Following a year of unprecedented events which forced businesses both in and outside financial services to forge new methods of engagement, this year’s ifa Business Strategy Day - a mainstay on the financial adviser event calendar - focused on overcoming the challenges of 2020 and building a more resilient practice in 2021.
This year’s event was held in a two-day virtual format as sporadic COVID outbreaks continued to pop up in Australian states, driving home even more forcefully the importance of preparing for the unexpected and navigating a digital-first world.
The free-to-attend conference, run in partnership with MLC, was designed to arm advisers with the tools required to evolve in a post-pandemic environment, as new challenges spring up around compliance, cyber security and the transition from a remote to a hybrid workforce.
Day 1 round-up
Kicking off the event on 30 March, FASEA chief executive Stephen Glenfield shared that more than 1,200 students were now enrolled in approved financial planning degrees as the advice industry moved towards a profession.
Amid concerns that many advisers would fail to make the deadline for exam compliance, Mr Glenfield said that the standards authority had seen a huge uptake in registrations for the March sitting of the exam as advisers took advantage of the opportunity for multiple sittings before the end of the year.
“With a pass rate of close to nine out of every 10 advisers, by the end of March we would expect to see 70 per cent of the FAR having gone through the exam,” Mr Glenfield said.
More than 2,300 advisers had registered for the March exam, according to FASEA figures.
Mr Glenfield also revealed further details around how the exam questions were developed, after some training providers in the industry critiqued the ambiguity of the wording as a source of confusion for advisers.
“All the questions are reviewed before they make it to the exam, firstly by peer review where each writer presents their questions to other writers, and we also have an expert panel made up of industry professionals,” he said.
“FASEA also reviews each question to determine that they are fair and appropriate to put into the exam, and there’s an agreed percentage across each of the knowledge areas.”
Mr Glenfield said an “extensive process” was also undertaken with regard to the marking of the exam, and questions that were deemed too subjective could sometimes be removed from consideration.
“An extensive process is undertaken by ACER and experienced markers in the field of advice, with two independent assessments of whether the question was right or wrong,” he said.
“ACER flags questions for review by the panel and FASEA - that may be because the data indicates there’s more than one answer, in which case that question comes out of the exam marking.”
Meanwhile, Shadforth Financial Group founder and Global Adviser Alpha principal David Haintz’s key message to advisers was to focus in on the areas where they believed they added the most value to clients.
“You need to be clear where you add value and where you don’t - a price may be what people pay but value is what they get,” Mr Haintz said.
“A key point we need to revisit again and again is that cost is only an issue in the absence of value.”
While asset-based fees were still permissible in the current regulatory environment, Mr Haintz said it was likely these would be naturally phased out in favour of flat fees that were directly aligned with the services being provided by the adviser.
“This is a natural evolution - there will continue to be more pressure on AUM fees and fees will be more aligned to where the value is being delivered, that being advice and strategy,” he said.
When it came to boosting the value clients delivered to advisers, Mr Haintz said practitioners needed to focus on perfecting the client experience and streamlining as much of the administrative side of advice as possible.
“Right now benchmarking data tells us advisers spend 40 per cent of their time in new client meetings, and nearly 50 per cent of their time in back office matters such as administration, plan preparation and internal meetings,” he said.
“Advisers should be spending the majority of time seeing people and producing revenue, so good systems and processes are the key.”
He added that while some consumers may be choosing to self-manage their finances using online tools, “technology by itself is not the sole disruptor - it’s the customer experience or lack thereof”.
“Amazon did not kill the retail industry, the retail industry did it themselves with poor customer service,” Mr Haintz said.
“Unpack every step of the client experience, challenge yourselves and compare the customer experience with other industries that do it really well.
“Are we asking questions in valuable face-to-face time like what’s your birth date or do you smoke, or are we capturing that as part of the hygiene in their own time and are we asking them more meaningful questions around core values and goals? Are we capturing what they really care about?”
Day 2 round-up
On the final day of the event, EY senior manager of cybersecurity Sunil D’Souza warned that as advice firms increasingly adopted time-saving technology to drive efficiency, it was important for business owners to do their due diligence on the security of different offerings and what was needed on the business end to maintain that security.
“There is a rapid adoption of new technology, but are we asking [providers] the right questions in terms of who is going to access it, are we doing the right kind of testing to see if the patching is being done properly?” Mr D’Souza said.
“The other area of concern is phishing - attackers know that advisory firms are a clearing house of everything they need in terms of data and personal information they can easily use for identity theft. There are many different ways they can try and get into that - it could be trying to listen to your conversations with your client, or using mechanisms like phishing emails.”
Mr D’Souza said COVID had exacerbated these issues, with data from cyber security company Malwarebytes indicating that 20 per cent of all attacks in 2020 had come from employees working from home.
He added there were “simple strategies” business owners could deploy to mitigate security risks, including educating staff around what a potential cyber attack looked like and how to use technology tools in a way that did not compromise security.
“One of the key things to start with is cyber awareness. You could have the best technology available to support your business, but if people don’t know how to use it then it’s got no value - you’re spending money to build and maintain that technology and not getting any benefits,” Mr D’Souza said.
Following one of the most difficult years for advisers in recent memory, as the COVID crisis combined with a number of major royal commission reforms to put extreme pressure on businesses, EQ Minds managing director Chelsea Pottenger shared some useful tips for staff and practices who may be struggling to keep morale up.
Ms Pottenger recommended firms start their regular staff meetings with a “success of the week”, to tap into a ripple effect of positivity that had been scientifically proven to boost mental health.
“If you take 30 seconds around the virtual office to share a win, what happens is the person sharing that gets oxytocin and dopamine - happy chemicals - their mood will get uplifted and they’ll become happier,” she said.
“Thirty years of research has shown that there are these things called emotional contagions and they are very real. The way you’re turning up to work, the way you communicate to your friends, your staff, your clients, all these interactions have a direct impact on the other person’s mood by 45 per cent.
“So if you start your meeting with a success of the week, you’ll see this positive ripple go across your team. People will also bring in these amazing successes and share how they did it with the rest of the team, so you’ll get these new ideas across the company.”
Reflecting on her own experience with depression, Ms Pottenger said remembering past challenging experiences was a key tool to build resilience and help adjust mental perceptions about the ability to overcome hard times.
“When it comes to resilience and building up self efficacy, we have this perception about what we can or can’t do,” she said.
“When I suffered severe postnatal depression, my psychiatrist asked me to talk about a tough time I had overcome. My mind reverted back to when I was 16 and all my mates made the Riverina basketball team except me. My coach said if you train with me five days a week you could make the state team, so every morning I trained and I made the team.
“If you survived last year, use that as your anchor point. For me, nothing could be as bad as being in that psychiatric hospital - I know if I can survive that, I can survive anything. That’s how we rebuild ourselves and it’s the process of building grit.”
ifa thanks our event partners and speakers for making the Business Strategy Day 2021 possible.