrants with a focus and belief that professional advice can be delivered by the industry. That they are the future. Di Johnson, Professor Mark Brimble from Griffith University and Zanetti Recruitment & Consulting have collaborated and recently published a paper in the Financial Planning Research Journal titled “Industry demand for financial planning graduates” – Click on this link for the full report.   The research...
Privacy Rights – The Job Seeker Unknown

Privacy Rights – The Job Seeker Unknown

In the search for a new role, your privacy and how you’re represented to a potential employer are paramount. But rarely does anyone read an agency’s privacy policy prior to engagement. And why should they? There is enough regulation and precedent in the Australian market……right? Wrong!  Although agencies operate under the same legislative framework as employers (Fair Work Act) and potentially a code of conduct if a member of the RCSA (association for the recruitment industry), there is no national regulation (it is being discussed) and the state regime is toothless. Some agencies have no privacy policy available for review. Many people when engaging personnel consultant’s to help them find a new gig are (in many cases) applying for a role online, not knowing the person or agency that will ultimately represent them. What does a job seeker want from an agency and their staff? Connection – A recruiter to be connected, have agreements and relationships with employers Transparency – To be communicated with, to be told what the role is and who the role is with Competence – Know the process and be good at what they do. To be honourable – Ethical and acting in the best interest of all parties Knowledgeable – Of the industry, employer and role they are recruiting for Action – Get me a job.  The right one! There are others however you should be asking yourself this question also: In addition to what I want, what do I expect? Not handled well, the disclosure of your information at the wrong time or without your consent could jeopardise your current employment position or be a misrepresentation of...
Proposed Educational Standards – Three simple questions Financial Planners should ask

Proposed Educational Standards – Three simple questions Financial Planners should ask

We’ve seen all the trade press citing 60% of advisers not having the educational minimums under the proposed federal government framework. I agree many will embrace change. Some begrudgingly. Whether the legislation and creation of the independent body is enacted or not prior to the next federal election, the industry has moved. What will be the response from Authorised Representatives (ARs) who don’t satisfy any new minimum requirements? The answer is simple. Authorised Representatives should ask themselves the following questions: Do I have a continued passion for a career in financial planning and therefore prepared to complete formalised study beyond current requirements to hold AR status by 2019 (or the date eventually agreed)? If I’m over 50 something – Do I have sufficient capital to either retire or pursue other business interests? If a business owner – Can I (and do I have the desire to) continue as an owner, manager and leader of a business without being an Authorised Representative?  If so, what are the implications for existing client relationships and can I deliver sufficient value and opportunity to employees? Whether clarity on the decision is still distant or not, the legislation has bipartisan support and the industry is yearning to improve its image and perceived value.  Many AR’s will need to make a decision sooner than later. Couple this with the proposed new entrants pathway, and there may be a gap in the supply of quality, productive advisers for a period of time. And with disruption comes two choices: The  sky is falling What opportunities arise as a result of change? We see opportunity What’s certain is if you...
What do clients value most about financial planning?

What do clients value most about financial planning?

Griffith University is updating research on the benefits of financial planning for clients, to highlight the reasons that clients stay with the planner over the short/long term and the value that they get from establishing and maintaining a relationship with their financial planner. If you are a client of a financial planner, or run a financial planning business and would like to forward the survey on to your clients, the link to this 5 minutes survey can be found below. The survey is completely anonymous and voluntary.  The research will highlight the benefits of financial planning from the clients’ perspectives, and map the mix of reasons that clients maintain a relationship with their planner. The survey will close on 30 November 2015 Please click here to take part. Thank you for your potential input and assistance, a large response will give us greater detail and evidence of the value of financial planning for clients. If you would like a preview of the questions, please email m.brimble@griffith.edu.au for a PDF. copy. A report will be publicly available early in...