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Podcast Transcript

Episode 43, Season 1

Bernie Ripoll and the "new" future of financial advice


Bernie Ripoll: [00:00] Well if you’re a young person, and you’re looking at this sector, the first thing I’d say to you is there’s an enormous opportunity, and there’s never been a bigger opportunity, but the profession is at a fork in the road where there’s a much a higher standard being built in that’s there right now, but education levels, so young people going to university or wanting to start...

Fraser Jack: [00:27] Hello and welcome to the Goals Based Advice Podcast, where I’ve conversations with pioneers of the new world of financial advice. I’m your host Fraser Jack, and I want to thank you so much for tuning in today. If you’re enjoying this podcast please help me spread the word and share it with your friends and colleagues, and I’d also like to thank our supporting partner, Advice Intelligence, powering this podcast.

Fraser Jack: [00:48] In this episode I chat with the honorable Bernie Ripoll. Now, after 18 years in politics, his passion for financial services, and more specifically his passion for helping consumers of financial services, Bernie is now heavily involved in this sector and has a positive outlook for the new future of financial services. He’s also a fellow lover of technology and knows how advice tech can play a part in better advice relationships.

Fraser Jack: [01:15] Bernie is a good sport and was happy for me to give him a friendly ribbing about the recent election, as you do, and took it all in the good spirits. Let’s jump into my chat now with the honorable Bernie Ripple.

Fraser Jack: [01:30] Welcome to the show, Bernie.

Bernie Ripoll: [01:31] Pleasure to be here, thank you.

Fraser Jack: [01:33] Now I’d thought you’ve obviously had a history in politics, but some people from overseas may not know who you are. Try to give us a bit of an overview, you’ve spent some time in our political system here in Australia.

Bernie Ripoll: [01:46] Yeah, sure, so my name is Bernie Ripoll, I’ve got an official title, I’m called The Honorable. It’s when you make it to the executive in government you can confer the title, and it’s really lovely, and nice, but let’s just say you can’t trade on that for a [inaudible 00:02:03] anyway. It’s nice to have, but all it means is it indicates that I was part of the government executive, so I was Parliamentary Secondary to the Treasurer and responsible for a range of policy areas within the treasury portfolio and that was mostly around financial services, superannuation, that sort of thing.

Bernie Ripoll: [02:21] So I spent quite a while in politics as an elected MP, a member of Parliament for six terms, just shy of 18 years. It was a great experience, lovely to make that contribution, be part of a community, and also to see things from very different perspectives politically about the sort of issues that are really important and meaningful to different groups of people, consumers, individuals, families, business, and I really developed a strong attachment you might call it, or a love for financial services and the financial service’s sector, because I really got a great appreciation for the value that it provides people and their aspirations, and wanting to create a better life for themselves, and their families, and children. And I think in the modern world we live in, it is a complex world, it’s a difficult road, and a pathway that’s often got lots of different pot holes, and financial services is a big part of that pathway forward for so many people.

Bernie Ripoll: [03:26] So I’ve maintained a real passion and a real love of this sector and wanting to [inaudible 00:03:33] better consumer outcomes, so I want to make sure that we have a great financial service’s sector in Australia because I think it’s a really important part of our economy, and it’s also a great export. Australians, we back pretty highly in this area, we’ve got the fourth largest funds under management in the world. For maybe your overseas listeners, it’s pretty big for a small country like Australia, and that the reason for that is because we’ve got this enormous national pool of savings through our superannuation system that today it stands at around $2.7 trillion, which is an enormous amount.

Bernie Ripoll: [04:09] So I loved being in politics, I loved every day I way there, and I love every day that I’m not there now.

Fraser Jack: [04:17] There right now.

Bernie Ripoll: [04:19] Yeah, absolutely. Anyway there’s a quick snapshot I’ve made.

Fraser Jack: [04:21] That is a quick snapshot. Now while you were there, of course, you were fairly instrumental in a massive policy change that came through and some reports that you cheered. Do you want to just give us a quick overview of that? Back then we called it the future of financial advice.

Bernie Ripoll: [04:38] Sure, sure. So FOFA, as it’s become known, is a fantastic piece of reform and I had the honor and privilege of cheering the Parliamentary Joint Committee on Corporations and Financial Services, and the role of that committee was to oversee a range of things in that portfolio around financial services, and court’s law, and a range of things, and one of the big reports that we did was looking into the collapse of Storm Financial and Trio, and really Storm Financial in particular, which is probably one of our biggest corporate collapses in Australia, certainly in financial services, and more than 14 thousand people where negatively impacted, and there was more than $4 billion lost at the time, just at the time of the GMC. So it was pretty important out of that came some significant recommendations that my committee did, and then what followed was the future of financial advice reforms in the bill. And that really has been what has led to, in the last five years, a whole heap of change.

Bernie Ripoll: [05:48] And ultimately through what’s been happening in the sector over many years, a royal commission. It was a royal commission into misconduct as everyone knows, and it really was about highlighting and putting a very bright torch on some of the misconduct in financial services. And while it’s been painful for a lot of people, including myself, I think there is a really good side to that; and the good side is we have already seen, before there’s any new laws written, we’ve already seen a shift in culture, an improvement in the way that, for example, banks are treating their customers, and we’ve got this fantastic set of circumstances now that I’m sure others, like me, have received letters from big institutions which have said, literally, “We’ve identified some fees we shouldn’t have charged you in the past and here is the money back.” And you don’t have to do anything, you just have to receive the letter and being appreciative of those, let’s say, things that shouldn’t have been charged, identified, and then all of that happening.

Bernie Ripoll: [06:51] So lots of good work that was done and a lot of things that have happened in the sector. And now I’m doing obviously very different things, but.

Fraser Jack: [07:00] Yup, so your inquiry, essentially, or your committee was at the pre-royal commission, or the mini-royal commission that took place before the royal commission. Do you think that the industry when, after your report came out, do think that the industry did enough then to change? Or it obviously didn’t?

Bernie Ripoll: [07:21] Yeah, no, I think you’re right, obviously it didn’t. We gave the sector, so the collective we of the parliament, and the legislation, and the range of things gave the sector, I think, an enormous opportunity to absorb some significant reforms, and also just self regulate as best as possible and to get on the pathway to reform. I think some of that opportunity was squandered, particularly by the bigger institutions and perhaps by some individuals as well, but that’s history and opportunities are presented to us everyday and not everyone takes the opportunities that are in front of them, and I think that for large opportunities and institutions, it may have been difficult for them to understand or see where the future might be, and that by doing the right thing today might prevent other things happening in the future.

Bernie Ripoll: [08:17] That didn’t happen and we ended up with a banking royal commission, or a royal commission into misconduct, which I think was inevitable, always inedible because of the amount of things that have been exposed through that royal commission. So again, looking at the positive of this is, you know, the red lights flashing, the message is loud and clear, if there are bells ringing and flags all over the place, it is the community, and the parliament, and even the sector itself don’t want anymore misconduct.

Bernie Ripoll: [08:49] The opportunity for change and reform is right here right now, and that if everyone would have played their part in that. So for an individual to a licensee, to a manager to a bank, to insurance companies, everybody, let’s get back to focusing on better consumer outcomes, sustainability for the sector, and trying to make the best of this fantastic industry that we’ve got, and a bunch of really clever people, and a bunch of really good things are happening, and let’s make it the best in the world.

Bernie Ripoll: [09:22] [inaudible 00:09:22] sell ourselves short just because a few people are tying to get a little bit more than they should be, perhaps.

Fraser Jack: [09:26] Couldn’t agree more, we want to be able to be very proud of what we do for the rest of the world. Now there are obviously a lot of, as you mentioned it was a royal commission into misconduct, so it was never going to be a balanced report card. If ongoing service arrangements with financial advisors put consumers in a great outcome we ignore all the good stats and just focus on the misconduct, but certainly it does feel like, as you said, there’s a huge amount of change going on and definitely for the better so that’s good.

Fraser Jack: [10:02] Now I just wanted to quickly touch on, we’ve just recently had an election in the country, one of the favorites, if you like, the team who was the favorite didn’t make it through... Do you want to have a chat about that, are you happy to talk about that?

Bernie Ripoll: [10:20] Oh more than happy to, more than happy to.

Fraser Jack: [10:21] I’m only give you a bit of a rib because most of the people listening to this will be on the other team from you.

Bernie Ripoll: [10:26] Yeah, yeah, yeah, more than likely. So just in case anyone is uncertain, I was a labor MP, I’m still in the Labor Party, and I do wear a red shirt, or a red tie, or however you want to describe it, but I am disappointed that my team didn’t win. I’m also relieved in a couple of areas where I think we may have lost our way on some policies’, and I think that’s some part of... You know, I’m not there anymore, I’m not part of the parliamentary team anymore, so it’s really up to them to review themselves and review the policies and come up with something a bit better next time around.

Bernie Ripoll: [11:05] I think there is some important lessons in everything, there has to be. If the community reject you and think that the electorate gets it 100% right, it’s nice how seeing that they got it wrong and we were right. But you really got to look more closely at what’s the change in demographics, what was this election about, what were the key issues, and I think each election has its particular flavor around what it was about.

Bernie Ripoll: [11:31] This one was a bit harder to pick, I think, than most because modern elections are a bit more about health policy, or education policies, and they’re all about the [inaudible 00:11:43], let’s be upfront about that, they’re always about [inaudible 00:11:44]. But that comes in many different forms, but I think, you know, the past elections, they’ve been about migration, perhaps, or border protection. And there’s a long list of what elections are about or combinations of.

Bernie Ripoll: [11:56] But what I think distinguishes this election for me, I think anyway, that it’s the first time we’ve had an election about retirement, about peoples’ future post-work, and I think that really highlighted for me a whole range of issues around how society’s changed, how peoples’ aspirations maybe have changed, but also how we view ourselves since the last 30 years of SG, Superannuation Guaranteed. Where today working people, people who work in construction, in mining, people who work in professional services, people who work in hospitals, or schools, or police, but once they can all be classified off into one particular segment, I’m going to try and be careful on the words I use here, but I think what we’ve found here is there’s almost a coming together of all of those people that might have been once upon a time in a 1950s environment working in a factory or a professional... Really distinctive as a class of people.

Bernie Ripoll: [13:04] I think in this election it was much more blurring. So someone who works in a mine somewhere might be a [inaudible 00:13:12], might be on $200 or $250 thousand a year, and they’re not wealthy, but they’re earning a hell of a lot of money. And maybe their aspirations and where they want to be in the future looks very different to what the political parties might still be stuck with as an idea.

Bernie Ripoll: [13:28] So I think we can unpack this a fair way, just sort of look at it... You know, what do small business people want in life, and certainly for my parents it was to work really hard here; and my parents are migrants, we’re a migrant family, and work really hard here and give their children, me and my two brothers, every opportunity to get a good education, maybe go to university, get a trade. I got a trade and then later I went to university.

Bernie Ripoll: [13:57] But I got all this opportunity and for me to do that and made it, and what do I want for my children? Well I want them to do better than me, why wouldn’t I? I’m a parent. And so we’re all working towards this new future. I think this election really highlighted some of those issues. So people who have worked hard all their life and saved for it, and they may be self-funded in retirement, they may be in an SMSF, they may be in an industry fund, or in a retail fund, or both. Or maybe have three accounts, which is terrible.

Fraser Jack: [14:29] Allegedly, allegedly.

Bernie Ripoll: [14:31] Allegedly, yeah. Well, no, it’s got to be terrible, you’re paying three times the fees and it can’t work in your favorite, but anyway. So I think there’s a lot there, and there’s a lot for people to think about, and I think for the financial service’s sector to consider around how peoples’ aspirations are changing. And a really important point that ties all that in for me is the value that financial services, so whether it’s advice, or particular products, whether it’s an insurance product or a particular wealth product, it’s really about trying to make what people want and need rather than telling them what they want or need.

Bernie Ripoll: [15:09] And there’s a real big distinction, there’s a really big distinction here. People are aspiring to do... Well they want to transfer some of that wealth in later life, they want to transfer it to their children, their family. Why wouldn’t they want to do that? And I think we all need to be more cognizant of that. So the value that financial services bring is a really important service, in a way it’s an essential service. How do people navigate the complexity of life, let alone the complexity of the financial world, this is not 1950, you know. This is nearly 2020, and so therefore the services that this sector brings forward are really important ones.

Bernie Ripoll: [15:47] And what’s the best way to manage your superannuation given that it’s compulsory? You don’t get a choice. But it’s different for different people. If you’re a very low income earner, let’s say on the minimum wage, you’re doing it pretty tough, and you don’t really get a lot of options, and a lot of choices, and you really can’t afford high quality advice. You should be able to get some sort of advice and it might be just about managing cash flow and debt.

Bernie Ripoll: [16:15] If you’re on the average wage, I don’t have the exact number right in front of me, but it’s closer to $90,000 a year, the average wage. That’s starting to get to a reasonable amount of money, but we know that if that’s all the income you’ve got coming into your household, you’re probably struggling. Most households are two income families, or three income families. And if you’re at the higher end of that, which is now not so high anymore, let’s say you’re earning $150 thousand or more in a household environment, you’re probably only just sort of getting forward. Interest rates might be the lowest they’ve ever been in history, but certainly saving for a deposit for a house, or buying a house, or just managing through life is really complex.

Bernie Ripoll: [17:01] And this is where I think advice is strategically important, and it’s not just about selling someone a product, or an investment, or anything like that, it’s about how to navigate through this whole complexity of an environment. And I think the debate going forward is going to revolve much more around superannuation contributions, what should the correcting sending be, and should that be the same for everybody? Does everybody have to be locked into a particular vehicle or some other vehicle? So there’s lots of questions and I think that’s...

Fraser Jack: [17:29] Yeah, well certainly, and I was only ribbing you about the election too, by the way, that seemed like the right thing to do. But on that though, there was some policies, and you mentioned that retirement and some of the superannuation policies were a big factor. Now to me, some of the policies that were put forward, to me weren’t that bad. Some weren’t that bad, but some were terrible and I was definitely against the franking credit policies because I felt that really disadvantageous a lot of people that had been given a rule one way, and we have it because it feels like it’s double taxing otherwise. But then some of the better ones I thought were around the negative gearing type ones, and while I do want to see young people coming through have access to property and be able to buy first-time property, not have them all purchased as rental properties, that sort of thing.

Fraser Jack: [18:34] So I think some of them where all right and some of them weren’t that great. What were your thoughts?

Bernie Ripoll: [18:40] Well Fraser I think you’re right, I’m with you, it’s not a one size fits all. And certainly Labor had some, I thought, some very good policies, well thought out, that have made it in the marketplace for quite a while with the electric certainly on negative gearing. I thought they made a good strong argument, but maybe that rejection of that more broadly, and I’m not sure the election was won or lost on that particular policy, but certainly it shows the complexity in that space, and trying to get it right is really complex. And it also demonstrates, I think, that maybe there’s a broader group of people who are either in that particular space, in terms of negative gearing, or aspiring to be.

Bernie Ripoll: [19:23] Maybe there needs to be different conversation around what’s the best way to deliver people some osrt of incentive to either get into the housing market directly, or, if they want to use housing as an investment, how is that treated in terms of our tax system so that it’s fair against all other investments and how they’re treated in our tax system? And I’m not sure that proper full debate ever made it through, yes the policies were there for a long time.

Bernie Ripoll: [19:49] On the franking credits I think that there are some absolute issues there, and I think the concept of Top End of Town just didn’t resonate. I mean, what we found is that some people who had access to franking credits, imputation credits below the zero line, so when they fell below zero they were getting very modest checks back, and they weren’t the top end of town. They were ordinary people who’ve worked hard, they’d slaved, maybe they were frugal all their life, and they felt that little bit of money, for some it was tiny, I heard of some directly where it’s $1200 a year, and others it’s obviously a little bit more.

Bernie Ripoll: [20:31] But I think this blanket approach that everyone was in the same basket, I think, just was really detrimental to the argument and I think it’s been categorically rejected by the community, and I’ll be surprised if Labor ever come forward with that policy again. But that’s up to them, I’m not you know. They decide on their own policies, I’m a commentator on the sidelines now. I mean, it’s just..

Fraser Jack: [20:55] Exactly, and because of that we might move away from the political topics.

Bernie Ripoll: [21:00] Sure, sure.

Fraser Jack: [21:01] Financial services, you’re obviously still working in that space now, in both technology and in the consulting role. Do you want to give us a bit of an overview of what you’re doing?

Bernie Ripoll: [21:10] Sure, well I’m doing a couple of things and they’re quite different. One is very direct for me and that’s being part of a Fit Tech business, a self directed digital device, which is not Rabbi advice, just to put that out there straight up, called Map My Plan. And what we sent out to do right from day one with Map My Plan was really try to break the nexus between advice and products. There’s a lot of people out there, and I mentioned earlier, who might be on very low incomes that really do need advice, but no one can afford to give it to them because they just really don’t have the sort of cash available, or a super balance available that allows them to get that full sort of rich advice.

Bernie Ripoll: [21:52] So we set about creating a digital platform, it’s self-directed, so it doesn’t need any human other from the person entering their own data, and it provides a really good basis, it’s really great technology, around helping people to navigate and better understand their own financial well beings. It’s more of a well-being tool. It’s around saying, look, this is what you’ve got, and this is how to best manage it, and feel comfortable at night. You know, you’re getting good sleep because you know where you’re at financially, and the perfect way to explain that to people listening might be to say that somebody’s financial well-being is not about how much money they have, it’s how well they use what they have.

Bernie Ripoll: [22:32] So whether you’re on a little or a lot, as we all know, there are people who earn very large sums of money, and are up to hop to the eyeballs in debt, and really struggle to make it through, and they’re probably more stressed out about their financial circumstances than somebody on a very modest income whose really good at managing money.

Bernie Ripoll: [22:54] So it’s really about trying to meet in the middle rather than telling people what product to actually buy. So we’re a non-competitive product, literally.

Fraser Jack: [23:03] Yeah, I’m certainly supportive of all this, or anything that tries to get people to engage in financial services, or engage in taking responsibility for their own financial lives. And often these things lead to financial advice relationships in the future. We used to say 2 in 10, but I think I’ve seen stats recently that says that’s more like 1 in 10 who have an ongoing service fee relationship with their financial advisors. And to me that means there might be 1 in 10 on the other end of the bell curve that were never going to get it, but there’s certainly that 80% of the market that needs help in some way, and access to help in some way, and then those people will move towards getting advice as their life gets more complex.

Bernie Ripoll: [23:53] Yeah that’s right, and I think it’s a pretty frightening figure. Look, whether it’s 2 in 10 or 1 in 10, let’s just say it’s the 80-20 rule, and we’ve been stuck on that number for 30 years. The number of people who pay for advice is very low, and they’re probably more higher net-worth or a little bit higher than the average person, but the people who really need it might just be people on modest incomes, and average incomes, and trying to just move forward in the right ways and the earlier you start the better off you are. I think there’s some really core principals there that we all subscribe to, this is not ideological in any particular way, it’s really about understanding what people need and what people want. And they want technologies that interact with them. And young people in particular, so whether it’s mobile based or app based, but something that really works the way they want to work, and interact, and better understand their own circumstances.

Bernie Ripoll: [24:49] So I think there’s a whole market out there, and there’s lots of competitors, and people doing things in this area, and we even see the large institutions trying to sort of capture this market as well because I think if we really look forward, not just in the next 5 years, but in the next decade, I’ve got no idea what that looks like, but I have some idea of what it doesn’t look like, and I think if we look at the bricks and mortar, and if we look at the way the technology works, it will be really different in 10 years time. Unimaginable, perhaps, as to how we manage our financial circumstances, let alone anything else.

Bernie Ripoll: [25:25] So if there’s a message out there for everyone it’s engage early and have a look at what’s available and see how you can affordably get some advice, and the ultimate piece of advice though, is you can never take away a human or that relationship that you have with someone with just technology. It’s expensive. So it’s really about trying to manage that between having some sort of technology based thing versus a full relationship, which is quite expensive. And for me to encourage young people in particular to take an interest in their financial well-being so that at some point they can have that relationship, and want to pay for it. And that ought to be what we’re striving towards.

Fraser Jack: [26:05] Either that or they should become financial advisors themselves?

Bernie Ripoll: [26:08] Well we’ve got quite a few, there’s about 26 thousand in Australia so it’s a big number, we’ll see how many are left after the...

Fraser Jack: [26:17] Yes, I have heard all differing numbers of how that may reduce over time, but I think the one I heard this week was about 40% reduction. So it could be a massive group of people. Now I just wanted to cover up, so you’re doing a bit of work with some technology, what else are you working on?

Bernie Ripoll: [26:37] So certainly really enjoyed talking to large groups of people, be it for the board room, or through conferences, or more intimately with individual licensees and companies about what some of these things mean, how it relates to what regulators are thinking, and what politicians, and the parliament are thinking, and how they can play a bigger role. And I really enjoyed doing that and sharing some insights into, whether it’s the political process, or perhaps the process post royal commission, or a range of other things to try and support organizations trying to do a better job, trying to improve their culture, and trying to move to that new environment, which is where I think and see where the future might be. And I’m finding there’s a lot more interest, there’s a lot more activity in the space. So it’s not just about the government’s peace, or meeting their compliance, and other obligations they have to the regulators, but also trying to work closer with their own people, so their own advisors or teams, and trying to develop better relationships with their client base and consumers.

Bernie Ripoll: [27:50] I think there’s a really big gap there, I think we’ve all failed as a sector if the number of people who get advice remains stuck for the next 30 years at 1 or 2 in 10. Why shouldn’t it be, let’s have a big, hairy, audacious goal here, why shouldn’t it be 5 in 10? Why shouldn’t half the population get advice? Why don’t we try to make it affordable for them? And a young person may not have the sort of finances to be able to afford full financial advice, you’d certainly might want them in a decade.

Bernie Ripoll: [28:23] So I just think we need to regig, and rethink how works, and I’m trying to play a bigger role in that space, and add some value, and certainly share some of my insights and experience for the past 20 years involved in the political process, in particularly in this space as well.

Fraser Jack: [28:38] Yeah, I don’t think you’ll get any arguments from the listeners as well. We all want that, to be able to have more people have access to quality advice, and then have it at a way that it is affordable, and so we just need to work through, obviously, how that’s going to happen. Now if you’re the future, let’s talk about the new future of financial advice, not the old future of financial advice. The future of financial advice was great and now it’s in our past, it’s strange to call it the future anymore, there’s going to be a new future, how do you see the industry planing out over the next few years once a lot of these changes have been committed?

Bernie Ripoll: [29:16] Well it’s an interesting proposition and I think there are a few different pathways. I mean clearly the message from the royal commission regulators, and the parliament, and the community is they want to see a shift in culture, they want to see a lifting of standards, they want to see a professionalization of this sector. And I think this sector deserves to be a profession, but it has to work hard to be one, and it has to earn it, and you have to give certain things up to become a profession and then in return you get a different status in life, a different status in the community, and you’re remunerated differently, and I think all those things are really going to play out now, and a lot of those things are culturally based. Some of them are through regulation, and obviously compliance, and enforcement, and all those other things that come with it, but I think the rewards can be enormous, and so I think, and to give you a couple of rewards straight up, it could be that in the future, under a professional model, that financial advice could be tax deductible for the first time. So, just as one thought.

Bernie Ripoll: [30:25] It also could mean that the sort of respect that people in this sort of profession get is completely different, and that not all financial advisors are seen at the lower end of the food chain rather than compared to a doctor, or a nurse, or a pharmacist, or somebody else that’s regarded highly as a profession. So I think that’s a pathway for the future that does take some pain to get there and perhaps it means it’s a bit of a clean out.

Bernie Ripoll: [30:54] We’ve got a system that’s been creeping around been growing on top of itself a lot of barnacles for the last 30 years and it’s growing in step, if you like, with the growth of superannuation, from humble beginnings, 25-30 years ago, to now being this enormous honeypot, this 2.7 trillion in national savings. So there’s a lot at stake here, that’s my point here, there’s a lot at stake. So I think we need to be a profession. Everyone I talk to wants to be regarded as a professional, and I think for the first time from the feedback loop that you get now, is that good people in this sector have stopped talking about themselves and have started talking about consumers, and better consumer outcomes, and have started talking about how to better the loop of the service and started talking around how that can play a bigger role in this.

Bernie Ripoll: [31:48] So they’re starting to lead, we’re just starting to see that. So I think that’s a good new future, we were talking about not the old future, but the new future.

Fraser Jack: [31:55] The new FOFA. I’m glad you mentioned tax deductibility, it’s been in the commentary lately there’s a couple of groups and I know X Y communities are putting some ideas together now to make that conversation. How far off do you think that could be?

Bernie Ripoll: [32:17] I’ve got some bad news for you, I think it is a little way off, and let me just draw to your listeners’ attention, perhaps maybe not a good example, but anyway it’s an example. The health professionals, doctors, and GPs have come through a very long road from barber surgeons. They actually were barbers, hair cutters, and barbers, and barber surgeons that used to cut people and at one point in time they separated out into two professions, those people would remain as barbers and those people would become surgeons, and look that professional pathway didn’t take long, just maybe 5 or 600 years.

Bernie Ripoll: [32:57] So I’m not saying it’s going to take that long in financial services, I think we’ve considerably sped up that process, but becoming a profession is a torturous path. We’re certainly on the road right now and I think you can lob off some zeros attached to that number. There’s other areas where you can look back historically and see what does it really take to become a profession, and what was the pathway, and certainly disciplinary bodies, codes of standards and ethics, education, and monitoring bodies that have power over the profession and that everyone signs up to. You know, doesn’t mean everyone’s good there’s always a few bad eggs in every professional as well, but it certainly puts you on the right path. And I think when we get there then that conversation can be had in a serious nature.

Bernie Ripoll: [33:52] And you can go to government, or not even the government you can go to the ATO, and say to them, “A treasury? This is something now that can work because we’ve got a profession.” Because right now I can assure you that if you talked to the ATO of Treasury there’s no way they’d entertain this idea and give you the advice in favor of it. So there’s a bit more work to be done.

Fraser Jack: [34:10] Yeah, I guess, that’s somewhere between not too long and 5 or 600 years.

Bernie Ripoll: [34:15] Yeah, roughly. Give or take a zero or two.

Fraser Jack: [34:16] Yeah, very good. Now if you’re speaking to some friends of yours that were about to go get financial advice, what tips would you give to them?

Bernie Ripoll: [34:27] Well first of all I’m not a financial advisor so I can’t give any advice, and also I’ll just put that little caveat in there right now.

Fraser Jack: [34:32] Oh no, tell us about-

Bernie Ripoll: [34:33] Nothing I say here should be considered as advice, if you think it is then you should get professional advice.

Bernie Ripoll: [34:44] I’ve read my liability clauses. Now what I do say to people is really simple. If you’re starting to think about this I’d say think about it really early, start doing some research, there’s some really good places you can start. Moneysmart.gov.au is a great place, it’s Aussie government, it’s a wealth of information, and I think if you’ve got a trusted advisor, one that you know, go talk to them about what they might be able to do for you in your circumstances and look for... You know, for me I think start by looking for bits of technology that can help you, that might not cost you anything or very little and gets you on the path.

Bernie Ripoll: [35:31] My single best piece of advice is simply this: Do something today, get started right now, because waiting another 5 years to think about your retirement, or your super, or how you’re going to manage your cashflow, it’s too late. Do it today, start making notes, start doing the research, and the sooner people begin that journey, and the younger they start that journey, we know through evidence and through research that they have a better outcome.

Bernie Ripoll: [35:59] So Map My Plan does a lot of research, and we do nationally significant surveys, and there’s a clear indicator, and piece supported by the survey, people who get advice have a better financial future and outcome than people who don’t get advice. And I think that says something too about the value of this sector, that an advised outcome is better than an unadvised outcome, that an advised product is better than an unadvised product, but taking some control of your financial future is always better. So I’m not sure they’re words of wisdom or anything like that, but start today.

Fraser Jack: [36:36] Oh yeah, I absolutely agree with you, and as you mentioned the research all says that, and is just making sure that, I guess it’s making sure that we get that message out to everybody that’s home. Now if you’re turning to any people looking to coming into the new profession, what sort of tips do you give to those people?

Bernie Ripoll: [36:59] Well, if you’re a young person and you’re looking at this sector, the first thing I’d say to you is there’s an enormous opportunity in there, there’s never been a bigger opportunity. But the profession is at a fork in the road where there’s a much higher standard being built in that’s there right now, but education levels, so young people going to university or wanting to start, let’s call it on the ground, at the ground level where in the coming years not any are providing a really great essential service for a whole heap of people that desperately need good advice, but it’s also a rewarding environment, it’s a challenging environment, you’re actually dealing with peoples’ lives. You’re dealing with their financial lives. What is retirement going to look like for the people, how are you going to manage all of those things? So I think for young people they ought to be really excited about it.

Bernie Ripoll: [37:50] I love the sector, I think it does so much good, certainly there’s some areas where it could do better and make improvements, but if you look at the positives it’s absolutely fabulous, and I think for people that have been in the sector for quite a long time, there’s some that are transitioning out, they’re close to retirement age, or they’ve built up really great businesses that might be for sale, so there’s an opportunity to come in and buy, and really reshape what this sector looks like and that’s what’s exciting for me.

Bernie Ripoll: [38:17] And it’s not just the bricks and mortar part of it, but it’s the technology part of it, what we’re seeing with the younger kobold coming through, and when I say young, I mean under 50 by the way, so... Hang on a second, that means I’m not young, no, let’s make it under 55, yeah.

Bernie Ripoll: [38:31] What it really means is, if you got ideas, and your passionate about it, and you’re enthusiastic, and you really want to contribute something, and do something, this is a wonderful sector to be involved in, and for me I’m as excited about this sector now, more than I was a decade ago; I can really see positive things, and positive things, and some of the conversations, obviously, outside people sort of saying how do I exit, how do I transition? And some of those are really positive and I think generally now it’s all about that excitement of how people view it for the next decade.

Fraser Jack: [39:12] Yeah, fantastic, and I’m just a little bit crunched for the time, I’ll finish on a couple of quick questions though. What advice would you give yourself if you could go back in time and give yourself some tips? What would you say?

Bernie Ripoll: [39:24] The one I gave you just earlier, get started early, get some advice, pay more attention to your financial well-being, understand the more you research it, the more you do it today, the better off you are. And I’m completely genuine about that, I should have paid more attention a lot earlier, I’d be better off. I had got one good piece of news on that front though, is that my adult children, who are young adults, are doing better than me. So if anything, I’ve been part of that advice, but they’re doing much better than me. Certainly at a much earlier age. Maybe it’s reflective of their era, their generation, but anyway it’s good news.

Fraser Jack: [40:03] That’s good, congratulations. You’ll be able to annoy them when you retire. Now just quickly, how can people get ahold of you if they want to continue the conversation, or get you to do speaking at their events, or anything like that?

Bernie Ripoll: [40:16] So just either through LinkedIn, just Bernie Ripple, R-I-P-O-L-L, or just at my Gmail account, so bernieripoll@gmail.com simple as that. Otherwise, you need to google me and find lots of stuff, hopefully mostly good.

Fraser Jack: [40:31] Google, “The Honorable Bernie.”

Bernie Ripoll: [40:34] You can do that as well if you really want to.

Fraser Jack: [40:37] Bernie, thanks so much for coming on the Goals Based Advice Podcast and sharing with us some of the stuff that you’ve done for the industry and also some of your thoughts on how it’s going to turn out as we go forth.

Bernie Ripoll: [40:48] Absolute pleasure Fraser and congratulations on your program, thank you.

Fraser Jack: [40:52] Great, thanks Bernie.

Fraser Jack: [40:57] If you haven’t already, I’d love you to subscribe to the podcast on your podcast platform of choice, and to continue the conversation head over to our social media channels. We’ll catch you next time.


Disclaimer: This document is a transcription obtained through a third party. There is no claim to accuracy on the content provided in this document, and divergence from the audio file are to be expected. As a transcription, this is not a legal document in itself, and should not be considered binding to advice intelligence, but merely a convenience for reference.