CAIRNS AFA CONFERENCE - GREAT ADVICE FOR MORE AUSTRALIANS...........
This year’s AFA Conference was held in the Conference Centre in Cairns, Queensland from Sunday 11th October until Tuesday 13th with the above caption as the underlying theme, supported by the calls to action to "Innovate, Think, Create, Act". The three days were stimulating and informative, and provided a contemporary overview of the state of the Australian advisory industry.
Cairns is undoubtedly a spectacular tropical location, but a few delegates questioned the wisdom of staging a Conference there, and it became obvious that, although there were 700 registered attendees, a number of product provider and dealer group CEs were conspicuous by their absence. One delegate suggested that it was like having an IFA or PAA Conference in the Bay of Islands - a nice location, but too far away to expect an optimum turn out, particularly from senior management.
First impressions centred on the co-operation initiated between the AFA and some key politicians; the spirit of collaboration among a diverse range of financial advisers; and the quality of the speakers.
The initial session on Sunday morning set the scene and considered issues such as longevity risk in retirement, the state of the ‘advice market’, regulations, and adviser competency and education. The introductory morning was, like the rest of the conference, characterised by a broad underlying tone which was positive, constructive, and supportive.
That’s not to say that all in the Australian industry is plain sailing. The recent ASIC review of risk advice was raised and the results are clearly taken seriously by the AFA. But with some concerns expressed regarding research methodology (sound familiar??), the statistical validity of the research may be somewhat suspect. Nevertheless, the message was not lost on the AFA Executive, nor indeed on the Shadow Finance Minister, Chris Bowen.
In the regulatory space, the Future of Financial Advice (FoFA) initiative is in its final stages of clearing Senate in Canberra and will likely be a reality by the end of October. There is no doubt that financial advisers in Australia face a more complex and challenging regime than their counterparts in NZ.
However, I was impressed by their willingness to accept those challenges, develop constructive responses which lift the standards of competency and skill, and face the future with all the optimism and enthusiasm necessary.
Very much like the same fortitude which has characterised most NZ advisers response to their regulatory and legislative challenges.
There is a further report in course of preparation due out in November, the Financial Service Industry review (FSI) which appears to be more wide-ranging than just the advice space, and which also includes adviser capability, vertical integration (product providers ownership of distribution groups, and disclosure thereof), and that crusty old favourite – underinsurance.
So in the regulatory space, our Australian colleagues are not lacking input from regulators and government officials – both at State and Federal level.
The previous reference to politician contact saw the Shadow Finance Minister, Chris Bowen, make a speech which came across as supportive and encouraging, then left the forum to give a TV interview when he declared that the Opposition, if re-elected, would review the FoFA exemption for consideration of commissions on life insurance policies. While stopping some way short of declaring an intention to ban commissions, there is no doubt that the Opposition are looking very closely at the issue.
One of the more obvious aspects of the AFA's response is the commitment to ongoing enhancement of adviser education and competency. Constantly lifting these standards is widely regarded as the appropriate course of action to improve professionalism, and, ultimately, earning an appropriate tertiary qualification will be regarded as the mandatory minimum standard to enter the financial advice industry.
A number of the speakers, not surprisingly, made reference to client management, and sought to emphasise achieving defined outcomes for clients, rather than getting caught up in a portfolio performance debate.
The issue of Behavioural Finance was raised on a number of occasions, and there is clear evidence that the management of client behaviour – as well as the technical aspects of portfolio management – is emerging as an integral piece of the best practice jig-saw.
ANZ Wealth, TAL (formerly Tower) and Asteron were among the major sponsors of the Conference, and their generous hospitality was in evidence.
Speakers included a range of industry figures, Jordan Hawke (Asteron), Graham Rich (Portfolio Construction), Geoff Ross (42 Under), Chris Bowen (MP and Shadow Treasurer), and Andrew Demetriu (Former CEO AFL).
Overall, the lasting impression of optimism and encouragement was predominant, but with the usual caveats around regulatory/compliance awareness, educational progress and development, and client management issues that confront all advisers everywhere.
It was certainly good to catch up with expat Kiwis Graham Rich and Stephen Karasch, and also to make a load of new contacts, friends, and colleagues.
It's often said that Australia puts on a good show with events like this and that was certainly true in this case. However, Kiwis also know a thing or two about the subject and the announcement of a co-hosted IFA/PAA Conference, had one or two AFA delegates I spoke with, envious of the progress NZ has achieved in this space. The Australian FPA has refused to join with the IFA, and the existence of two separate advisor bodies may well serve to dilute the efforts, impact, and advocacy of both. Of course, the relationship between the two NZ associations probably still has some upside development potential, but the announcement certainly suggests that a positive start has been made.
As for Australia and AFA Cairns Conference, it seems to me that the Association is in good heart, with a healthy mix of youngsters starting their careers, and a few silver-tops adding their experience and wisdom to the event.
There are undoubtedly regulatory and, it would seem, political challenges ahead, but if the spirit of optimism displayed in abundance at the Conference is anything to go by, the advisory industry is well-equipped to join the fray.