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 embarrassment that the government bureaucrats given the responsibility of influencing the future direction of my profession had to listen to the rubbish being spoken by these dinosaurs.
Despite the official’s continued explanation that there is currently no discussion of a ban on insurance commissions until at least 2012, attendee’s had to sit and listen to comment’s like the following:
“This year marks 50 years me of selling life insurance”, “I’ve been in this industry for 40 years”, “let me tell you a story about what a great man I am because I sold someone a life policy who died”, “you just don’t understand”, “commissions are a good thing because I wouldn’t sell any life insurance without them”.
You get my drift!
I am sorry to say that I lost it part way through the presentation. After listening to the first 40 minutes of a one hour Q & A and having only 3 of these dinosaurs ask questions from the front row (no hands up – just yell out your opinion), I respectfully asked the officials if they could at least get to some people who patiently held up their hands to ask questions. I think my exact words were “WILL YOU PLEASE SHUT-UP!”
My point here is that if you have been operating in the industry for 50 years – you are hardly going to be a part of the future of the profession. I am happy to respect the pioneering work of the life insurance advisers – they are clearly the originators or our profession. But surely people can understand that things have moved on.
I guess I tend to argue that there is a difference between someone who sees themselves as a professional sales-person and someone who sees themselves as a professional financial planner.
Over the next couple of years, the profession will have moved way beyond RG146 as a minimum qualification. The CFP mark will become the qualification and designation that the public comes to expect as the rightful minimum. This qualification currently requires a degree (albeit in anything) before applying to enter the program. In a couple of years, there will be specific degree pre-requisites candidates will be required to complete before you can apply for CFP status.
This is a long way from the concept of authorized representative, which originated in an environment where product manufacturers ‘qualified’ you with product training.
A modern day professional financial planner needs to be able to converse with clients authoritatively in the areas of superannuation, personal insurances, cash-flow management, taxation, estate planning and investment strategy. Most importantly, a professional needs to be able to link client goals to appropriate recommendations. More and more, this is separate from specific product based recommendations. Indeed, we have all seen the commoditization of many products in the market place. Is there any real difference between the various wrap platforms or life policies? Sure they all have little variances and nuances, but in principle these differences get less and less relative.
I have no problem, with someone who wishes to specialise in only certain aspects of financial planning – surely this is an inevitable professional development – but a specialist is someone who first learns to be a competent generalist, and then moves on. Can you imagine going to a cardiac specialist who said – “no, actually I know very little about the circulatory system – I’m just a heart man”. Remember our medical system is based on a generalist having to evaluate a client need prior to a referral being made. This is not too far removed from where our professional future is headed.
We are not too far from the day when we will all be expected to be CFP’s, and then some of us will become estate planning specialists, or life risk specialists, or aged care specialists, or investment specialists.
My message should be clear by now – if you are not currently enrolled in, or have completed, the CFP – you risk being left behind as our industry moves towards a professional future.
Anyway, I am keen to hear your feedback on this - positive or negative.
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 embarrassment that the government bureaucrats given the responsibility of influencing the future direction of my profession had to listen to the rubbish being spoken by these dinosaurs.
Despite the official’s continued explanation that there is currently no discussion of a ban on insurance commissions until at least 2012, attendee’s had to sit and listen to comment’s like the following:
“This year marks 50 years me of selling life insurance”, “I’ve been in this industry for 40 years”, “let me tell you a story about what a great man I am because I sold someone a life policy who died”, “you just don’t understand”, “commissions are a good thing because I wouldn’t sell any life insurance without them”.
You get my drift!
I am sorry to say that I lost it part way through the presentation. After listening to the first 40 minutes of a one hour Q & A and having only 3 of these dinosaurs ask questions from the front row (no hands up – just yell out your opinion), I respectfully asked the officials if they could at least get to some people who patiently held up their hands to ask questions. I think my exact words were “WILL YOU PLEASE SHUT-UP!”
My point here is that if you have been operating in the industry for 50 years – you are hardly going to be a part of the future of the profession. I am happy to respect the pioneering work of the life insurance advisers – they are clearly the originators or our profession. But surely people can understand that things have moved on.
I guess I tend to argue that there is a difference between someone who sees themselves as a professional sales-person and someone who sees themselves as a professional financial planner.
Over the next couple of years, the profession will have moved way beyond RG146 as a minimum qualification. The CFP mark will become the qualification and designation that the public comes to expect as the rightful minimum. This qualification currently requires a degree (albeit in anything) before applying to enter the program. In a couple of years, there will be specific degree pre-requisites candidates will be required to complete before you can apply for CFP status.
This is a long way from the concept of authorized representative, which originated in an environment where product manufacturers ‘qualified’ you with product training.
A modern day professional financial planner needs to be able to converse with clients authoritatively in the areas of superannuation, personal insurances, cash-flow management, taxation, estate planning and investment strategy. Most importantly, a professional needs to be able to link client goals to appropriate recommendations. More and more, this is separate from specific product based recommendations. Indeed, we have all seen the commoditization of many products in the market place. Is there any real difference between the various wrap platforms or life policies? Sure they all have little variances and nuances, but in principle these differences get less and less relative.
I have no problem, with someone who wishes to specialise in only certain aspects of financial planning – surely this is an inevitable professional development – but a specialist is someone who first learns to be a competent generalist, and then moves on. Can you imagine going to a cardiac specialist who said – “no, actually I know very little about the circulatory system – I’m just a heart man”. Remember our medical system is based on a generalist having to evaluate a client need prior to a referral being made. This is not too far removed from where our professional future is headed.
We are not too far from the day when we will all be expected to be CFP’s, and then some of us will become estate planning specialists, or life risk specialists, or aged care specialists, or investment specialists.
My message should be clear by now – if you are not currently enrolled in, or have completed, the CFP – you risk being left behind as our industry moves towards a professional future.
Anyway, I am keen to hear your feedback on this - positive or negative.
I couldn't agree more that the dinosaurs were in town. A CFP as a minimum should have been implemented years ago were it not for the vested interests of the institutions that are funding the FPA that are responsible for it.
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