Roundtable part 2: Reputation of advisers

(L to R): Chris Browne, Catherine Robson, Paul Forbes, Michael Nowak, Eleanor Dartnall, Brad Fox, PJ Byrne, Tapel Cafer, Andy Marshall

On the eve of the Finalist showcase, AdviserVoice gathered together all of the finalists for the AFA Adviser of the Year and Practice of the Year Awards along with awards partner Zurich for a round table discussion to share ideas and canvass industry issues.

Here in the second of a three part series, we look at the reputation of financial advisers in the broader community and what can be done to improve it. (Read the first roundtable here, read the third roundtable here).

Who’s who

Catherine Robson, Affinity Private – Finalist in AFA Adviser of the Year

PJ Byrne, Mr Insurance – Finalist in AFA Adviser of the Year

Eleanor Dartnall, Dartnall Advisers – Winner, AFA Adviser of the Year

Paul Forbes, Robina Financial Solutions – Finalist in AFA Practice of the Year

Chris Browne, Rising Tide – Finalist in AFA Practice of the Year

Tapel Cafer, Complete Financial Balance – Winner, AFA Practice of the Year

Michael Nowak, Joe Nowak Financial Services Group and National President of the Association of Financial Advisers (AFA)

Brad Fox, CEO of the Association of Financial Advisers (AFA)

Andy Marshall, Head of Sales Strategies and Research for Zurich’s retail risk business

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AdviserVoice: How do you think that advisers are perceived now compared to, say, 12 months ago or 24 months ago?

Tapel Cafer

Tapel Cafer: It’s declined, because if you Google “financial planning” now, you’ll get snippets of what happened to Commonwealth Bank and Macquarie and blah blah blah. So, really, with what’s happened recently, it probably has tarnished our industry a little bit.

Paul Forbes: Advisers are the meat in the sandwich in the campaign between instos and industry funds and that’s really hurt us. It’s got nothing to do with advice. Industry funds keep coming out and saying “we don’t pay advisers or we don’t pay commissions” – of course they don’t, they don’t do advice. So, every time I see social media jump up and all the responses come up from advisers and they shred each other. Wake up to yourselves for goodness sake. This has nothing to do with us.

Brad Fox: We’ve been on the record a number of times as reminding the industry funds that they’re a product provider. The challenge is with how they’re developing their models at the moment. They want to be an advice provider but they want to do it without meeting the same best interest test that other advisers do.

AdviserVoice: Do you think that there are any other wedge drivers? Any other manipulators of image?

Paul Forbes

Chris Browne: Ease of entry. I saw Ray White is moving into financial planning. I look at that and I think if I wasn’t in the industry, my perception of the industry would lower again. I think there needs to be more rigor to be a financial planner – education and shoulder-to-shoulder experience.

Catherine Robson: I think, as an industry, we need to move from advocacy about ourselves to advocacy on our behalf by consumers because we’re doing such as good job. It’s got to be us as an industry being judged by our actions, not our words.

Catherine Robson

But I think there’s also power in actually advocating for other advisers. Part of what this forum is all about to me is the connection the advisers make with each other. And having had the opportunity to get to know Eleanor [Dartnall] so well over the last 12 months, there’s another adviser that I would trust with my own family. So when there’s a client that I can’t look after, it’s fantastic to have that, and also to be able to tell the story about why another adviser is fantastic. And, as a community of advisers, I think that’s a really good investment for us to make.

Brad Fox: When we talk about being profession, that’s what professions do, they don’t tear each other apart.

Catherine Robson: Just because you’re a profession doesn’t make everyone fantastic, but I think you raise the bar to the point where you feel comfortable that there are people that you genuinely trust.

AdviserVoice: What’s one idea that you have at the top of your head that could help turn the reputation around?

Chris Browne

Michael Nowak: I’d start with mainstream journalists. We need to educate them. I believe that they’re starting with a very low level of knowledge about what advisers do and the benefits that we provide, and we could make some huge inroads if we just engage them over time and if they’re aware of how we help Australians.

Chris Browne: I think we’ve just got to roll out the right advisers to them, you know? It’s got to be people of this calibre as opposed to anyone.

Michael Nowak

Brad Fox: Just imagine we got half the advisers in Australia next week, say 8,000 of them, to tell one true recent claim story to a thousand people: we just communicated to 8 million Australians – a third of the population – in a week about what you do. It’s not hard.

Catherine Robson: Being part of an industry body is such an important value add for me, particularly as a business owner, because you get the opportunity to meet advisers and hear what they’re doing. Why do you think there aren’t more advisers who are joining the industry bodies and being part of it?

Brad Fox: There is no motivation in their mind to need to do it, and that can be an experienced adviser who thinks they already have the work that they need or it might be someone that just doesn’t earn enough to want to spend $500 on a membership. It seems quite ridiculous but they’re the sorts of responses that you get.

AdviserVoice: What’s the proportion of advisers who are members of a body?

Brad Fox: Well, 16,000 to 18,000 advisers is the commonly used number and about half of them. There’s a risk that they might water down a great culture. So, we’ve actually got to manage that as we’re going to go through the announcements that have been made over the last six weeks by different bodies and different licensees about going towards compulsory membership of a professional body. We’ve got to make sure that we get to interact face-to-face with those advisers to bring them into our culture rather than let them think it’s a tick-a-box exercise – “I’m now a better adviser.”

Brad Fox

Chris Browne: To indoctrinate them into the AFA culture, I reckon we should actually create accreditation around ethics – train people around ethical issues.

Brad Fox: We actually have one, Chris. It’s one of the four units for the Fellow Chartered Financial Practitioner FChFP. When you’ve done that one unit, it’s all ethics, you qualify for the entry level designation Associated Chartered Financial Practitioner AChFP.

Chris Browne: Well, I think it needs to sit in a silo and it needs to tackle things like pricing, it needs to tackle things like churning, it needs to roll out people like us because I’ve sat down with countless young advisers who have got their first job with a bloke out in Boronia who’s a pretty average adviser and they actually think that they’re doing the right thing. They actually think that (behaviour like) churning is okay.

Brad Fox: That’s one of the options the board is considering is to how we land on that and when can we land on that.

Tapel Cafer: We need a multi-prong approach. We talked about the younger generation we need to educate, but when you’ve got the older group who are educating young advisers in the old style we need to tackle them as well. There’s so many fires here we’ve got to tackle from so many angles, it’s an intergenerational thing.

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The Association of Financial Advisers Awards gave separate recognition to the best individual adviser and to best advice practice for the first time this year. The winners were announced at the AFA National Adviser Conference, to be held in Cairns, October 12-14. Zurich has proudly partnered with the Adviser of the Year Award since its inception in 2003 and now also for the inaugural Practice of the Year Award.