Winners of Adviser of the Year and Practice of the Year

64 Pages·2014·7.19 MB·English

THE FINANCIAL
Vol 18 No. 34 | December 2014
An official publication for members of the Association of Financial Advisers
Winners of
Adviser of the Year and
Practice of the Year
Eleanor Dartnall and Complete Financial Balance
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Ben B A Rising Sta Kate Mcemale Excel eter O’Clence in Ed
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A retirement
plan needs a
strong
foundation.
Challenger
lifetime
annuities.
1800 331 782
If you’re looking for a solid foundation for a client’s retirement portfolio, a
Challenger lifetime annuity can help. These investments provide the certainty of a
regular income, guaranteed for life. They can also help clients increase benefits like
the Age Pension or access the Commonwealth Seniors Health Card. Layered with
the Age Pension and other investments, the income from a Challenger lifetime
annuity can help cover the essentials and provide peace of mind for the long term.
To find out more, call 1800 331 782.
Challenger Life Company Limited ABN 44 072 486 938, AFSL 234670 (Challenger) issues the Challenger Liquid Lifetime Annuity. Investors should consider the current product
disclosure statement available at www.challenger.com.au and the appropriateness of the annuity (including any risks) to their circumstances before making an investment
decision. The word ‘guaranteed’ means payments are guaranteed by Challenger from the assets of its relevant statutory fund.
THE FINANCIAL Vol 18 No. 34 | December 2014
An official publication for members of the Association of Financial Advisers
A retirement
CONTENTS
plan needs a
Professionalism and Leadership //
strong
4 We live in interesting times
5 The New Model for Valued Advice
10 Regulatory Change
foundation.
- FoFA Amendments Regulation - Disallowance
Welcome to the December edition of the AFA - Adviser Register
Financial Adviser Magazine. - The Development on the Education Front
- ASIC Response to Disallowance
As 2014 comes to a close and we reflect upon
Challenger - ASIC Report on Life Insurance Advice Quality
the year, it is important we recognise the value
- Tax Agent Services Act
of deep thought. For whatever role you are
lifetime 25 Client – onboarding: first impressions drive lifetime outcomes
currently in, letting something turn over in your
46 Weathering the media storm
mind is one of the most valuable things we can
annuities.
do. Too often this gets disregarded.
Member Focus //
My job or your job is nothing without time for
8 AFA Award Finalists
contemplation. It’s easy to look back at the
9 AFA Rising Star Award Winner 2014
week, month or year and realise there was no
15 Campus Insights
time to come up for air between the day-to-day
16 Member Service Perspective
tasks that will never define our role.
32 AFA Excellence in Education Award 2014
Please take this opportunity to read through
33 AFA Female Excellence in Advice Award 2014
this issue, where we collectively show many
40 AFA Adviser of the Year Award 2014
great examples of how the AFA community is
41 Practice of the Year Award 2014
innovating in how quality financial advice is
55 Conference summary
being provided.
Turn to page 4 for a re-cap on the year from our Communities of Practice //
new National President Deborah Kent and 18 What GenXt means to the Adviser Community
insight from our CEO Brad Fox. Hear from this 19 HR is not just about big business
year’s Award Winners on what the award means
20 Changing Perceptions
to them and how the whole award process has
made them re-evaluate different parts of Adviser Performance //
their businesses.
19 Improve your service offering by gaining a deeper understanding of underwriting
We have a goal to achieve great advice for more and claims
Australians. We are building professional 43 Funding insurance through super – with choice comes complexity
pathways to help build on the knowledge you 45 Engage online to bridge the gap between information and understanding
already have which will give you the 49 Creating certainty in retirement income
opportunity for greater success as an adviser.
Business Performance //
Also in this issue we have highlights from this
year’s AFA National Adviser Conference, which 27 Investment platforms on the rise
1800 331 782
continues to be one of the cornerstones of the 54 The End of the Human Adviser?
advice community calendar. 59 #GotSocial AFA National Adviser Conference 2014
If you’re looking for a solid foundation for a client’s retirement portfolio, a
We hope you find some inspiration from the
Quality Advice Strategies //
Challenger lifetime annuity can help. These investments provide the certainty of a many ideas our authors present and that they
regular income, guaranteed for life. They can also help clients increase benefits like serve as the spark to get you to think, create, 29 Safeguarding retirement – in any environment
the Age Pension or access the Commonwealth Seniors Health Card. Layered with and most importantly, to act. We welcome all 31 Building better portfolios - What really drives returns?
feedback, so feel free to email me. 35 Longevity risk: the new retirement planning challenge
the Age Pension and other investments, the income from a Challenger lifetime
37 Caution needed on group insurance
I hope you enjoy the issue and have a great
annuity can help cover the essentials and provide peace of mind for the long term. 38 The Changing Face and Value of the Age Pension
Christmas break.
To find out more, call 1800 331 782. 48 Deeming of account-based income streams
Kate 52 Add value to your business - by creating a better experience for your referral
Challenger Life Company Limited ABN 44 072 486 938, AFSL 234670 (Challenger) issues the Challenger Liquid Lifetime Annuity. Investors should consider the current product [email protected]  @AFA_Voice sources and centres of influence
disclosure statement available at www.challenger.com.au and the appropriateness of the annuity (including any risks) to their circumstances before making an investment
decision. The word ‘guaranteed’ means payments are guaranteed by Challenger from the assets of its relevant statutory fund.
The Financial Adviser DECEMBER 2014 3
Professionalism and Leadership //
BY DEBORAH KENT
AFA National President
We live in
interesting times
“We live in interesting times1,” said... It is certainly the view of the AFA that this holds true today.
Over the last four years, in much the same way as financial advice us so that you can concentrate on your advice, your clients, and
practices have been evolving, the AFA has been through a period of your businesses. We take this responsibility to represent you
enormous change that reflects new expectations of financial advice seriously – it is our primary objective to be the leading advocate for
and advisers. The media buzzword has been disruption. The AFA’s the value of financial advice and financial advisers.
suggested approach to our members has been to tackle this
We place great importance on helping our members to deliver great
disruption positively – to Innovate: Think. Create. Act.
advice and service to their clients. The issue of formal adviser
We are seeing many advice practices finding new opportunities by education and training standards is expected to be resolved in the
reinventing themselves. The drive toward professionalism has gained first half of 2015 and it is clear that minimum requirements to be an
terrific momentum and this will provide the platform from which the adviser will increase. There are practical reasons why this is essential
advice market can grow substantially in the coming decade. as one step to improving the public’s perceptions of the
professionalism of financial advisers, but we also recognise that
The Baby Boomer generation is retiring now at the rate of over 1,000
some advisers with great experience but low formal qualifications will
people a week and this will accelerate rapidly over the next few years.
need to attain additional formal recognition of their capabilities. We
Life expectancy continues to increase placing greater emphasis on
are seeking flexible alternatives for our members in this regard so that
funding longevity alongside a growing need for aged care advice. The
an experienced adviser has choice on how to meet the new
younger generations (X, Y and Z) have greater awareness of financial
standards.
advice, superannuation, insurance and investment options through
the proliferation of digital content marketing. This generations of Our strategy of developing the Fellow Chartered Financial
consumers will consider personal advice much earlier than the older Practioner (FChFP) and Chartered Life Practioner (ChLP)
generations. It is our view that the stage is set for the demand for designations at Masters-level is being proven as the correct
advice to explode. The question is: Will this demand for advice be met approach as licensees set aspirational pathways for advisers to
through advisers providing personal financial advice and what factors improve both their knowledge and capability whilst also meeting
are required to achieve that outcome? consumer expectations around expertise. Enrolments are rapidly
growing as advisers look to stay ahead of the curve for minimum
In developing the strategy of the AFA we have a clear umbrella
education and training standards. Many more are now recognising
outcome that we believe will benefit our members and the greater
that the AFA designations can be achieved within the framework to
good of society: Great advice for more Australians. The essence of
attain a Masters of Financial Planning if that is your ultimate goal.
this is for the AFA to work diligently to improve the overall quality of
financial advice and the service being offered by advisers, whilst also We acknowledge that higher qualifications are not a cure-all to
helping Australians to understand what financial advice is and how solving the reputational challenges facing advice. Achieving a
it can benefit them. Building the reputation of financial advisers and universal culture of professional conduct is what is required and this
the personal advice they provide is essential if we are going to see needs to exist in both the IFA and employed adviser space. We are
our members and their businesses thrive. very confident that our members do an outstanding job, but we
need to ensure that the culture of putting client’s best interests first
Great advice is about relationships and trust; having the emotional
is supported at all levels of the advice market. We need licensees to
intelligence to understand not just what client’s goals are, but also
play their role in driving positive advice cultures, and we need
how they think and what are their values. This is the competitive
manufacturers to also understand that an adviser’s first loyalty is
advantage that an adviser has over direct products, no-advice
not to them, but to the client. We have seen incentives offered to
solutions and robo-advice…but it’s only an advantage if an
advisers that work against the adviser staying true to the greater
unadvised consumer knows the difference.
good of being client-centric. Removing these is an example of what
These are big picture challenges. They involve representing you with
we mean by creating a culture that supports great advice outcomes.
government, regulators, FOS and the public. At times it means
The Board’s commitment is that the AFA will continue to lead,
representing you within the industry as we are currently doing in the Life
support and inspire our members as change continues to impact on
Insurance and Advice Working Group (LIAWG) where we are advocating
you and your businesses. We will try to help you navigate the
for industry wide solutions on the issues raised in ASIC’s report into
changes, both good and bad. In return, we ask that you let us know
personal life insurance advice. The problems seen in that report have in
from time to time how we are going – what we are getting right, and
a number of cases come from inappropriate incentives that conflict with
what we can improve.
the adviser’s responsibility to meet the best interest duty to their client.
We certainly live in interesting times.  @AFA_Pres
One of the key benefits in being a member of the AFA is that you are
delegating the responsibility to deal with these big picture issues to
1. Robert F. Kennedy
4 The Financial Adviser DECEMBER 2014
Professionalism and Leadership //
BY BRAD FOX
AFA CEO
The New Model for
Valued Advice
The advice value proposition expected by clients has changed.
The key theme the AFA has promoted in 2014 has been for advisers to Innovate: Think. Create.
Act. We have encouraged advisers, practice owners and licensees to rethink how they deliver
advice and bring value to their clients. It is clear that this has resonated with many and the
examples of practices making deliberate change and benefiting from the transition are
growing rapidly.
As direct product offerings, robo-advice and general To be fair, many advisers have already moved to the
advice on insurance, superannuation and investment New Model and are meeting these aspirational client
becomes ever-more accessible and available, financial expectations, particularly in their initial engagement
advisers are no longer the gate-keepers to information process. As time goes on though, the tendency has
and product access for their clients. been to regress at review time to discussions on sums
insured, investment returns and portfolio holdings
In what I will call the Old Model, financial advisers were
instead of the issues that connected the client
seen as providing access to products, information and
emotionally with your advice and with you.
reporting. In an environment where your clients found
it challenging to access Adding value as an adviser,
these things themselves, the particularly in an ongoing
adviser found it easy to add
advice relationship, is found
The opportunity in the
value. Now, clients have
in reconnecting the client
direct access to all of this New Model is for the advice emotionally to the
(albeit some do not have the
behaviours required from
practice to deliver value
inclination to access it
them to achieve their goals
themselves). They don’t through becoming the – and of course keeping the
need the adviser in the same
accountability coach to the goals relevant to the
way as they used to for basic
changing circumstances of
financial advice needs and clients, and doing this with
the client. It is my experience
product access.
empathy, understanding, that most clients face some
This challenges the Old form of significant change in
judgement, consistency
Model still being offered by their circumstances every 3-5
many advisers. Clients, and persistency. years or so. It could be a
particularly new clients, are marriage, a divorce or
looking for more from their separation, a pregnancy, or a
adviser - Something different child entering the next
and far more valuable. significant phase of their life such as starting high
In the New Model of financial planning businesses, the school, moving out of home, falling in or out of love
competitive advantage (the uniqueness) a great and moving in or out of home. Perhaps it is
adviser brings to the client relationship is based on redundancy, retirement or a career change, or an
connecting the client’s emotional drivers with unexpected yet significant change in health. Your
decisions that improve their ability to achieve their client’s focus is easily distracted from the long term
 @AFA_CEO
ambitions. But then it goes further, which is keeping outcomes in their financial plan in favour of simply
the client accountable to their decisions and the coping with the immediate challenges life puts in front
actions agreed to achieve their ambitions. of them.
The Financial Adviser DECEMBER 2014 5
// Professionalism and Leadership
The opportunity in the New Model is for the advice practice to We have developed a theme for 2015 to support advisers go further
deliver value through becoming the accountability coach to the in the journey to provide advice that fits this New Model. It is
clients, and doing this with empathy, understanding, judgement, Connecting Knowledge with Performance. It is centred on how to
consistency and persistency. It means the technical product and take the knowledge and skills that an adviser has and using them
strategic advice knowledge you have is still important, but of more effectively to create improved performance. This can be
increasing importance is your ability to understand your client and applied to both the individual adviser improving their performance
their decision making process. Developing the best advice strategy and at the practice level.
without the ability to persuade the client to take the advice and
For some advisers, it will expose gaps in knowledge or skills that
maintain the actions required to follow through will mean little at
become learning opportunities – for others it will be about
the end of the day except a disgruntled client base and a less than
developing the discipline and framework to consistently deliver
satisfied feeling for the adviser and the practice staff.
New World advice value and maximising performance.
Contrast this to the emotional experience you have when you know
that your advice has made something extraordinary possible for a Connecting Knowledge with Performance is about practical
client. You may have this experience from an insurance claim outcomes. GenXt, Inspire, Leaders Forum and Campus AFA events
following you convincing the client to retain the cover after they will connect you with the opportunities to learn from the best
wanted to cancel it; a client retiring early and booking the trip of a advisers and practice owners as well as thought leaders from both
lifetime; a client that helps their son or daughter get their first in and outside of the financial advice market. I am convinced that
home; or the client that for the first time has confidence that they we have reached a tipping point where those that retain the Old
are in control of their money and their dreams. It is such an Model will find themselves missing the opportunities of a lifetime.
emotionally satisfying job when you do it well! It’s time to start the change if you haven’t already.
AFA NATIONAL TWENTY
15
ROADSHOW
HOBART MELBOURNE
 
Tuesday 3 February Tuesday 10 February
ADELAIDE SYDNEY
 
Wednesday 4 February Wednesday 11 February
PERTH BRISBANE
 
Thursday 5 February Thursday 12 February
For more information please visit our website: www.afa.asn.au
6 The Financial Adviser DECEMBER 2014
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The Financial Adviser DECEMBER 2014 7
Member Focus //
AFA Awards - Finalists
Adviser of the Year Practice of the Year Finalist
PJ Byrne, Winner - Eleanor Dartnall, Catherine Robson Rising Tide: Chris Browne, Matt Hale
Practice of the Year Finalist
Robina Financial Solutions: Troy Theobald, Paul Forbes Gaicd
Female Excellence in Advice
Adrienne Rush, Sarah Riegelhuth
Winner - Kate McCallum, Dominique Bergel-Grant
Excellence in Education Finalists
Shaun Hunt, Jordan Hawke, Executive General Manager, Asteron,
Rising Star Finalists Geoff Ivanac, Vjay Ghelani
Ben Nash, Catherine Wells, Winner - Benjamin Budge (Absent from photo -Winner Peter O'Callaghan,
Samantha Robson, Phillip Thompson Charles Badenach, Jonathan Wu)
8 The Financial Adviser DECEMBER 2014
Member Focus //
AFA Rising Star Award
Winner 2014
WINNER 2014
Q A
&
Q. What does winning the Rising Star award mean to
you?
It’s extremely humbling. To be put up against outstanding Ben Budge
advisers and be judged the winner by some extremely
AFA Rising Star of the Year 2014
respected industry professionals and the AFA has been a great
experience. It is also recognition that what we are currently
achieving with our clients and the wider community is at a high
standard.
Q. How can we make great financial advice accessible
to more Australians?
Q. If you could change one thing in the Australian
I believe to achieve Great Advice for More Australian you need Financial Service industry what would it be?
to empower them and give them understanding of the
I believe financial literacy is the key to creating and
necessary steps for them to make great financial decisions. To
empowering clients to make smart financial decision.
do this I feel we as advisers need to constantly create simple
Clients and potential clients want their advisers to be their
analogies and interactive tools to tell more educational stories
decision architects for their financial journey, so what I would
to give our clients the AHHMM moment of understanding of
like to see changed would be more emphasis within our
what needs to be done.
industry networks on advisers providing real financial
Cutting some of the unnecessary compliance and red tape that education to their client to create real understanding and
has been built up over the years wouldn’t hurt either. engagement before we start talking about specific products
or asset classes.
Q. What are you doing better than your financial
planning peers? Q. Tell us about some things that you’re doing with
the wider community to make it a better place.
What I think I do well is my ability to build strong and trusting
relationships with each of my clients. I am a people person and We conduct community educational seminar’s on a monthly
from day one it has always been about my clients and how I can basis which goes through financial literacy/strategy. We
help them attain their financial goals. We are able to commence always include a specific client case study which we think is
this process of trust building and creating clarity within our first suitable for the monthly topic. We also have bi monthly
hour of meeting with my clients. We do this through our webinars and provide Pro Bono advice to specific segments
engagement tools and processes of our local community.
The Financial Adviser DECEMBER 2014 9
Professionalism and Leadership //
BY PHIL ANDERSON
AFA COO
Regulatory Change
The Government has needed to fight three motions of Disallowance to the FoFA Amendments
regulations in the Senate. Unfortunately on the third attempt on 19 November 2014, as a
result of the defection of Senators Lambie and Muir, the ALP has been successful in disallowing
the regulation. Unlike the second disallowance motion, which excluded all the Grandfathering
provisions, the third motion disallowed everything.

Key points The planned changes to FoFA were through both • Extended grandfathering for employee
 FoFA Amendments legislation, that needs to be passed by both houses of remuneration arrangements
Regulation disallowed Parliament, and also by regulations that can be • Grandfathering – Growth phase super to pension
on third attempt by the
approved by the Minister. Whilst regulations do not product transition
Australian Labor Party.
need to be passed by parliament, they can be • Permissible Revenue – Enabling the passing-on of
 The second half of
2014 has seen a disallowed by either House of Parliament. The FoFA exempt benefits
continued focus upon Amendments legislation has now been passed in the • General Advice Exemption
the Financial Advice House of Representatives, and is awaiting debate in • Balanced Scorecards – Employee Bonuses
profession through the
ongoing debate on the the Senate, although the disallowance of the • Interim Solutions (18 months) for the removal of the
FoFA Amendments and regulations brings this into question. Opt-in, FDSs for existing clients and the “Other
the ASIC Report on Life
Steps” obligation.
Insurance Advice.
FoFA Amendments Regulation
 A number of
parliamentary reviews – Disallowance ASIC Response to the
have looked at the issue
Disallowance
of adviser competency
The regulation package effective on 1 July 2014
and it is clear that
professional and included the following key elements, each of which On 19 November 2014, in response to the
educational standards have now been lost as a result of the disallowance disallowance, ASIC made a statement that they
will be rising in the
short to medium term. motion on 19 November 2014: would take a practical and measured approach
 The ASIC Life Insurance • Grandfathering – Advisers changing licensee, through until 30 June 2014. This is welcome, although
Review has posed some establishment of new licensees and sale of a the issue with grandfathering on an adviser changing
key questions for the business (or book of client) licensee cannot be resolved by ASIC, and requires
industry to address.
regulatory intervention. We have called on the
Government and the Opposition to do this as a
matter of urgency.
 @Phil_Ando
The Government and Opposition agreed to resolve
Grandfathering on 26 November.
10 The Financial Adviser DECEMBER 2014