ri adviser group | learn professional development days – november & december 2014
TRANSCRIPT
RI Adviser Group | LearnProfessional Development Days – November & December 2014
2
Disclaimer
Important Notice
RI Advice Group Pty Ltd, ABN 23 001 774 125, holds Australian Financial Services Licence Number 238429 and is licensed to provide financial product advice and deal in financial products such as: deposit and payment products, derivatives, life products, managed investment schemes including investor directed portfolio services, securities, superannuation, Retirement Savings Accounts.
The information presented in this seminar is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. RI Advice Group strongly suggests that no person should act specifically on the basis of the information contained herein but should obtain appropriate professional advice based on their own circumstances.
FOFA 2014: so where are we now?
22–25 Sept
2nd motion to disallow scheduled
Grandfathering Excluded
Amended Bill tabled
Amended Bill tabled
1 October2nd motion to disallow
was voted against
SoA requirements
Cooling off Period
Best Interests
Enhanced Public Register
24 Sept
3rd motion to disallow full regs.
GrandfatheringIncluded
1September
3 DecemberLast day to
consider 3rd motion Grandfathering
Included
17-19 NovemberVOTE
SUCCESSFUL
24-27 NovemberSenate sitting
scheduled
SoA requirements
Cooling off Period
Best Interests
Enhanced Public Register
22–25 Sept22–25 Sept 24 Sept24 Sept
1 July 2014 Regulations remain as current law;
However:
Amended Bill requires the 3rd reading within Senate to pass.
5
Summary of Findings - October 2014
Misaligned Remuneration structures
• Conflict of interest with client needs and providing strategic advice.
• No correlation between complexity of advice and Adviser remuneration
Current Business Models Create Conflicts of Interests - Encourage strategic advice, product retention and innovation.
• Making product changes can drive policy holder lapses
• Stepped premium policies lapse at a higher rate
• Current remuneration structures can incentivise product replacements
Poor Quality of Advice – 37% failed to meet the relevant legal standard
• Inadequate link between advice and client’s best interests
• Inappropriate scaling of advice;
• Poor documentation;
• Weak rationale for product replacement advice;
• Low relationship consideration - life insurance & superannuation
ASIC Insurance Report - Review on Life Insurance Advice
Legislative Change – Enabling ‘Practice Advice’
6
Who is the ‘providing entity’ for financial product advice? Providing entities may be AFS licensees or authorised representatives (RG 175.34)
• Licensees when an employee provides the Advice;
• Authorised Representatives themselves when they provide the Advice.
Who is best placed to be your clients ‘providing entity’?
• A Practice’s Corporate Entity can be the providing entity to deliver Advice.
• Flexibility for Practices with more than one Adviser;
• A solution where locums are engaged.
• Directors must be aware of their responsibility and liabilities.
RI Advice Process Response
• The RI Advice FSG will soon allow for this ‘providing entity’ choice.
• A simple letter to existing clients will provide the transition of advice to your new corporate entity.
• PDMs can help you understand your responsibilities
For additional advice, an SOA is not required, as long as…
(b) the providing entity has previously given the client an SOA in relation to the advice
(Corporations Act 2001- section 964B (1)
RI Advice Survey – Adviser Survey Feedback July 2014
7
Positive 2015 Business Outlook
Positive about business growth - Half from referrals
Focus on sourcing the rest:
• Existing Clients: New opportunities, referrals
• Nurturing Centres of Influence and Alliances
• Acquisition
Most Valued
• Alignment of value proposition with my needs
• Alignment of culture/values with my own
• Review process effectiveness
• Advice process effectiveness
Initiatives Well Received• Cashflow and EP4L initiatives viewed positively
Segments have differing priorities yet…All want support to:
• Build business efficiencies
• Provide affordable advice to lower balance clients
• Acquire new clients
• Manage Compliance unpredictability
You also need:
• More marketing materials
• Training and business planning support
• Enhanced RI Advice communications
• OnePath platform development
• Technology integration & support
Endorsement of RI direction
Delivered on many of these since July – Now to implement and embed
Executing on our Strategy – Sustainable Business Model
UNDERPINNED BY CORE LICENSEE SERVICESMarketing, Technical Consulting, Planner Supervision and
Governance, Research, Professional and Practice Development, Advice Tools and Systems
UNDERPINNED BY CORE LICENSEE SERVICESMarketing, Technical Consulting, Planner Supervision and
Governance, Research, Professional and Practice Development, Advice Tools and Systems
EFFICIENTBEST
PRACTICE
EFFICIENTBEST
PRACTICE
GROWINGREVENUESTREAMS
GROWINGREVENUESTREAMS
MAXIMISINGVALUE
MAXIMISINGVALUE
SUSTAINABLE BUSINESS MODELSUSTAINABLE BUSINESS MODEL
Delivered in 2014
9
Business Strength• Health check. • Business and marketing plans• Establishing new referral sources
XPlan enhancements
Simplified advice process. • Risk Only SOA• Flexible Fact Find• Enhanced EPM • Bulk ROA’s – EPM V2
Enhancing communication:• New RI format • Mobile videos • Trade Press
2 Year Roadmap: On track
1. Brand • Localised marketing roadmap• One Path Brand strategy
2. Platform Strategy• Development on current platform • Future concept agreed
3. Engagement • Business engagement framework• Estate Planning for Life • Cashflow Management solutions.
4. Business Support • Grow and Succeed Framework
Major Initiatives for your Clients – Cashflow Management
10
Strong cashflow management is the
cornerstone of effective financial
planning
Major Initiatives for your Clients - Estate Planning for Life
11
Crisis management plan: A solution to the question: What will my Family do in a crisis?
Re-defining Estate
Planning for Advisers and their Clients
Supporting Australia’s Intergenerational Wealth
Transfer
Roadmap deliverables
* Available in Build package with Explainer video1 Maximum reimbursement is $3,000 for Accelerate package
Wealth Report – Client engagement made easy
13
Financial Snapshot
Re-engage with existing clients
Connect with new clients.
Engaging, automated, simple, fun process
Professional, personalised, interesting report
Use it in conjunction with the RI Consumer explainer video.
14
Outsourcing a Platform – Steps to the future state
Market Tender
Conductanalysis to
shortlist
Conduct Due
Diligence Migration
Current Reality
DesiredReality
Not core businessNot core business Low appetite for investmentLow appetite for investment Insufficient scaleInsufficient scale
Best of breed - 1st quartileBest of breed - 1st quartile Appetite for investmentAppetite for investment Forward development agendaForward development agenda Leverage scale benefits Leverage scale benefits Retain distribution capabilityRetain distribution capability
AnnouncementAnnouncement September September
Stage 1 – August to SeptStage 1 – August to SeptStage 2 – Oct to Dec Stage 2 – Oct to Dec 2014
DecemberDecember Quarter 1Quarter 1 2015 2015
TBA – negotiation withTBA – negotiation with successful tenderer successful tenderer
RI Connect 2015
16
Danang, VietnamHyatt Regency Resort and Spa
18-20 March
CREATE
INNOVATE
IMPLEMENT
RI Adviser Group | LearnProfessional Development Days – November & December 2014