A clear future for financial planning

Product pushing is a bummer. Disclosure is all good. Financial Services Reform (FSR) is a positive. Becoming a certified financial planner is a must. Fee-for-service is cool, but that doesn’t mean taking a commission is bad or anything — just as long as it’s all disclosed.

At the tender age of 20 and only in the planning game for about a year, Tegan Woodberry has clear cut views on her newly chosen profession.

And like many young people who are just getting into financial planning, she is sick of hearing about planners pushing products or getting something on the side.

“FSR was needed to make people pick up their act,” she says.

“And as an added plus, it’s making people understand exactly what financial advisers do.”

Clients have also been winners in the new regulatory environment, Woodberry says.

“I think FSRA has been a positive for a lot of clients out there because they can see just how hard their advisers are working for them and they can go ‘wow’, I actually know I’ve got someone good looking after me, not just looking after themselves for whatever reason.”

A paraplanner at Sydney-based Vandenbergh Financial Services — part of the ING-owned Tandem Financial Advice Group — Woodberry doesn’t just have strong views on adviser integrity. She is also very serious about wanting to help people properly manage their money. Including herself.

Woodberry resists the temptation to spend all her pay at the shopping centre on Thursday nights.

“I’ve put myself on a budget. I set a certain amount away for saving and a certain amount for spending, so the job’s had a positive effect on me.”

Woodberry doesn’t cop any flack from her mates for wanting to be a financial planner.

“My friends actually think it’s pretty cool.

“I give them a few helpful suggestions, no advice or anything, just telling them what I was doing and they’re like ‘wow, that’s good’, so some of my friends have now got budgets happening as well.”

She jokes that when she is a fully-fledged planner, they can come in and see her to sort out a financial plan.

By then she will be a certified financial planner (CFP).

“I don’t just want to get the minimum qualification and expect people to then trust me with their money.

“I’d rather get as much experience and as much learning as I can because I’ll be a better person for it and I’ll be able to help clients with different things.”

It was only a year ago Woodberry started her first “really serious job” as a paraplanner from a background in hospitality. She will finish her diploma of financial planning (DFP) in December this year. She hopes to become a financial planner by the end of next year.

Woodberry is not sure exactly what field of planning she would like to specialise in, because she is still learning about the industry. However, she hints that corporate super might be a good way to go because there “are so many avenues you can go down”.

“But if I can, I’d like to focus on getting young people involved, sort of putting the emphasis on how to have insurance with income protection or trauma in case something happens and letting them know how important managing their super is for their future.”

Ideally she will offer fee-for-service advice, but concedes finding an appropriate method of planner remuneration is no black and white issue.

“I think for myself that fee-for-service is the only way I’d charge people, because I wouldn’t want people who are only coming in to get free quotes wasting my time. I’d prefer to spend more time improving my genuine clients.”

But she believes there is room for commission-based advice, as long as it is disclosed.

“In a way, commission-based actually shows the client that the adviser is doing something.

“If I was a client and I was getting charged all these fees, I’d want to know that someone was out there actually watching my portfolio. I wouldn’t want someone just sitting on their butt doing nothing, just getting money from me. So I think in a way, commission has a good side because it shows the client that the adviser is willing to work for their money.”