E is for Advice

E was the letter of the day in this session discussing advice as a profession, which was defined by three e's: education, experience and ethics (which probably should be first).

Industry or profession; a quick straw poll showed that all in the room think financial planning should be a profession, but the FPA's Mark Rantall states you can't just call yourself a profession without backing it up, and with 50% free-riders enjoying the benefits of a professional body without signing up.

Mark says he sees financial planning as the second most important profession behind medicine - health first and finances a close and important second. But Brian Bissaker points out though that this is not necessarily recognized by the wider community.

What is the framework that we need to be a profession? It's threefold:

• Professional membership 
• Professional conduct 
• Professional accountability

Greg Medcraft agreed that in developing this (e)Framework we need to strike a balance between self regulation and legislation.

However, the scale of legislative change facing planners is enormous: banning commissions, banning volume rebates, increased education standards and stronger super among others, and while Bissaker believes this legislation will push us (as an industry) toward professionalism, the risk is that the scope and cost involved of all these reforms will make advice more expensive, and put it out of reach for everyday Australians.

Simply put it's all about doing the right thing - that is the hallmark of a profession.

And the goal of all this: give all Australians access to high quality advice.

It's as simple as eee.

For up to the minute news from FSC sessions follow us on Twitter: @carden, @p_cheal, @BlueChip_Comm

BlueChip Communication's Bruce Madden, Carden Calder and Paul Cheal are attending the Financial Services Council annual conference on the Gold Coast. 

Who thinks financial planning should be an industry? Or a profession?

The Financial Planning Association's (FPA) Mark Rantall kicked of his remarks with this question in an afternoon session at this week's Financial Services Council Conference.

Session attendees unanimously agreed it's a profession we're after, not a "financial planning industry".

Second only to medicine, said Rantall, is the importance of a strong financial planning profession. If you have your health, and your finances in order, you're in good shape he reasoned.

Key elements of a profession, says Rantall, include professional membership, rules around conduct, and accountability. On that note, from 2013 entry standards to the FPA will step up another notch.

Proof points supporting higher standards in these areas include the fact that recent research showed higher ethical reasoning among CFPs than other advisers.

Build it and they will come? Having built the framework for a profession, Rantall believes they (being planners) will come.

Rantall was clear on this: the FPA is, and will remain, the central professional body for financial advisers.

Colonial First State CEO Brian Bissaker focused on policy settings. The key reforms he reminded attendees of included:

- Increased fiduciary duty

- Ban on commissions and volume rebates

- Ban on soft dollar remuneration

- Increased training and minimum standards

- Increased ethical requirements

- Scaled advice changes

- Stronger Super

- New accountants licensing regime

A long and hard road but a journey worth taking, says Bissaker. In the heat of the debates Bissaker is concerned the totality of change might be missed. In particular he called out opt-in as being potentially a bridge too far at a time of great overall change in financial services.

Bissaker railed against government setting pricing mechanisms for planning, or any other professional service.

Community standards are increasing said Bissaker, and the risk of reputational damage looms large as a result.

Adviser versus adviser columns in media are not helpful he says. A more professional tone would be appropriate - suggesting advisers think about the greater good (overall reputation) and leave adversarial approaches in media at the door.

The end of the journey, according to Bissaker, will be when all universities offer financial planning degrees as part of their commerce faculty.

For up to the minute news from FSC sessions follow us on twitter: @carden @p_cheal @BlueChip_Comm

BlueChip Communication Group's Paul Cheal, Bruce Madden and Carden Calder are attending the Financial Services Council annual conference on the Gold Coast

Connecting our people with customers' experiences

Hearing Joe Jordan today reminded me that good content, delivered well can make ANYthing interesting. Even life insurance. Really.

Yes, Australia is one of the most underinsured nations on the planet - ranking 16th in the world for life insurance penetration and density. 

Because, Joe suggests, people have dogged, ill-informed views of what insurance actually does - or doesn't do.

And we are wrong to focus on the facts, rather than the emotions around insurance.

Buying insurance is more than a numbers game - yes, the odds are you'll never need it. But the reason we want insurance is there's still a chance something will happen...and you have no safety net.

We've spent too much time, in financial services, on the analytics says Joe. What we haven't spent enough time on is understanding how consumers think. Accept this, says Joe...

1. The way people make financial decisions has not changed

2. The way we perceive how people make decisions has changed

3. Expectations matter....perhaps more than actual outcomes.

As we move from accumulation phase to distribution phase, it's reliability of income not return on investment that will matter far more to consumers.

What do we (as consumers) really care about? Well as time goes on, and our population ages and lives longer, investment return matters far less than having an absolutely certain income.

As an insurer Joe says what MetLife does is simply this: help people have certainty around their income. That may be by replacing it if they die or guaranteeing it if they are sick.

Stay away from the facts in the insurance sales process, says Joe. 

Counterintuitive as that sounds, his research shows that finding out people's personal priorities is far more important than presenting rationale, fact based information showing the lump sum amount a policy may deliver. He presents a great case for actually never talking about the 'face' amount of a policy, but rather the income it will deliver, and at what cost.

Having voiced our personal priorities (looking after our family, paying off the mortgage, allowing an income for life if we couldn't work) we are far more able to estimate what we really need from our insurance...as an income stream, not as a lump sum. 

Few, if any of us, can actually estimate the lump sum we really need.

So, says Joe, if you're going to sell protection products you have to develop a culture that's supportive of understanding people's real needs.

A culture where people are inspired by the great good that comes from insurance...and that passion will translate to better business results.

The simple purpose of insurance is to have the money outlive the people. 

Culture should celebrate the impact these products can have on someone else. Everyone wants to celebrate the significance of what they do. And the significance of what life cover can do is literally life changing.

Focus your own people on that, and the business results should follow.

We saw a MetLife staffer via video crying about her client - the client she sold a policy to, then stayed the course while her client was diagnosed with cancer and ultimately passed away. The insurance payout enabled the client to die the way she wanted to - well cared for, having returned to her family in China and knowing that money wasn't a problem.

It's rare (apologies John Brogden - it's a great gig, just not life changing) for me to feel inspired, and to be almost bought to tears, at an FSC conference. But Joe got me.

Carden Calder attended the Financial Services Council annual conference on behalf of BlueChip Communication Group.

Financial Services Council (FSC) Conference Day 1

BlueChip Communication's Paul Cheal, Bruce Madden and Carden Calder are attending the 2011 FSC Conference on the Gold Coast.

First up at the FSC were Chair Peter Maher, Minister Bill Shorten and new ASIC head honcho Greg Medcraft.

Minister Shorten offered to do "the standard" 20 minutes from Government to industry but instead (and really much more interesting) gave a free ranging talk that started with monks and ended in a jungle...covering opt-in, competition in super and the timing of draft FoFA legislation (September) in between.

Medcraft, just 82 days into the job, talked about how running ASIC is just like running a bank. Give accountability, hold accountable but don't micromanage. It sounds like an approach he'll apply both to the team at ASIC and those he's charged with regulating.

As a former local mayor - of both Box Hill and Woollahra, he knows a thing or two about making change. Having had a foot in each end of the social economic spectrum he's perhaps better placed than many to understand the needs of individuals and the perspective of executives.

Make the pie bigger, Medcraft says of the debates around financial advice.

Instead of one in five Australians seeking financial advice, it should perhaps be more like one in two.

Bickering about whether or not advice is needed isn't helpful, said our newest regulator.

What is needed? Confidence and improved access to advice. Fair and efficient markets.

The end goal, according to Medcraft, is confident, informed investors and financial consumers. Yes, education matters but so too does personal responsibility.

On a personal note he mentioned the frustration, as an individual investor with BoA Merrill Lynch, of placing his investments with them and not being able to have a single view online.

On how to get the biggest band for regulator buck Medcraft talked about aiming to proactively reach every single company ASIC regulates over a number of years - and reactively those where there is due cause for concern.

What will we see next from ASIC? The results of surveillance of each of the top ten businesses giving financial advice.

And on a personal note? New York rather than either Sydney or Melbourne. And favourite five for a dinner party? Nelson Mandela, Leonarda Da Vinci (at least that's how I heard it), Robin Williams. Barack Obama, Warren Buffett.

Day 1 at the FSC: leaders talk challenge & opportunity

A guest post by BlueChip senior Paul Cheal attending the Financial Services Council annual conference.

Day 1 of the FSC out with a relaxed "chinwag" with some of the industry's leaders discussing the challenges and opportunities facing the industry.

From the Insurance industry was Jim Minto of TAL who was joined by John Van Der Wielen of ANZ and fund manager SSGI's Rob Goodlad.

The group kicked talking about regulation, which according to 3/4 of 200 respondents to a delegate survey was singled out as the greatest challenge in the last 18 months.

The panel agreed that while legislation will 'be what it will be', the response should be forward looking - adapting and getting ready to move fast once details are finalized.

Picking up on Minister Shorten's comment that we (as an industry) do tend to talk to ourselves, the speakers identified "consumer-centricity" as a key driver of growth - understanding the consumer, giving them confidence. It's not the process, It's the outcome, speakers suggested. The winners will be the ones who become more consumer centric and adapt to new technologies to interact directly with clients.

According to the delegate survey the opportunities ahead will arise from growth and consolidation. For insurance that opportunity was the issue of underinsurance, for ANZ it was not about predicting the future but being across all distribution channels while State Street saw ETFs as the great democratization product for all investors, especially for SMSFs.

In Navigating this Change (the theme of the conference) the capabilities organisations will need are:
- Lower costs - especially in Super
- Operation efficiency
- Organization memory
- Adapting to new technology to deliver solutions to consumers

The conclusion ? The salad days are over. The days of flash cars in the Macquarie carpark are apparently over. There will be more consolidation, increased pressure on fees and redundancies.

On that sobering note it's off for cocktails.

New financial crisis? "What NOT to do" public relations rules hold true

As Australia reaches the end of the first month of the 2012 financial year, we're feeling the shudders of global financial uncertainty. The US debt challenges appear handled, for now....but who knows what's around the corner?

Uncertainty, for leaders and communicators, makes it far more challenging to set, and communicate, a course. Where do you lead people "to" when the landscape is unknown and only "where we're coming from" is known?

Often the answer is nowhere. In 2007, 2008 and into 2009 some leaders and communicators were frozen into immobility by the (sometimes overwhelming) dangers presented to their businesses by global financial instability.

Yet those who came through best were often those who, despite uncertainty, took careful stock of the known and the unknown. Then acted.

Some leaders led when it was most needed. Some communicators communicated superbly - proactively, and with a strong sense of their duty of care to investors, clients, and the people working for their company.

It's those leaders whose actions are worth reflecting on now as we face another "interesting time".

Knowing what to do is hard - but what NOT to do was clearly evident.

Once Lehmann declared bankruptcy at the end of 2007, Australia's blithe "we're okay Jack" approach to our role in the world economy was somewhat dented.

When I flew into New York at the time of Lehmann's collapse, it was clear that most business people in Australia believed we would never feel any impact. Two short months later, we watched seasoned finance executives go grey almost overnight as all the rules were changed.

Few knew what to do - how to manage a crisis and how to communicate during one.

It's worth revisiting here some of the lessons we learned for communicating in a crisis.

It's all very well to  know how to communicate in a crisis that involves just one organisation, group of organisations or an industry sector. But the ultimate crisis communication lessons surely have come from the days when it looked like much more was at stake.

Here are our top ten things NOT to do.


1. Say nothing
2. Be overly optimistic or "catastrophise"
3. Make promises you can’t keep
4. Imply you know what’s going to happen now
5. Ignore technology such as webcasts, email, Skype or your website
6. Fail to educate your client with what you do know, as soon as you know it
7. Provide only complex information full of disclaimers
8. Fail to respect the intelligence of your audience
9. Self-justify
10. Understand how your audiences feel


Next post, what TO do.

News...morally bankrupt or giving us what we want?

How quickly, fueled by genuinee public outrage, and years of restrained bile, media can turn.

In this case, on itself.

It raises a bigger question than the obvious one of media ethics.

There's a very good reason for the media furore. And it's not phone tapping.

News of the World, and possibly other News Limited titles, intervening in the private lives of grieving people was simply the thread that unravelled the whole ball of yarn...and led to this particular tangle.

The British public are rightly outraged at the notion of media, or anyone, inserting themselves into the investigation of a child's death - and them profiting from such morally bankrupt activity.

But really haven't the media just been giving us what we, the avaricious public, been consuming on demand and gravitating towards by reading ever more salacious details of other people's lives? I'm thinking maybe the whole ball of yarn here has as much to do with media consumers as media malpractice.

There is no justification in my mind for the actions of media party to this behaviour.

But where's the line? And what part do we, the public, play?

I'm speaking here as a media consumer, not as a PR person. As a PR person I tend to think decent journalists have a hard time of it as they set out to do a very worthy job. As a PR person I also strongly believe both media and PRs should work in ethics-driven cultures, and be under scrutiny - nothing beats sunlight to help encourage good behaviour.

Possibly since journalism (and PR) began we've all been reading, hearing and watching and probably will continue to, news that's delivered via foul means as well as fair.

It's just that rarely do we lift the bonnet to see how the engine runs. Because all we care about is whether or not the car gets us from point A to point B in the style we want to travel.

High brow economics commentary? Page three girls? Perhaps a dodgy used car sales person running from the cameras? Or perhaps your taste runs more to celebrity weight loss/infidelity/surgery stories. Or to civilian deaths in another country's conflict.

We've all become, to some extent, voyeurs entertained or informed at some cost to others - whether that cost is their dignity, their safety or simply their right to suffer unseen.

I have no moral ground to stand on here. I read newspapers, listen to radio, read online news and occasionally read 'one of those' magazines while waiting for something better to happen or avoiding my email.

That makes me too complicit in the decline of media standards. Some media would argue that my profession does also...but that's a debate for another day.

If one lasting and fundamental good could come from this 'you wouldn't read about it' saga, it may simply be this: that media are more accountable.

For the most part the many journalists I've worked with, sometimes at cross purposes to, and alongside, are exceptional people.

For often average incomes they work, day after day, to report news that people should know. That's news that is in the public interest. It's news that holds people, governments and businesses accountable. And it's news that sometimes changes the world.

For that ridiculously important task many get little more than a byline or story credit. Very often the money and professional opportunity doesn't adequately cover the grief that goes withnthe job. There is however, for those journalists, the great satisfaction of knowing they really did make a difference.

It's just a shame that media organisations, guided by the scandal and sauce-loving public, have increasingly rewarded another kind of journalist and photographer - and apparently private eye.

That's the kind who really does only care about money and ego.

But they will, sadly, continue to be rewarded by the average reader. Because actually, until now, we really didn't want to think too hard about where our 'news' was coming from or how it was sourced.

In my private nirvana, news consumers and those who serve them, would actually want to know about the kind of ethics and behaviour that generated the headlines.

It's happened with clothing, chocolate and coffee. Maybe one day we'll read news that comes with a "free trade" or "ethical" label. If no-ones rights were infringed, it's okay to read. If so, straight to the bin.

Yes, that's fantasy land. Because media, and many others do believe the means justifies the ends.

But should we all be a bit more careful about that kind of thinking?

Sometimes nothing justifies the ends. Sometimes the means in itself is so wrong that it represents the slippery slide to an ethical wilderness. Once lost, we might never emerge to see the greater good, or innthis case, the public interest.