Financial planners start the year with a reality check

Although financial planners are in for another tough year, the Financial Planning Association’s Mark Rantall believes this could be a good time to reflect on how to create a sustainable positive outlook for one’s business.

Last year once again saw an eventful 12 months punctuated at home by endless regulatory announcements dominated by, but not limited to, the Future of Financial Advice (FOFA) reforms, the usual political ructions and reshuffles, and ongoing industry tensions between factions with varied vested interests.

All of this was underpinned by the prevailing ominous cloud of global uncertainty driven from both sides of the northern hemisphere – in the United States and, more worryingly, from Europe.

Despite a robust economy and good growth prospects, the knock-on effects of overseas events resulted in a stock market return that was 10 per cent down on the previous year.

From the Financial Planning Association’s (FPA’s) vantage point, our ‘helicopter view’ of the financial services landscape in Australia tells us that financial planners are in for another tough year in 2012.

Clients will continue to need reassurance and rebalancing of their portfolios.

Markets will continue to be unpredictable. Governments and regulators will continue to wax and wane in the course of finalising and executing new policy and legislation.

Financial advice business models will continue to be challenged and adjusted.

And you – the professional financial planner – will continue to juggle all of these demands while striving to provide an important and valuable service to Australians in helping them to secure a healthy financial future.

This is a good time for financial planners to take stock and reflect on how they can create a sustainable, positive outlook for their business.

What are your answers to the following questions?:

• Do you make it crystal clear to your clients what they’re getting from you, how much it costs and how they will pay?
• Is it clear to your prospects why they should entrust their financial future in your hands?
• What additional steps can you take to reduce your compliance risks?
• How do you set yourself apart from other financial planners, and what can you do to promote your professional reputation?
• If you are growing your practice, how can you attract the best talent and distinguish your business in the community as trustworthy and working to the highest standards of care?

Tough times present tough challenges. But it can also present a perfect opportunity to take a reality check and think about exactly how you can create a clear and vibrant future for your business.

While you can take time to reflect, consult your peers and family, or enlist the support of your dealer group, it is also a good opportunity to engage with your professional body to seek answers to these questions.

Making a commitment to your professional body and signing up to a code of ethics are, in our view, key elements of creating a strong and fulfilling professional future for financial planners – whatever is happening in the world around you.

Mark Rantall is the chief executive officer of the Financial Planning Association.

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