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.

Retirement incomes: are we lazy because we're already good?

Attending the Financial Services Council Annual Conference for the next two days, it strikes me we're way undercooked on the retirement income discussion nationally. 

It was pretty predictable we'd end up here, soon. 

"Here", of course, is with people taking more money out of super than is going in. AKA decumulation. But relative to the size and importance of the issue have we really done it justice, with enough lead time, as an industry?

Vanguard's Rodney Comegys, when pushed on the panel, said "Yes" perhaps Australia it's exactly because Australia is good at retirement income saving as a nation, that we're not particularly engaged as individuals. Either as potential retirees or industry participants thinking about the future. 

Somewhat surprisingly, in answer to "should we move to 15%?" Dr. Michael Keating says no.

In fact 12% could even be too much cites Keating. As one of the founders of the super system he's worth listening to. Accumulation is working well, he says. It's the decumulation piece that's now the priority. Perhaps not surprising given we've only just reached a tipping point.

Are we, as nation, able to innovate retirement income product well enough yet? Always room to improve was the diplomatic answer from Vanguard. A 'layer' of different options is needed. Once upon a time you retired with a single fund. You chose the asset mix based on your own views about investing or that advised by an advisor. Now it's not that simple, so alternatives that provide for a range of contingencies might be smarter - funds of different types, combined, perhaps, with deferred annuities, longevity insurance, mandatory payout funds - and of course a well defined spending policy that doesn't have to radically adjust to differing investment returns but where there is some flexibility to dial up and oddness based on changing circumstances. 

Oh and one more thing? Good advice. Very possibly from a super fund.

When should planning for all this start? Our 30s and 40s. 

A side note: while I agree, I'm also probably about 1% of the population. Where that leaves everyone else, particularly the less well off, is frightening.

How much is enough? About 70-80% of your pre-retirement income. But plan for the very good and very bad events that might alter that number.

Finally, what about a death tax on unconsumed super? Fighting my extreme ire I managed to write it down. But seriously - do we really need another way to encourage people NOT to save?

How many businesses could you start this week?

This week, as we celebrate and encourage women entrepreneurs in honour of Women's Entrepreneurship Day last November 19, I have to stop and remind myself what it was like to have very little.

In 1988 I left home aged 17 with about $35.

I quickly learned if I didn’t manage my money I couldn’t eat, get transport or buy the textbooks I needed that would ultimately help me work my way out of my week-to-week existence.

Fast forward 25 years and I can reflect on how fortunate I was to have access to loans.

Access to a small amount of money can go a long way to changing the future of a woman’s life. For the women Opportunity International Australia assists it can be a matter of life or death for them and their families. A loan of $100 can help them create a more secure future for their children.

As a 17-year-old, I still had options. And in hindsight I was pretty fortunate – I was able to get paid well enough in my part-time jobs, access temporary student loans to make ends meet when it got ugly, and graduate earning enough (in time) to repay my uni fees. Which I did, promptly.

Where would I have been without those student loans? Arguably not where I am now – in a position to give back to younger women, or to causes such as microfinance.

A passionate believer in the idea of helping women work their way out of poverty.

People who struggle financially are more likely to be women. The United Nations Development Program evidence is compelling:

“Many of the world's poorest people are women who must, as the primary family caretakers and producers of food, shoulder the burden of tilling land, grinding grain, carrying water and cooking... Yet some 75 percent of the world's women cannot get bank loans because they have unpaid or insecure jobs and are not entitled to property ownership… When women have equal access to education, and go on to participate fully in business and economic decision-making, they are a key driving force against poverty.”

These comments are backed up by Opportunity’s track record. It shows women who are given microfinance loans go on to repay those loans then re-invest their earnings in ways that help break the inter-generational poverty cycle – educating their children, accessing healthcare and creating jobs for women and men.

BlueChip Communication, the business I own, donates about 2.5% of our billable time (and potential revenue) to help Opportunity International Australia.

We do this because, as a mostly-female business, and as business people in the finance sector, we can see what a game-changer just little amounts of money – hundreds of dollars – can be. Living and working in Sydney, it’s easy to forget what the rest of the world looks like. Our reality is so very different to that of Opportunity’s clients.

Australia’s top 1 per cent of earners take home around an average of just under $400,000 a year. For argument’s sake, let’s assume this average is representative and that ALL of the 180,000 top 1% in Australia earn $400,000 per annum. Let’s also assume everyone earning that much money in our country donated just 1% of their income. (For simplicity, we will say they don’t right now). The resulting pool of funds would be $720 million.

The income alone (if it was invested in fixed income say at 5.5%) would be $39.6 million a year. That’s a lot of small loans – around 396,000 of $100 loans a year!

In four years, Australia’s top 1% of income earners could help more than a million women borrow, work and earn their way out of poverty.

As a business owner, mother and Opportunity supporter it makes good commercial sense to me. This Women's Entrepreneurship Day, what could your 1% of time or money achieve?

Help a woman like Seema start a business today.

This post was first published on the Opportunity International Australia website.

Leadership communication: three things about all great conference presentations

Attending the Association of Superannuation Funds of Australia (ASFA) 2014 with 1899 other delegates from the financial services industry, I was struck by a few realisations yesterday. 


Realisation 1: How unusual it is to have an all-female keynote or plenary line-up on Day One

Realisation 2: Truly great keynote speeches all have the same ingredients

Realisation 3: The more information we are faced with, the more meaningless it becomes

These things may not sound like blinding insights, but they do point to some important lessons for wanna-be conference speakers, or those of us who speak regularly but sometimes fall into the trap of telling people what we know, instead of something the audience might actually find both useful and entertaining.

And make no mistake, whether you're an actuary, asset management PhD or Australian of the Year, you need to be both useful AND entertaining. That's the bit in points two and three about using narrative techniques that work well for you and your audience - regardless of the topic.  

If you disagree, think for one minute about a well-known Superannuation Board member and former Central Banker who is like a human sleeping pill. Incredibly capable, a national treasure, well respected and yet induces narcolepsy in even the most well-caffeinated of audiences.

Due credit to ASFA for putting together a diverse Day One speaker line-up, all of whom met the "useful and entertaining" test. Due credit also for having a Day One line-up where Rosemary Vilgan and Ita Buttrose were the Day One opening Plenary speakers. Both are exceptional leaders, with an informed view and much value to offer the audience. Both are also women - but it's rare (and laudable) to see two women keynoting.  

Here is the anatomy of what each speaker did, to varying degrees of success.

First: know thy audience

Ita Buttrose and Mark Bouris are paid keynote speakers, household names and leaders in their field. If it's good enough for them to study their audience, in this case superannuation industry leaders, and work hard to connect with us, it's good enough for you and I. 

I am humbled by how much work good professional speakers do to make sure they know who they are talking to and how to relate their story to those people. Ita Buttrose did not make the mistake of turning up and saying what she always says - she (or a speech writer) thought about what would resonate with us as well as serve her own purposes (promoting the cause of dementia and Alzheimer’s' disease).

It's this process of sitting in the audience's shoes, and thinking deeply about our own agenda form their perspective, that humbles us, makes for a generous presentation and help us connect with people who give time and attention to us.

Second: know your "why"

Listening to Russell Investment's indomitable Don Ezra was a delight. And that's despite the fact that I am not a 60+ year old semi-retired investment guru. Don was so passionate and warm in his delivery that he infected me with his own enthusiasm for a better way to think and behave about income in retirement. 

I'm not sure this was always his spiel, but he sounds like a man fired up on behalf of a large and growing group of people - of whom he is one, but also on whom he is a subject matter expert. 

Don is an investment strategist, now semi-retired but also, it seems to me, in the happy place of having arrived at a moment in time during which his work is both a higher purpose and source of income. Perhaps it was always this way for Don. Or perhaps he's worked hard to reach the destination.

Either way, all truly great speakers (Buttrose and Bouris included) are clear about what they care deeply about - and able to infect us with their own passion as a result.

Rosemary Vilgan had a lot more content to impart but also was crystal clear about what matters most - and that's the best possible outcome for Australians who are retired, delivered by a super system that needs to evolve. It's clearly something she cares deeply about, as should we all if we are to work in financial services.

Third: keep it as simple as you can

We all "know" that this is the age of information overload. But do we really use that when we sit down to prepare a conference presentation? Mmmm not often enough if my years of conference attendance are anything to go by.

From an evolutionary biology point of view we are the equivalent of slightly evolved apes staring, confused and aghast, into the matrix. That's sounds a bit harsh, but Google "information overload" and "evolutionary biology", or "behavioural finance choice" and you'll see what I mean. 

The short version is this:

- We live in an age where the amount of information available to us has outstripped our ability to process it

- Most of us living and working in an urban environment experience some level of overload

- The more information we are presented with (or allow in) the less helpful it becomes - and our ability to make good decisions drops accordingly

So what does that mean if you're a conference speaker? You probably consistently over-estimate your audience's ability to absorb what you are saying. And your own ability to make it simple enough to be useful.

In short, the more time invested up front making our subject matter expertise accessible, the better. 

Matt Church (an expert on Thought Leadership) gets this, so I'm very much looking forward to his session on Friday. 

Perhaps that should be compulsory viewing for more conference speakers.

Bouris, Buttrose, Ezra and Vilgan kept it at the right level - there was well thought through content, but there were also clear themes even the most overloaded brain could follow.

There's much more to truly great speaking that three ingredients. That said, even just getting these right is an act of generousity towards our audiences.

Isn't that what leadership and leadership communication is all about - serving our audience, not just ourselves?

Building better financial planners: what we can learn from crowdsourcing GPs

In 2012, news from the Medical Journal of Australia (MJA) was that a medical study suggested 57% of adult Australians were receiving “appropriate” (read ‘good enough’) GP care. That left a whopping 43% in the sample group of more than 1,000 who did not receive “appropriate care”.

Sound familiar? Reminds me of a recent ASIC report and media announcement about life insurance. While there are key differences (churn of life cover for commission perhaps) there are enough similarities to think more broadly about what might be most helpful to advisers who want to do the best by their clients – which most do.

Medicos and crowdsourcing

Consider this:

• GPs are among some of the most overburdened in our health care system
• They have limited time and resources to see, diagnose and treat thousands of diverse conditions
• They’re not God. And we’re unreasonable if we expect them to be.

So how does a busy GP ensure (i.e. be certain or near enough) they’re doing better than getting it right half the time? They use a MJA “wiki” – a social, collaborative tool a la “Wikipedia”. Overseen by experts, it is intended to provide a “dynamic, centralised and inclusive platform — openly available to all to contribute to and use — that will help empower clinicians to deliver the best care”.

This is a huge leap for medical practitioners, who had been (and often still are) complaining about their patients’ propensity to resort to “Google Doctor”, while at the same time, on occasion, being well behind the eight ball when faced with an intelligent, curious and well researched (read, Google-doctored) patient.

Which brings us to the question: if this approach is good enough for medicos, why isn’t it good enough for our banks, insurers, wealth advisers, financial planners, credit card companies and financial services providers as they serve us on our own personal journeys towards better financial futures?

Here are a few key lines from the 2012 MJA abstract covering the study, which was designed to measure how well we deliver “appropriate care” to patients in Australia (doi: 10.5694/mja12.10510). Change the aim of “appropriate” or “recommended” care to “appropriate” or “quality” advice and its applicability to financial planners and others in the wealth industry is immediately apparent.

1. “The researchers were aiming to reproduce a landmark 2003 study that found that only 55% of patients in the United States received “recommended care”…findings are essentially the same — that almost half of patients are not receiving appropriate care….
2. “…challenge that practitioners regularly face — how to access reliable, updated and credible information about appropriate care, and how to make clinical decisions in the absence of this information.
3. “…Runciman et al suggest a way to achieve national agreement on clinical standards…we (the MJA) are already working with the Cancer Council Australia to deliver a “wiki” guideline tool on our website … a dynamic, centralised and inclusive platform — openly available to all to contribute to and use — that will help empower clinicians to deliver the best care.”

We can’t reasonably expect our GPs to be God, or even close to omnipotent, but we can expect that when such a tool exists, they can use it to improve their diagnoses and treatment plans.

Still wondering about social media in financial services?

How long before such a wiki helps financial planners, and their clients, arrive at better decisions about long term financial planning? Or helps you make better decisions about the cheapest and best credit card? Or when to flick the mortgage provider and change banks? Choose a super fund? Or how to really cost the services the bank provides?

Hopefully such solutions will be made possible by joint industry efforts, collaborating with consumers, to develop social tools that give us all access to better financial decisions.

It would seem that whether we seek to be healthier, wealthier or wiser, the long-predicted democratisation of information through social media is now a reality.

This blog is an edited and updated version of a blog first published on 16 July 2012 on cardencalder.com.

The two best things you can do to improve your marketing results

I admit it. It's true. I've spent as much time as any marketer justifying my role. And often I've thought less than kindly of sales... those people who just wants tactical marketing guff and don't "get" the bigger picture about brand, reputation and marketing. 

This was probably particularly true when when I worked inside a certain company (we'll call them Big Consumer Finance Brand A), and in my time early on as a consultant advising another firm (we'll call them Asset Management Brand B).

Of course these days that just doesn't wash. I was converted from a "marketing is good, sales is bad" view shortly after the commercial realities of running my own business hit me, hard. I found myself doing both sales and marketing. And I developed a new, healthier respect for salespeople. They, of course, are where the money that pays us all comes from. And as a marketing consultant I now understand that people who actually talk to customers or clients (sales and service roles) usually know a lot more than the marketers do about customers, and potential customers. 

But my respect for their marketing nous probably hasn't shifted quite as far. 

Turns out that's actually my fault.

My experience is this: marketers often do see the big picture a bit better - how marketing might connect to strategy and help sales by delivering quality leads, more enthusiastic prospects or better informed customers. But not always do they (and I mean "me") invest the time to make sure they really understand the depth of customer and prospect knowledge that sits inside many salespeople's heads. Nor do they (we!) always then engage sales in a truly collaborative marketing (or content marketing) process that brings the best of both capabilities to the table to solve the problem we're both paid to solve: attract more customers, at a lower cost and keep them. 

What's the first thing you can do to improve your marketing results?

The first thing many financial services marketers can do to improve their results is to help their colleagues in sales see the value of content, and content marketing. 

What sales person doesn't want it to be easier to convert prospects? What sales person doesn't want a buyer who is more ready to buy? What sales person doesn't want a better success rate?

Back when I was inside Big Consumer Finance Brand A, and advising Asset Management Brand B, I worked with marketing to build stuff and throw it over the metaphorical fence to sales.

Did it work? Did the sales teams use it? Not sure. Probably not.

Why? Because I didn't go about creating content or marketing communication the right way.

The right way would have been to help sales see how honest, transparent and high quality content, served the right way, can make their life easier.

The right way would have been to take them on a journey: ask for their engagement upfront, understand their challenges and then use their very own content (outbound emails, calls and meeting content) to create marketing that worked far better.

That's marketing that educates prospects before they get a call or sales visit, marketing that answers the logical questions potential customers want answered, and marketing that's so good our customers would pay for it.

What's the second thing you can do to improve your marketing results?

The second thing we can do to improve our marketing results is take the time to explain to the leadership, sales and marketing teams why we need content marketing or integrated marketing.

The path to digital and marketing greatness is steep and sometimes far too tricky. It can't be navigated without leadership and employee buy-in. 

A good place to start is by having one-on-one conversations with what I call "the conversion pack". I have one of those now, and it takes most decision-makers from "skeptical" to "ready to go" in about 12 slides. 

Another starting point is a company workshop -  explaining WHY we need content marketing but starting by asking about the challenges sales and marketing folk face right now in their jobs. 

Many of those problems can be addressed through better collaboration, which in turn delivers high quality marketing because it's real - informed by what the people closest to customers see.

Yes, it all sounds too easy. And in practice these two things to improve our marketing results are not that easy to actually do. 

But they're worth it. 

Because soon, as digital marketing and the dominance of search is accepted by leadership teams, we'll be forced to collaborate better because our wealth management, insurance, fund manager or banking colleagues will be doing it better and beating us in the market.

Former PM Julia Gillard's three lessons for women in leadership

Gender, leadership, communication lessons relevant to financial services

One thing no one can take from Julia Gillard is that she was Australia's first female Prime Minister.

And as such, political and personal views aside, there's a lot to learn from her tenure - how it was portrayed, how she and her team handled perceptions, and how gender plays a role in our view of leadership. 

In person, at this morning's Business Chicks Breakfast Julia Gillard was warm, personable and funny. In the media as PM she was more often portrayed as cold, disloyal and ineffective as a leader.
There are also simple lessons for women in leadership that have little to do with gender - about how to do well once in the top job.

So what can we take from this as marketing and corporate affairs people, women in financial services, or as those with an interest in leadership?

Lesson one: ignore the whisper of gender stereotypes

Gender does matter, for starters, it's clear that almost universally our notions of leadership are gendered. Whether we are female or male, the most educated of us in business judge women leaders harshly for displaying the kind of traits we laud in men. We might not like hearing that but reams of research over several decades back up the finding. The Columbia Research is just the latest in a long string of empirical evidence supporting this. The research shows we are pre-programmed to judge women more harshly. Question that. Hard.

Lesson two: make time for the "important" not just the "urgent"

Secondly, making time to think in a schedule of "busy and urgent" days and weeks is critical to success. Gillard says she always made time for this. But upon reflection, she'd carve out even more time for the "important" versus the "urgent". Being an ever-busy people pleaser isn't going to help any of us steer a sound long term course of action.

Lesson three: be women who support other women

Gillard makes the point that Keating got to be judged on his merits, despite the manner of ascension to Prime Minister. Did our first female Prime Minister get the same opportunity? Even feminists condemned Gillard for the leadership spill, and it went on to define her term, her place in history and in many women's hearts and minds.

The problem with bias is that while we can sometimes (just) see other people's faults but often not our own. Good leadership starts with realism - about how we all see the world, about how female leaders are portrayed and what we all need to do in response to "what is" rather than what we'd like to be. 

Gillard admits she maybe underestimated a few things along the way - Australian's perceptions of her and female leaders included. She's not alone. From Germany's Angela Merkel (pilloried in her own press for her appearance) to FaceBook's Sheryl Sandberg (who admits her own bias) we're challenged to get this right.

That's not an excuse to not turn our face away, to ignore the issues or to accept the status quo.

As leaders we do have to accept reality. Leadership also about striving to improve it. So let's keep the conversation going: about female leaders, how they are portrayed and what role our communication about them should, and can play.

I attended this morning's Business Chicks breakfast as a guest of CBA.