Roundtable part 3: Innovation

(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 final part of a three part series, we look at the innovations advisers are introducing into their practices and how they see innovation changing the way they do business. (Read the first roundtable here, read the second 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 does innovation manifest itself in your business?

Catherine Robson

Catherine Robson: The challenge for me as a small business owner is not getting too distracted by the bright shiny idea. Innovation is fantastic but it’s absolutely useless without good implementation. So, I have an advisory board that does that for me, who’s like, “Yeah, yeah, sounds interesting. How are we going to implement it sustainably? How is it actually going to work?”

AdviserVoice: So, what are some of the ideas that they’ve said “yes” to?

Catherine Robson: The big challenge we’ve got at the moment is to build an international team for part of our administration capability and the opportunity to find really well-qualified people that really care about doing a good job. So, you know, for us, we’ll have one of our team in the Philippines and culturally it’s our obligation to make sure that she’s absolutely part of our team and she’s embedded with our values and she’s had the opportunity to spend time in Australia to understand what we do. So, it’s a very serious commitment for us.

I think one of the things that’s been brilliant for us in terms of having a team member who’s integral to our work that sits in a remote location is that your processes need to be absolutely spot-on because you can’t just wander over to their desk and go, “I didn’t really mean that, I meant this.” So, that has been excellent for us in terms of thinking about the scalability of our business because it’s put the acid on us to really explain properly and have discipline around what are the processes and how do we automate them.

Tapel Cafer

Tapel Cafer: From a technology perspective, we’re very fortunate we have some individual capabilities with our practice that are amazing and we have built some capabilities that are significantly better than XPLAN in regards to the way it produces material that makes it easy to understand. But the only reason we could do that is because we have absolute geeks who at night go home and play with Excel and they love it.

PJ Byrne: One of the best innovations we’ve put into the business is our online review system. So, we were doing the traditional send a letter out to invite someone for an annual review, do the checklist, and here’s a reply paid envelope, and that got sent off in a mail box and then I didn’t really know if it got there. And then, occasionally, a form would come back saying want to increase or decrease or whatever.

So, in February we started sending it out on email, and it’s awesome. It’s actually an invitation for review and they’ve got four buttons to choose from – “Yes, I’d like to catch up for review”. Another is “No, thanks. I don’t want a review this year. Happy with everything.”

PJ Byrne

From a compliance point, we get that straight back, straight into the database. Another button on there is, “Yes, please, investigate a claim,” because we want to re-wake them up to say, “Hey, if you’ve had any serious illness or injury let us know”.

Paul Forbes: For us, clients actually do like phone calls and they do like some physical sort of contact versus the social media.

We’re now moving to XPLAN and we’ve built templates all through that to make sure we remember to touch base after three months. It pops up at the start of the week to say ring these two people to say hello and make sure they’ve got everything, we haven’t spoken to them for three months. And, if they have, there’s a file note there that someone’s already spoken to them in the last three months. But it just keeps reminding us to touch base with these people because they don’t remember emails, they remember telephone calls.

Paul Forbes

Eleanor Dartnall: Along the technology side, I’m no geek. I’m the wrong generation. So, I pulled my son who is a geek out of his job and he worked with us full-time for six months. He built our websites and for Blueprint which is for our young people, we feed them all of their advice because they’re too busy to come in for a one-on-one meeting. They have a one-on-one journey right through to the statement of advice and giving us informed consent. From then on, they haven’t got time. So, if I want to know how they’re going, we don’t call them up; we text them.

The next thing, of course, is we’ve got all these clients who have to do corporate actions, so instead of getting it all out in the mail, they’ve all got to login to the website for their client advice that they get automatically that generates an email, “Please check, sign in, have a look at your advice,” and then they have to push a button, “Yes, we want to accept that corporate action or we don’t.” The default, if they don’t get back to us is we decline them. Can’t tell you how many hours that’s saved – huge. And compliance has signed off on it.

Chris Browne: My frustration is that we don’t have a big safety net under new entrants to the financial advice industry, so about two and a half months ago we launched a business called Club RT. It’s got three pillars. It’s got business coaching because, you know, you can get someone like [Catherine Robson] leaving the National Australia Bank as the best financial planner in Australia but what they forget is they don’t have the business acumen to run a business and know the right time to hire staff and how to indoctrinate them into the culture and they don’t consider the systems and processes. The second one is just licensing infrastructure, giving these new entrants access to Worksorted so they can do their commission and fee reconciliation.

Eleanor Dartnall

And the final pillar is the serviced office because, if I think about Chris Browne eight years ago, I was working down at the front bedroom of my house in Yarraville and it looks bad. So, rather than expecting new entrants to spend $36,000 a year on rent and getting an office out in Sunbury, we’re saying, “Well, work at home 50 percent of the time but, when you need to meet with the client, when you need to share a coffee with a mate to work out what went wrong in that last appointment or what went right, you’ve actually got an environment where you can do this.”

AdviserVoice: Okay. So, what’s the next big thing? We’re looking into the future, into our crystal balls. What does the next 12 months hold?

Brad Fox

Brad Fox: The next couple of years holds the most enormous opportunity for financial advice there has ever been. The demographic demand for advice is going to explode to around about 3,000 to 4,000 people a week retiring four years from now. The challenge for us is how well we want to meet the supply for advice and it’s got to be quality.

Chris Browne: I think the big change over the course of the next 12 months is that we need to raise the bar. It’s not just an accreditation like the CFP or AFA’s equivalent FChFP. It’s coupled with experience. I think that young advisers need to be sitting shoulder-to-shoulder with experienced advisers and they need to be in good businesses – you know, well-systematized businesses.

Chris Browne

Paul Forbes: I think the unintended consequence of FOFA is really moving everything away from product to advice. It’s a much safer world to live in. We’re going to see naked pricing, we’re going to see rebates gone, we’re going to see people actively using rebates to reduce prices to clients, and that’s when we can sit back and say to the client, “That’s what I’ll charge you. That’s all there is to it.”

Catherine Robson: I love the technology. It’s beautiful and it really does some sensational things around helping you manage your behaviour. So, I think, as an industry, we need to recognize that we could be wrong footed really easily by something like a beautiful solution to finances. If we’re not really clear on what value we add we could find ourselves being irrelevant dinosaurs.

Andy Marshall

Andy Marshall: If you see a shift in changing remuneration or pricing models, particularly with insurance, and it gets back to the quality of advice that’s actually being given, there are a lot of advisers who won’t be able to survive in that world because currently their proposition is “I’ll shop around next year and wait for the best prices”. And so, it’s going to come back to that: how are you packaging up that value of advice discussion and, if someone does it on technology, that’s a massive game-changer.

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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.