Thursday, August 04, 2016

Trust in super: "precarious" and "passive"

One area of financial services that DOESN'T suffer a trust deficit is superannuation - in particular the industry fund movement.

So I was intrigued to understand how Sally Patten, Bernie Dean and Damien Mu would approach today’s superannuation Fund Executives Association (FEAL) panel session on trust in brands.

“Superannuation is trusted.
But it’s a precarious trust. 
It’s precarious because it’s passive, not active,” 

For me, the AFR’s Sally Patten kind of nailed it, out of the gate.

Bernie Dean shared how ISA has started by understanding, capturing and communicating about the very real ‘lived experience’ of fund members - and using that as a jumping off point to communicate about superannuation. Hugely successful campaigns are based very deeply in someone’s current reality - what we feel, perhaps deep in our gut, but can’t necessarily articulate. In ISA’s case that may well be that the bank, end of day, will roger you!

And Damien Mu of global insurer AIA talked both about the systemic issues we must over come to to engender trust but also what we must do, rather than say. How do we treat people when they need us most, for example, as an insurer? Do we talk and act in a way that’s about us (pay claims fast) or our member or client (help them on the often fearful journey towards their own death)?

I don’t use that example lightly. What struck me deeply about the nature of trust, as addressed by the panel today, is that to get it right we must start with compassion and deep understanding. 

If we don’t, any product, member service action or marketing is founded on shaky assumptions - most likely erroneous because they’re shaped by our industry experience.

Rufus Black, who spoke before our panel, took as an assumption that we need a stable political and economic system in order for trust to thrive - actually an intact social fabric.

That's a social fabric that's not threatened - as we increasingly hear - by fear that arises from social inequality.

One key risk is that super gets caught up in amore general fear about the economy, about jobs, about the future. Personally I see a very real risk of this.

Closer to home we actually just need super itself to be stable: a system people can rely on. As an industry (as individuals, brands and collectively via industry organisations) we can all work towards this.

So what IS stability? Well it doesn't mean no change - it's a stability that's responsive to markets, economic, social, political and demographic change. It’s responsive to the needs of those it serves.

But it IS a stability that keeps the promise of super.

Government, the industry collectively and each of us as people should perhaps think about both what expectations members have of what we do, and how we do it OR to change those expectations by educating members, then by carefully changing their experience.

From the panel, and our conversations prior, I offer some take home assumptions about trust to frame the conversation inside your organisation.

Assumption 1: Trust is the essential lubricant without which no relationship - 1:1 or en masse to over million members - works
Assumption 2: Trust isn’t always seen or valued - you often don't know what you had until you lose it

Assumption 3- In the end it's about who you DO, not what you SAY - as a person, a brand or industry

Thursday, November 26, 2015

Leadership: smart people, stupid groups and better decisions

Is this the face of leadership?

Who knows?

It might depend on who else was around at the time. Because leadership is situational, and generally means being out in front: listening to the group but not necessarily acting in complete accord with group thinking.

What I do know for sure is that at the annual ASFA conference in Brisbane this week there have been strong, recurring themes about leadership from very different people: an astronaut, a movie star, an academic advising the White House, a futurist and the founder of an NGO.

Buzz Aldrin, Kevin Spacey and Cass Sunstein (all U.S. based) and Australian-based Chris Riddell and Peter Baines can’t all be wrong.

Or can they?

If they were in a group, making a decision about what leadership was, then yes, they might actually arrive at an agreed position or set of leadership themes. And they’d more likely be wrong than if they individually arrived at their position. That would be even more the case given none are women. That’s not personal opinion, it’s the academic’s assessment.

Surely disparate, but cleverer-than-average, types would be expected to arrive at more accurate conclusions about leadership as a group than they would have individually?

Not so, says Sunstein. Why? Because groups are stupid. Well they’re stupider than the intelligence of the individuals in the group apparently. Many of us might already think that in our darker moments. But do we actually use that thinking?

Not always.

Which brings me to leadership. By definition, it doesn’t involve following. And being out front can be deeply uncomfortable. Lonely. Disliked. Mocked.

At the same time? Pioneering. Making the world a better place. Challenging.

These are just a few of the very clear common themes from extraordinarily different people. Leaders in their fields, each had clear views, and some great quotable quotes, on leadership.

Courage is in making the hard decision then living with the outcome. Which child to save? Does it get harder? ‪@peter_baines ‪#ASFA2015

Why did Hands Across the Water work? Because we decided to focus on the results, not the excuses ‪@peter_baines ‪#ASFA2015 ‪#leadership

Leadership is what you do, not your title. Move w speed. Change = upsetting people ‪‪@peter_baines ‪#ASFA2015

Can we take ppl 2 future & show them impact of their decns? Change behaviour? Yes I think we can ‪@KevinSpacey ‪#behaviouralfinance ‪#ASFA2015

Give ppl what they want, when they want it, in the form they want at a reasonable price ‪@KevinSpacey ‪#ASFA2015

The industry previously known as superannuation. If Prince can do it, so can we ‪#ASFA2015 ‪@chrisriddell

VUCA is your new word: volatility; uncertainty; complexity; ambiguity  ‪#ASFA2015 ‪@chrisriddell

Those who are able to adapt to change will b architects of yr future. Those who don’t? Robots are coming for you @ ‪#ASFA2015 ‪@chrisriddell

My friend Stephen Hawking: our future is in space. I’m an ambassador: GPS, cell phones, medical advances ‪#ASFA2015 ‪@TheRealBuzz

Kennedy had the vision, courage, determination to do it. And gave us no way out ‪@TheRealBuzz  ‪#ASFA2015

“Kennedy wanted us 2 go 2 Mars.” He was told moon was possible – in 15yrs. He announced it… ‪@TheRealBuzz ‪#ASFA2015

So were Buzz, Kevin, Cass, Chris and Peter in a green room getting their groupthink on pre-conference? No. They spoke on different days, and one appeared as a hologram. Seriously.

So no green room.

You can thus afford to listen when they tell us, separately, that leadership in any realm of life doesn’t involve making popular choices or getting agreement before taking a decision and moving forward. It  does mean listening – staying silent in fact is best – then making your own call. Making hard choices and living with the consequences. Then moving forward.

So it’s onwards and upwards – even into orbit! ­– to our dear clients and friends in the superannuation industry.

Monday, October 26, 2015

How fintech stirs us: lovers, haters and sceptics

“Fintech. Fintech. Fintech.” It’s childish I know but, like my eight- year-old practising his swearing, I’m just going to get it out there. Simply repeating the word is going to irritate plenty of people. Why? Because it’s become the Rorschach test of our times and industry. Here’s how.

Right up there next to “robo advice”, the word “Fintech” polarises people.

In my experience, senior financial services executives react to fintech both rationally and emotionally. It’s the second half that’s really interesting.

The lovers

So, to the lovers – as exemplified by Rob. He’s a senior executive in an unnamed ‘big 5’ financial services institution. He isn’t actually in fintech, he is a keen observer of the sector ­– for good commercial reasons.

First, he sees the disruptive plays emerging in Australia and offshore as a serious competitive and strategic threat to his own business. Second, he’s curious about the fresh thinking, innovation and potential for disruption inherent in the best emerging financial services technology businesses. A little of that, over here, would be helpful, Rob thinks. Finally, he sees an opportunity to learn to evolve his own business from these players.

Mark Zuckerberg didn’t invent online social networking, but he sure did make it scale. Rob, while working within the constraints of a behemoth, can see opportunity and threat, and wants to be part of the action: driver, not passenger.

The haters

Now to the haters. “Haters gon’ hate”, as they say. It’s a strong word, hate, and it’s hyperbole to say it applies to many. However what I do hear is intelligent, seasoned and normally rational leaders in financial services calling BS on fintech founders, hubs and the broader, albeit emerging, ecosystem.

These people (let’s call them “Fiona”) might be in a sales-oriented organisation where personal relationships or deep domain expertise drive long cycles enterprise sales. They think they are undisruptable. (Too big to fail?)

They forgot about what LinkedIn did to recruiters and Uber has done to the taxi and hire car industry. The new players didn’t kill the traditional model per se but they did kill the ones who didn’t get with the technology. And they sure did smash margins.

The sceptics

Ok, now to the sceptics. Let’s meet John, a.k.a the CEO who told me: “Twitter will never matter to my business because we’re institutional” in 2012. Then said in 2014: “Twitter is the best source of news I have. We think it’s got great potential for our own communication”. John is actually many different people, in many different businesses. But the common thread is this: I’m not buying into the buzz purely because it’s buzz. And therefore just a flash in the pan.

Oh John! Do you remember the “buzz” about digital??? Because that sure didn’t take off … Not. To John my message now would be as it was about Twitter in 2012: “Things are going to happen whether you believe in them or not. So now’s the time to make a call on how you’re going to deal with it.” What is fintech anyway?

Which brings us back to the buzz at hand, the mashed up word fintech. It’s defined variously, but the version I prefer is this, from a Wharton student:
Fin·Tech noun: an economic industry composed of companies that use technology to make financial systems more efficient.

And that, dear colleague, is why it’s an ink blot test. Because by definition fintech changes the status quo. Which we find exciting. #loversnothaters

The first fintech launch I did was in 1997, when I worked for one of those Big 5. It was bad, very bad. The technology was ghastly, it relied on mobile dial up (don’t even start me), and it cost a mind boggling amount of money for something a 10-year-old can now do. I wanted to dig a hole for myself at the media briefing and quietly die. No such luck.

Two weeks ago, by contrast, I chaired the Q&A at the OnMarket BookBuilds media conference where the Prime Minister, Mr Malcolm Turnbull, launched the world’s first mobile application enabling retail investors to buy directly into an IPO or placement. It was an extraordinary moment. The leader of our country showing up for financial services industry innovation, a fair go for investors and the – get this – disruption or increased efficiency of capital markets.

In a few weeks we’ll launch another fintech brand with real potential to shift the game for Australians who want financial advice. Without an adviser. Some will call it robo advice (it’s not), and many will be really annoyed.

The “so what”? My point is this: hating won’t hold back the tide. If we want to evolve our businesses we’d better be watching the people who are going to disrupt the entire value chain. So we can evolve, not devolve, or just disappear.

Be we fintech founder, avid internal change agent at AMP, CBA, ANZ, nab/MLC or BT/Westpac, or a fund manager serving large super funds, there are lessons aplenty from the fintech sector. Some of those will be what not to do. Some might be about how to disrupt traditional structures, give people better financial futures … and make a motza while doing so.

Lots of senior people in financial services understand this. Our BlueChip fintech map has been the single most popular piece of content we’ve put out in our firm’s history. Based on that, I’d say there are more lovers out there than haters. So, as I asked John back in 2012, how are you going to deal with it?

Friday, September 11, 2015

What do in inbound marketing and Barack Obama have in common?

Here in Boston, this man (Marc Maron) is talking about interviewing President Barack Obama. In his garage. That's Marc's, garage, not the President's.

For Australians, Marc is a comedian, performer and hugely successful U.S. podcaster. And the White House called him, not the other way around, to do this podcast with the President.

Before we go too far I should explain I'm at Inbound15 soaking up all the free marketing intelligence I can from some of the world's best marketers, thanks to the good folk at Hubspot.

What can I share with you?

First, it's overwhelming. I have chronic first-timer's syndrome: brain is full, not sure what to do with it all but know I have gold in my swag.

Secondly, it's both personal and professional. Seeing Brene Brown live, listening to Marc talk about Barack Obama might well be once in lifetime experiences.

Third, this is real. The marketing revolution is well underway. And it's now completely accessible to any individual, small or medium sized business or large corporate.

How do I know?

Because we are IN it: we and our clients, and all 10,000+ people here today, are already doing much of what we've heard.


It works. It generates attention, traffic, leads, influence. It drives revenue and business growth.

And that is a thing of wonder. Not that long ago we and our clients were all sitting around, scratching our heads, experiencing patchy success but not yet seeing the full benefits of our efforts.

And partly that's because we've done a lot of "yak shaving", as Seth Godin calls it. A lot of blogging, social media, content, public relations and speaking that led absolutely nowhere commercially. That's just BlueChip's marketing over the last six years, but it's fair to say a lot of our clients' efforts have also been less than clearly commercially successful.

It's the old story: I'm wasting half of my marketing, I just don't know which half.

David Meerman Scott opened the conference, and introduced Seth Godin. These two men alone, both marketing prophets, foretold where we'd be now. Many of us read their predictions over the last ten years and hedged our bets - trying to move into social, integrated, content-led marketing but held back by stodgy corporate culture, lack of the right tools and strategy and the biggest barrier - fear.

Or we took their advice and simply didn't get enough of a return on our efforts. Measurement and attribution were hard or impossible, many of us were just addicted to activity (traditional marketing) not outcomes, or we simply didn't know where and how to start.

The good news, and the overall message from INBOUND15, is that the blueprint for marketing success is now well developed, available to anyone with a laptop, and can reliably deliver commercial outcomes.


In this new world The President of the United States, Marc Maron, Brene Brown, BlueChip and all financial services brands are now content producers and inbound marketers.

Thursday, August 06, 2015

Superannuation: governance and competition failing us?

"We worked very hard in the FSI to not base our decisions on personal experience. But let me tell you one..."

So started a dyspeptic and damning summary of the super system as seen through the eyes of Financial Systems Inquiry Chairman, former CBA CEO, inaugural Chairman of the Future Fund Board of Guardians and now Credit Suisse consultant, David Murray.

Murray proceeded to tell delegates at the FSC Annual Conference this afternoon about his daughter's experience on entering the super system as a casual employees.

In a nutshell it was this: she joined the fund without knowing about it, she was paying insurance premiums she was unaware of it. And she found herself, ultimately, "booted out" of the fund because her savings had been eroded to zero by insurance premiums.

Stepping back from the personal to the macro view, Murray was clear that, in examing the super system, the FSI "found no evidence of a competitive system". Fighting words.


How would we know a competitive system if we'd found it, asked Murray, rhetorically?

We'd see choice, freedom of entry and exit and a lack of information symmetry.

In a damning assessment of super, Murray suggested our super system is far more admired offshore than it deserves.


Governance, and remedies for not meeting governance standards, should be lifted. His general tenor was that super is not competitive, and we need to lift our game.

Murray, of course was also the inaugural Chairman of the Future Fund Board of Guardians. And guard they do, based on Murray's quick relating of the level of governance and the penalties Guardians may face if they don't come up to scratch.

Board members at the Future Fund must make a declaration of interests, including all financial affiliations dating back some three years from the date of the declaration. If you fail to make a declaration that every other Board member has seen, and witnessed, and you're found be in breach, you're open to criminal, not civil proceedings.

It's a high risk game - as it should be when you're responsible for decisions involving other people's money.

"You have to ask, who stands to benefit from opposing independent directors on super fund boards?"

Why is Murray so vehement? Murray's personal view is that the arguments around governance have devolved into what he calls "very silly suggestions".

If the super system is to be of any value to us, says Murray, we need a transparent evolution.

Conflict of interest

Judith Fox of the Governance Institute cited a lack of perception of conflict as key - not jus the reality of a lack of conflict of interest

A Board skills matrix, assessing current and future requirements can enable super Boards to set out proactively to find the skills needed to best serve members best interests. In contrast, perhaps, to a limited pool of candidates who happen to have some alignment to a related union or employer.

Further she said, it makes sense than super find boards should reflect the standards expected of their investee companies.

What of the member?

Independence doesn't equal governance, says Fox. So what about the rights of members? Currently, with no significantly say in the governance of their funds, are they left out of the governance conversation? Not okay, says Fox.

She's right of course. But surely the question then becomes how on earth to get them to understand the issues and have a well-informed and effective voice?

Say "HI" to your new financial planner? #roboadvisor

The afternoon advice concurrent session at Day 2 of the FSC Annual Conference canvassed trust, digital delivery and the ability to scale advice.

Will so-called "robo advice" replace human financial planners?

Not a chance.

One panellist's research shows that when someone wants to start a planing relationship eight out of 10 want to eyeball the planner first.

Why? To establish trust, see the office and surroundings, the pictures on the wall and the quality of the individual.

But let's be really clear: after that they're really happy NOT to see their planner.

After a face-to-face meeting five out of 10 people are then more than happy to be served in alternative ways - online, digital and phone based channels.

Back to "robo advice", what is it anyway? Anything from investment advice and personal portfolio creation to software that helps make overall financial planning decisions.

Does using Google qualify? More people over 40 are using Google searches to access planning advice than are using financial planners.

Or, as the lawyer on the panel asked, is that "ro-oh-no" advice?

Importantly, robo advice in any form probably can't be done properly under the existing legislative regime. It can be done, but it won't be a quick fix.

The question and answer section in these sessions is always where it gets really interesting.

Q: Is robo advice conflict free?
Not necessarily. If a human can be conflicted so too can be the person who writes the algorithm

Q: Isn't people's trust in planners misplaced - history tells us people make poor decisions about whether they can trust someone - so isn't robo advice a much better option?

Simply put we still live in a world where financial services are sold, not bought. Can a program sufficiently encompass all the exchanges in a financial planning interaction?

Q: What kinds of robo advice work offshore?
Portfolio management, for one, which works well to rebalance and more. But it's important to note that this is off the back of an industry that did this well already. In the UK there's a provider than uses social media to track likes of various brands and stocks - and recommend investment portfolios accordingly. Dangerous, maybe, but it does access the trend to trust others' recommendations via social media. The wisdom of crowds - perhaps. Or think of this: technology that allows you to walk through a supermarket, scan a brand barcode and invest on the spot.

In summary, when only three in a hundred people (according to a Harvard study cited) left to their own devices will actually act on a plan, it seems human planners are pretty safe for now. Behaviour finance and decades of experience shows most of us won't act in our own self-interest without a human holding our feet to the fire.

Apple are an investing case study - they launched online stores but because significantly more successful actually selling stuff once they launched a physical store.

Why? Humans trust humans.

Long may it remain. I'm not sure I want to live in a world where a machine can read my emotions, access my deepest hopes and fears and then tell me how to organise my finances as a result.

Quality financial advice? Let the numbers speak for themselves

Will raising education standards really improve the quality of advice in this country?

Yes, no, maybe?

Probably. But let the numbers speak for themselves - read on for why, and how.

Other measures to support professionalism are needed also.

BT's GM Advice Mark Spiers, AMP Director of Channel Services Michael Paff and Infocus MD Rod Bristow landed on a number of other measures that are just as important. One of those other measures includes pre-employment checks across organisations.

In the first concurrent session of Day 2 at the Financial Services Annual Conference some of Australia's most influential executives listened to panellists and debated their contribution.

The topic was "to what degree will raising education standards ensure quality advice and how else can the advice industry drive the journey t professionalism?"

The audience included the heads of some of the country's largest and most professional dealer groups. At least two key advice CEOs were not afraid to put some clear views to the panel.

Q: If the community don't trust the planning profession - but do trust their adviser - what more can we do improve the public standing of the profession - including removing the wrong people? Given raising education standards may take a generation to improve (industry-wide) what else should or could we do now?

Improve the quality of recruits, make standards clearer for the existing advisers in transition - over perhaps three to five years. By 2022 BT modelling suggests the existing force will be up to scratch: all with: tertiary education; biannual certification; meeting financial ethical literacy and meeting annual CPD point requirements - as well as operating in an environment in which their advice is quality checked on an ongoing basis.

Some may be good right now at outing "bad apples" but we all need to be better at it, was the bottom line from panellists.

Q: If professionalism isn't possible without a qualification what of the self-regulatory professional bodies needed to deliver and enforce high standards? Ultimately who is responsible?

An independent, apolitical industry self-regulator body with a disciplinary arm - perhaps along FINRA (US) lines.

Q: Are trails being paid on hybrids? 
No clear answer from the panel but if so, technology at the front line should deliver monitoring that stamps out a practice that's just not okay.

Q: How much self-regulation control should we give up in order to get to better standards?
In part it depends on the outcome of the PJC process. Perhaps a coalition of the willing, providing funding and an independent board could reprint consumers and stkaehodlers in order to get this right - perhaps in as little as a year.

Q: To what extent can the reputation of the advice profession improve without real change - which may take a long time?
Broaden the footprint of advice from the 20% who currently seek, and use, advice to the rest of the community. Get the positive messages out: about what advisers, advice and the organisations behind them contribute to the community, overall social good and the very real and positive impact on people's lives. BT Adviser View, with some 750 advisers and 2,000 pieces of client feedback, allows anyone seeking advice to judge for themselves.

The ultimate answer really comes down to numbers. Whether internally measured Net Promoter Scores, external independent ratings such as Adviser Ratings or the 4.89/5 average adviser quality rating on BT Adviser View, perhaps we can just let consumers be the final judge.

TripAdviser for financial planning consumers?

Yes. In any number of formats, whether by the institutions themselves or (ideally) outsiders like Adviser Ratings.

Perhaps we can just let those who matter most be the judge.