Crossing the divide

In recent years, the growth in China has generated many export opportunities in Australia, contributing to a boom in the commodities sector. This boom has in turn seen a massive demand for workers in regional and remote areas.

The majority of these workers as a result have been able to attract higher salaries compared to the recent past, but have little to spend it on.

In addition, although the Federal Government’s ‘simpler super’ changes, now tagged by the Government as ‘better super’, have made superannuation a more attractive savings vehicle, it can still be very complex and difficult for people to understand.

This has led to a somewhat unique situation, where Australia has a sizable population of high income earners in our more inaccessible and remote areas, with limited access to financial advice.

At Plum, with clients spread across Australia and comprising a mix of industries, from retail and hospitality through to industrial, commercial and mining companies, overcoming the geographical divide is one of our main challenges.

We have found that there is a real demand among members for expert financial planning advice — and that is more apparent than ever among our regionally-based members.

But the real question many of the financial planners we refer our members to have been asking, is whether it is worth their while to service these regional areas and how you go about it.

Demand for financial planners in regional areas

With many of our clients involved in mining, or supporting the mining industries, Plum has been able to gauge the demand for financial advice through its member base in these regional and remote areas.

Because of the commodities boom, these members on the whole have been able to demand high salaries, and this group tends to have significant savings with little to spend it on as a result. What they lack is the professional advice to guide them on where to invest it.

Plum’s education consultants, who visit these remote locations to conduct seminars, have reported back that members are eager to hear more about financial planning.

They often receive so many questions in their education seminars that they frequently run over time.

Members want to deal with professionals who can explain concepts in plain English and with whom they can trust and build an ongoing relationship.

Building trust — understanding the regional member

Beware the financial planner who thinks there is easy money to be gained by simply going to a regional area without doing homework such as understanding members’ current superannuation plan.

Members located out in these areas have often chosen to live in these regional areas to take advantage of the good salaries and low living costs to build up their savings.

As all financial planners know, building trust is key to the planner-client relationship. If a planner wishes to be successful in these regional areas, not only must they deliver quality advice, but they must be able to demonstrate their honesty and integrity.

The financial planners that we have facilitated being sent to these regional areas (see case study) have found the keys to building trust are time and understanding the needs of the regional members, as well as offering quality advice on a fee-for-service basis.

Feedback from the planners is that once established, that trust stands them in good stead, with members referring their friends to the planner. Word of mouth is paramount in this market and a great member experience will lead to quality referrals.

Because of this demand, Plum set up a program so regional members could get access to the Activeplan panel of advisers.

The member response has been massive and our planners have also embraced the scheme.

AdvantEdge ActivePlan

Although Plum’s AdvantEdge ActivePlan panel are spread across Australia and available to most members, a number of Plum’s corporate clients are large mining companies and operate in very remote areas.

Member feedback indicated our regional members were eager to access professional financial planning advice and it was up to us to help them. It began with one planner flying out to Mount Isa and back on a regular basis. The success of this single planner’s visits and the feedback from members convinced Plum it was a program worth pursuing.

At the start of 2007 Plum trialled a new approach — if our members couldn’t get to the cities to access financial planners, we’d take the planners to them instead.

In conjunction with one of our mining clients, the majority of whose members work in remote locations in outback Queensland, we developed a program to get our members the advice they needed and yet make it worthwhile for the planners at the same time.

First of all, we wanted to gauge interest with members, after all, some of these locations are a long way from nowhere and we didn’t want to waste planners’ time travelling out there if no one wanted to meet with them.

Our first client to participate in the program has around 5,350 Plum members.

We targeted members who fell into the 50-plus age group, sending out around 1,100 invitations offering one-on-one sessions with a planner. In the first round, we had nearly 13 per cent of recipients take up the offer of a one-on-one consultation.

We spoke to some financial planners from Brisbane and other nearby locations who were willing to try a new approach.

With all their consultations organised in advance, the planners had confidence it would be worth their while taking a few days out of their work week to visit these remote areas.

The planners flew to locations including Mackay, Emerald, Mount Isa and Darwin. From there, the planners took mining company charter flights, drove for hours through the desert and stayed in remote locations alongside our mining members.

One planner even agreed to regularly service one location so remote it does not have telephone services.

The planners conducted seminars and followed up with one-on-one consultations, and the results have been fantastic.

Initially, our members were a little wary. As any financial planner knows, you need to earn the trust of your client, and our mining members were no exception. But by taking the time to visit these regions, the planners said they were one step ahead in this process, as the members appreciated them coming to these remote areas.

The panel’s planners are now telling us they regularly return to these remote locations every few months and stay longer each visit. They have developed a real rapport with the members on site and they are getting more and more referrals through word of mouth each time they go back.

Since the start of the year, the planners have conducted 222 initial consultations and 65 members have then gone on to access the full range of financial planning services through these planners.

The first planner who began visiting Mount Isa has had even more success. Of all the consultations he has held, nearly 45 per cent have undertaken a holistic financial plan with him.

We’ve just extended the program to another client who also has members in remote locations. We have increasingly segmented our audience and sent 650 invitations to members in the 50-plus age segment.

The initial response has been outstanding, with around 19 per cent of recipients taking up the offer of a one-on-one consultation. Plum’s goal is to invite people of all ages to attend these sessions in the next 12 months.

Our members are also telling us they like this program. We’ve asked for their feedback on the sessions, and 95 per cent indicated the experience was very good to excellent.

They also rated the quality of the planners very highly, with 69 per cent rating them as excellent, with the remainder saying they were of very good quality.

Around 95 per cent of members surveyed agreed that the sessions provided them with an overview of key super and savings strategies.

More importantly, most indicated the sessions had motivated them to take various actions to improve their financial position, including seeking further professional advice.

Michael Mulholland is member solutions manager at Plum .