The Moran Principle

I am a bit furious at the moment. On the 30th June 2010 I attended the Department of Treasury’s Melbourne briefing on the “Future of Financial Advice” (www.futureofadvice.treasury.gov.au). I was hoping to hear about Treasury’s view on the future of our industry/profession. I took a couple of hours out of my day on the last day of the financial year to attend because I am committed to the development of my profession. At the table in front of a group of about 100 interested people sat 3 Treasury officials and one ASIC representative. I have no issue with any of these representatives (although I must say that the ASIC rep did not open her mouth and seemed less than interested) – my problem is that the entire session was overtaken by life insurance salespeople panicked by the prospect of a ban on commissions. I use the term life insurance salespeople, rather than financial adviser/planner, on purpose as this is the only way that these people could be characterized. It was an embarra...

Hi All, I have linked an article I found recently on the Financial Services Journal which succinctly comments on many of the issues we all face as we develop our industry into a profession. His comments on home visits are particularly relevent - how many of us have made after hours appointments only to find the 'client' is a 'tyre-kicker'. I hope you find this interesting... http://www.fsonline.com/fsj/articles/110108OHara.shtml All the best, Paul

There are four educational cornerstones that are unique to Financial Planning. The first is investment planning – not investment selection as many think, but the matching of appropriate investments and savings strategies to match a client goal or goals. Secondly, increasing complexity in the area of superannuation and retirement income streams (at odds with our previous Treasurer’s view…) has meant that this has become an area of specialist knowledge. Thirdly, financial planning emerged from the distribution of life insurance products and advising on appropriate personal insurances has always been a natural area of expertise. Lastly, the demography of our client base places us at the forefront of dealing with retirement, and therefore Social Security, issues. This is rapidly expanding into assistance with aged care advice as older Australians are faced with a complex system of means tests. For this reason, Social Security and Aged Care becomes the fourth cornerstone. The ancillary ar...

The industry super network (ISN), in its continued assault on financial planners, recently released a self commissioned report from Rice-Warner that states financial planners will be better off under their proposed system of advice. The report also indicates that the nation may be $117 billion better off over the next 15 years under this system. Further, they have released an internal research report – Supernomics – that suggests that competition should be outlawed as the continued use of higher fee super funds implies competition has failed. The reports, however, do not stand up to much scrutiny on a number of grounds. The ISN suffers from a severe case of financial myopia. They seem to believe that superannuation is the source of the only significant financial decision that individuals need to make and further, that it should be seen in isolation from other financial decisions. Having worked as the executive manager of advice in a quasi-industry (not for profit) fund, my experien...

Hi there, this blog is a series of short essays relating to Financial Planning for you to consider and comment on. With the huge changes that are going on within our industry at present, I thought this would be an appropriate means to get some dialogue going. It doesn't seem that many in the media are interested in this - let's see how it goes.