Planners urged to be ‘smart’ this year

“Smart” financial planners will have made New Year’s Resolutions to change the way they run their business to meet consumer and regulatory expectations, according to Prescience Consulting managing director Wayne Wilson.

Otherwise the questioning of planner worth - ignited by last year’s Australian Consumers Association/Australian Securities and Investments Commissionquality of advice survey - will intensify and result in a regulatory environment that is likely to “stifle the industry”.

The comments are a call to action by Wilson for planners this year, and in light of events last year which he deems was a “terrible year for financial planners’ reputation in the community”.

“Smart financial planners will accept that there is widespread community unease about the relationship between financial planners and fund managers.”

“They will decide to make their own life easier and have business practices in line with community expectations, by not accepting any lavish entertainment or other ‘soft commissions’ from fund managers as a matter of policy,” Wilson says.

Wilson also calls on fund managers to revamp their business model, and rather than “throwing large amounts of money” at financial planners, he believes they should focus on implementing more targeted and personalised strategies through their business development teams to show how their products will work for clients.

Wilson applauds recent action taken by the associations in leading the industry “at last” - singling out the Financial Planning Association’s (FPA) restructure, and work on the draft code of conduct on soft dollar commissions by both the Investment and Financial Services Association (IFSA) and the FPA.

But Wilson believes that for advisers who want to get the jump on their competition, following the letter of the law isn’t enough.

“The smart financial planners are the ones that are anticipating what is needed and are prepared to go further than is currently being demanded. The intelligent approach is ‘this is what the community will expect from us in the future, so let’s not only go one step further but let’s do it now’,” Wilson says.