Intro: 00:00 This episode was recorded live at United, the 2019 AFA conference in Adelaide. The Association of Financial Advisors is the association of choice for Financial Advice Professionals and empowers them to transform the lives of Australians through quality financial advice. For more information, check out afa.asn.au.
Fraser Jack: 00:21 Welcome to the Goals Based Advice Podcast where we have 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. I’d also like to thank the Association of Financial Advisors for having me along to the conference and being able to do this podcast, so thank you.
I’m currently joined by two gentlemen who spent a bit of time in the media, the CEO of the Association of Financial Advisors, Phil Kewin, and the CEO of the Financial Planning Association, Dante de Gori. Welcome gentlemen.
Phil Kewin: 00:54 Thanks Fraser. Great to be here. Thanks for having us.
Fraser Jack: 00:56 Now, one are the key messages that was delivered on the first day, phil, was this conversation about how we might all have different voices from time to time, but it’s really important that we focus on one message. And obviously the theme of the conference is Unite, and we’re really great to have a chat to you both around that theme and how the two associations and the other associations, in fact, are working together in many different ways at the moment.
Phil Kewin: 01:20 Sure. I mean if I just kick off in terms of United and the one message, because we’ve had so many people say, “Look, we just need one voice. One voice.”
As I said yesterday, when we approached the politicians, they’ve said to us, “Look, I understand what you guys are talking about. But we’ve got multiple messages from your industry, so it’s very confusing.” So it would be a lot easier if we just had a single message.
What we’ve been talking about is the fact that you can have many voices but you just need to have a single message, because otherwise it gets very confused.
Fraser Jack: 01:57 Yep. And Dante, this is your first AFA conference?
Dante de Gori: 02:01 It is. It is my first AFA conference and I think history’s been made. I mean, I know someone will check the record books, but I think as I said yesterday, it’s the first time a sitting CEO of the FPA has attended the AFA conference. And I thank Phil, and Mark, and the AFA board for the invitation. It’s been amazing.
I think that is really the essence really. I mean, the theme of United and the work that Phil and I, and the AFA and FPA collectively are doing is about uniting the message, uniting the profession together. I think it’s really important to note that it is actually many, many voices but one message, right? Because collectively we have our membership, our foot soldiers who can really spread that message. But it’s about getting United on that message because showing the United front is the important thing. And there’s not one person, either Phil or I that can have the same effect that 15 16,000 people could have [crosstalk 00:03:01].
Phil Kewin: 03:01 Yeah, that’s a great point. Because that’s what we are trying to say in terms of many voices. It’s not just... The other politicians aren’t just listen to the associations. We heard yesterday from [inaudible 00:03:13] Jane Hume that she said, “I hear you.” And when she said, “I hear you,” she’s not saying, “I hear you Phil and Dante.”
he’s saying, “I hear you AFA, FPA members.” Their constituents talking to MPs, explaining to them what their challenges are and how it’s impacting them and their businesses.
And in terms of being a first for Dante at the AFA, I should point out that Dante did invite myself and Mike Barnum to the FPA conference last year and we attended that one.
Fraser Jack: 03:41 Fantastic. And speaking of this voice at the moment, and you mentioned, and I’ve seen a lot of photos of you guys, United down in Canberra, in the photos that come out on the social media. And there’s an advocacy pack out now. What’s in that pack and what are we wanting the members to say or what’s the voice?
Phil Kewin: 03:57 Yeah. The advocacy pack was to try and distill the information necessary. A lot of advisors have said, “Look, we want to go and see our local member, but we don’t know how to approach it and what to say.” So this is about giving them the step by step approach to, what you want to do, but the important thing is what you want to say. What we’ve been told by a number of MPs is the fact that they have a lot of people come to them with problems. What they need is solutions because they’re not the experts.
And so if everyone comes with these different stories that don’t match, it’s becomes very confusing. So we’ve tried to distill it down to say, okay, what are the key issues affecting you at the moment and what are you suggesting the government do about it?
Because unless there’s a suggestion, it makes it very difficult for them to say, okay, I understand your problem, but what, what do you need to do is... So we just want to give them the tools to how do you approach it. If you’re writing to them, what you should say. If you’re going to meet with them, who do you approach, look for your local member and what you should say to them and what are you asking for them.
Fraser Jack: 04:57 Yep, and there’s been a lot of joint conversation and work down with the CEO and also the code monitoring body, for example. Dante, you want to give us an update on that if you can?
Dante de Gori: 05:10 On either one of those?
Fraser Jack: 05:10 Yeah.
Dante de Gori: 05:11 I think just to add further to Phil’s comment about the advocacy packs, which is great. The AFA pack that’s gone out and part of it is... And we’re going to make this point and I think Julie Bishop made this point yesterday. It’s really important that members are actually forging a relationship. So the pack is about as much as how to forge a relationship. The etiquette around that and the process. Because we actually want a relationship.
We want our members to have relationship with their local member of parliament so that they’re the person that they turn to when matters or bill or legislation is in front of them about advice. And say, “Oh, wait a minute, I’ve got some some relationships with the advisors that I trust. I’ll go and speak to them about this.”
We can’t just go to MPs when there’s a problem, so that’s really, really important. In terms of, in the [inaudible 00:05:56] facebow in education center is a classic example of trying to get a United message around this.
Phil and I faced this actually in the meeting we had with the minister. The first meeting was that there was already a different proposals in front of [inaudible 00:06:11] her about what the resolution should be. We went in there with a... saying this is what we’re putting in front. This is what we’re putting in front together on behalf of them, collective membership as what the solution should be.
And this is again, the advocacy pack. We’ll try and help to say to the members, “We all know what the problem is, but we’ve got to be United on the messaging about what the solution is.” So that they’ve actually got the solution in front of them rather than having to decide between four or five different alternatives.
Where are we at with that? Well, obviously, we all know what happened yesterday. Unfortunately, we didn’t get the announcement we were hoping for. We’re obviously still confident and optimistic that we will get the change that is been asked for, and needed, and warranted. Hopeful on that we’ll continue to press and push for that.
I think it’s really important. They’ve the messages, they’re hearing us, they’re listening, they understand the problem. So it’s now about them actually to take some action and we’ll hold them to that account.
In terms of code monitoring, it’s a little bit more complicated and in fact the code of ethics which starts in one January, there’s a lot of commentary, Phil [inaudible 00:07:23] laid yesterday in particular, and I know there was an ethics session today. There’s still a lot up in the air in terms of how that’s going to be implemented practically. Code monitoring bodies and our application regarding Code Monitoring Australia do that work.
That application process itself is still in trainers in the applications in, but we have to wait for our state to review and approve. We don’t expect a result until October, but then that body, if approved is then required to start registering advisors by middle of November and that’s every single advisor, not just our own membership. There’s a lot happening there and there’s a lot of uncertainty around whether code monitoring will exist beyond the short term as well.
It’s actually a very complicated issue. It’s very difficult to navigate. We are unsure as to what is really going to happen and hopefully that’s going to be clarified over the next four to five weeks because time is running out.
Phil Kewin: 08:24 And it is interesting because the government has basically said, “You guys, at your expense have to set up the code monitoring body.” And just to be clear, this is not the FPA or the AFA being the code monitoring body. This is a separate entity that has to abide by the guidelines as set out. But it’s not, I said, I mean if we set up the code monitoring body and a single disciplinary body is to come into effect in 12 months time. Does that replace it? Does that compliment it? Does that override it? And that’s the clarity we haven’t received.
In terms of a timetable, I mean, when we met with the minister, that’s probably the most urgent thing to resolve. But in terms of importance to advisors, a good decision particularly around the dates for the exam and the degree is something that we thought it was more critical even though the time is not as important.
But it is important because advisors are making decisions right now. People are making decisions about the future right now, which is why personally, I was very disappointed we didn’t see an announcement yesterday. We hadn’t been told there was an announcement pending, but we’d been given a strong indication that the government was listening. We heard that again yesterday, the government is listening, but as Dante has said, we need some action. Because while they’re listening, people are making decisions.
Dante de Gori: 09:45 Well, this mid November date is very important and fast coming up on us because advisors and licensees are going to have to make a choice as to whether they do or don’t, and who they’re going to go with. And obviously Code Monitoring Australia, it seems to be. Is there others, or is it... [inaudible 00:10:03].
Phil Kewin: 10:02 Well look, the application process is anonymous. There is always-
Dante de Gori: 10:08 It’s not public.
Phil Kewin: 10:09 It’s not public. I mean obviously we’ve made it public because we wanted members to know that there was a solution for them. There could be others, we don’t believe there’s many. We don’t really know that the number. I mean, those who have put in application, they have made the decision not to make that public.
There could be-
Fraser Jack: 10:27 Multiple options that’ll be announced?
Phil Kewin: 10:29 Well, we’ve been told that October with the dates... October is when ASIC will announce the approved bodies. So all bodies, all schemes. So if CMA is to be approved, we’ll know in October, and it’s at that point that then CMA, Code Monitoring Australia will have to start registering advisors.
As assumed that there’s one scheme only, that’s 25,000 individuals that would have to be registered according to the current register of advisors if they want to continue practicing. Because this isn’t, it’s not a choice. It’s actually a condition of your authorization from the first of Jan 2020. If you are not registered to an approved compliance scheme, then you can’t practice.
It’s like if you don’t have PI cover, if your licenses is not a member of an EDR scheme. Like it’s a conditional aspect of being authorized at the individual level. And so if you’re not registered, and if you think about the window of registering 25,000 people, depending on when in October as it gives the green light, that could be six weeks to two weeks depending on when you get the green light.
Fraser Jack: 11:36 Yeah, two working weeks for 25,000 registrations.
Phil Kewin: 11:40 Yeah, and the point is, I mean, some of them said, “Why would you want to do this?” And the answer is because we need the code monitoring body. Because if we don’t have one, then effectively no one can continue doing what they’re supposed to do. But the reality is of the 25,000 plus advisors, not all of them might suit a code monitoring body that set up for our traditional advisors. For example, you’ve got timeshare operators fit in that category of the 25,000 on the file register.
The code monitoring for timeshare operators could be very different for what it is for the traditional advisors that we deal with.
Fraser Jack: 12:18 Is there any indication at this point, and let me know if you can’t announce anything, but around the cost to advisors and planners?
Dante de Gori: 12:28 Yeah, that’s still work in progress, and it’s something that we’re very conscious about the fact that there’s already enough costs in the industry for advisors, but the reality is this thing, this game’s going to have to operate at a certain level because of its obligation.
There will be cost and that’s still being worked on. A lot of that is going to be dependent on how many advisors are actually meant to be in the scheme as well.
Phil Kewin: 12:57 That’s again, something that we’ve tried to communicate to the government that this growing cost to deliver advice, which drives up the cost to run a business and therefore it’s more expensive to give advice. And so we are seeing this move to making advice unaffordable for the average Australian who benefits the most.
Fraser Jack: 13:18 Yeah, a lot of talk recently obviously the work that the AFA and the FPA are doing together, but how are you working with the other associations as well?
Phil Kewin: 13:28 Well, in terms of code monitoring. I mean, there’s a collective, there’s SMSF, [Finzia 00:13:33] stockbrokers and financial advisors, Boutique Financial Advisors Association. We saw those as the core associations because they have their specialist areas, but they have commonalities as well. And we’d been working very closely with them. We, the AFA worked with them closely in the Alliance for a fair retirement in regards, in the lead up to the last election around the franking credits rebate. So that’s another example where we’re working together.
Fraser Jack: 13:58 Also, it seems like it’s spending a lot of time on working on the stuff now. What’s coming down the track that we need to really focus on as well?
Phil Kewin: 14:07 Jeez, a hell of a lot to have the track. We need to get through code monitoring obviously and what’s happening with with that. We’re trying to get a better resolution as far as the FASEA dates is concerned. And they are critical and that’s a government issue. We’re still talking to FASEA about their recognition of experience for prior learning because that’s something that... FASEA has, they’ve got the authority to recognize that experience for client learning and to give advisors credits for that experience. And that’s something that we’ve continued to work on it.
Fraser Jack: 14:41 Just one of the other things I wanted to highlight [inaudible 00:14:44] both here, mental health, mental illness has been an issue and a conversation that everybody is sort of going through, a spectrum somewhere on the health illness scale.
I know you’ve both sort of got ways that you can help advisors and planners. You want to talk about that?
Phil Kewin: 15:04 Yeah. Look, it is a concern. The biggest concern, and I know there’s been a number of articles on this and some statistics quoted. I don’t know where those statistics come from, but I do know that we are in an industry that is in a heightened level of stress.
You’ve seen that over the last couple of years. We’ve seen that with... We did an an email out to our members, Friday, a week ago just saying we understand that it’s tough at the moment. And the response we got from that was overwhelming in terms of advisors and their own personal stories of how they’re doing it tough in different ways.
The key for us is to provide the support, so we both have a support line. [AFAK 00:15:50], FPA wellbeing. The provider of that is Benestar, which is Australia’s largest employee assistance program. It’s a good step. The challenge we have in a very male dominated, 40 plus industry, they’re not the type of people that reach out.
The thing that we’re really focusing on is as a community, look out for those advisors, trying to give people the tools to recognize the signs. Those doing it tough, most of them are probably out here, they’re at home, they’re in their offices, try to find a way through. And so the key thing for us and we’re trying to communicate to our members is to look out for those people. The people that you haven’t seen for awhile, the people that you can tell in their language, the way they’re talking, the way they’re behaving, that they might be under a bit of duress and just offer them some assistance.
R U OK?Day is coming up and we’ll have a greater focus on mental health and wellbeing around that as well.
Dante de Gori: 16:51 I think, and that’s right, and it’s actually Phil’s point, just to echo, it’s actually the ones that aren’t reaching out. The ones that have been silent, who aren’t actually asking for help, that really concerned about. Because I don’t know who they’re talking to or are turning to. And as we know with the service that we do offer, they’re not using it.
I mean, it’s a very small take-up and it’s just not in our culture or nature, especially for males to actually do that, to reach out. So we will have to be vigilant and we have to make the effort to actually check in on our colleagues. And I think that’s really important, especially in the regional areas where someone could be in their own office and not actually interact with others for a long time.
Just on that as well, I think it’s important to note that, you talked about the different stresses and levels. I mean, there are three areas that I think that people are triggering that stress. One is the education standards, one is grandfathered commissions, and one is a licensee restructure, or reform.
Each of those have a level of stress and impact. And if you think about if you’ve got the trifecta, then that’s a real... For me, they’re the ones that are really, really suffering because everywhere they turning, they seem to be hitting a brick wall, whether it’s in terms of those three things. I’ll find, I mean, I don’t want to simplify it, but that’s the three main stress points that we’re hearing. People are ringing where they are stressed and concerned or indecisive about what to do. It’s one of those three areas and in some cases all three.
Fraser Jack: 18:34 Yep. I’d encourage the listeners to keep an eye out for that. Obviously, the facilities are there. Keep an eye on your peers and the people in these industry that you know, that you think might be suffering and don’t be shy to reach out and try and break down some of the stigmas involved as well.
Phil Kewin: 18:52 And I would say also social media and blogs can be quite damaging, so just keep an eye out for language that you see. Sometimes it’s very easy to be quite abusive and quite aggressive, whether it’s on blogs or whether it’s on one of those social media platforms. Just bear in mind that we’re all human beings and we can all have opinions, but sometimes that can get very personal. And I think that could be a sign that someone’s trying to reach out as well.
So just be careful of how aggressive you get if you do disagree with someone on that side. Don’t have freedom of speech, but just be careful how... Be respectful.
Fraser Jack: 19:38 Yeah, [inaudible 00:19:38] don’t do online what you wouldn’t do in front of somebody, conversation.
Phil Kewin: 19:41 Exactly. Exactly.
Fraser Jack: 19:43 Gentlemen, I want to say thank you both for coming on the show today. I really do resonate with the one message, we’ve all got different voices, we’ve all got, say things in a different way. And just uniting that message across the associations, the profession. So thank you. Thank you gentlemen.
Phil Kewin: 20:00 Welcome. Thanks for having us.
Dante de Gori: 20:01 Thanks.
Fraser Jack: 20:01 Thank you.
Operator: 20:01 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.