What marketing techniques work for financial planners? Many financial planning firms are frustrated with conventional marketing techniques, according to Steve Davison, executive director at Genesys Wealth Advisers. In a recent No More Practice blog, he said most marketing activities often don’t work as advisers sell something that clients cannot touch or experience. "These traditional marketing tactics work best when selling a financial product, when what advisers are really selling is the product called 'advice'," he said. "Advisers can’t rest their revenue hopes on conventional marketing – they need to put themselves front and centre, focusing on building and deepening their relationships. Good licensees focus attention and resources into helping advisers develop soft skills that trigger the emotional connection to buy advice."
Demand on the rise for planning practices. There has been an increase in both demand for financial planning practices as well as the price acquirers are willing to pay, according to Forte Asset Solutions director Steve Prendeville. Demand is now outstripping supply, and InvestorDaily reports that large players such as MLC and Axa have been effective in coming into the market while the trend for sellers to continue deferring sales until revenues have improved has also increased demand. Kenyon Partners chief executive Paul Tynan also said there is good demand for financial planning businesses, with more buyers than sellers in every state. He said buyers are focusing on where the recurring revenue of practices is coming from.
ASIC details national examination for financial advisers. ASIC is looking at the possibility of setting up a self-regulatory organisation (SRO) to develop and administer a national examination for financial advisers. ASIC is proposing a 2014 start date for the exam with a two-year transition period. The regulator said it would like to see the completion of the national exam as a requirement of membership of an industry association or a condition of employment for industry participants. "Financial investors and consumers need to be confident and informed when planning for their future and having a national exam for financial advisers is an important part of making this happen," ASIC chairman Greg Medcraft said.
AFA points to legal holes in FoFA. The Association of Financial Advisers (AFA) has received legal advice which points to a potential loophole in the Future of Financial Advice (FoFA) legislation. "The AFA has had legal advice which suggests that on a literal interpretation of the law, there will be a period where neither the current Know your Client obligation under Sections 945A and 945B of the Corporations Act 2011, nor the Best Interests obligations under FoFA will apply to a licensee or advisers when giving personal advice to retail clients," said AFA chief executive Richard Klipin. "Given this uncertainty, we are genuinely concerned that consumers may be left unprotected for up to a year and are seeking urgent government intervention to resolve the issue."
Industry welcomes opportunity to provide advice. The government’s recent decision to allow professional accountants to provide limited financial advice under the Future of Financial Advice (FoFA) reforms will lead to a rise in the number of Australians provided with advice, according to the Institute of Public Accountants. It said that more than 70 per cent of working Australians and 95 per cent for businesses visit an accountant at least once a year to get their tax affairs in order. "This new licensing regime will ensure that more consumers and small business people will have access to high quality and practical financial advice," said institute CEO, Andrew Conway.
Securitor offers accountants SMSF solution. Securitor has launched a solution for accountants looking to provide limited advice under the Future of Financial Advice (FoFA) reforms. The solution incorporates Securitor's compliance program, BT Financial Group’s technical and research expertise, technology solutions and the assistance of practice development managers. "We would encourage any accounting professional looking for a strong industry partner that understands their business and shares their passion for providing high-quality advice to clients, to register their interest," said BT Financial Group head of dealer groups Matt Englund.
Investment sentiment weakening. Investor sentiment, as measured by actual investment decisions, continues to be weak, according to research from Colonial First State Global Asset Management (CFSGAM) and the University of Western Australia Business School. It indicates a low preference for equities in all age groups, other than those under 35. "Women are far more cautious investors, closely following the market and more likely to move away from equities during times of high volatility," said Colonial First State Global Asset Management's investment markets research senior analyst, Belinda Allen. "The exception is women under 35 years whose investment approach is in stark contrast to women in all other age groups, showing a higher propensity to invest in equities."
US equities offer exposure to emerging markets. Investing in high-quality US stocks can offer exposure to Chinese growth drivers and wider emerging market consumer growth, without exposure to the higher volatility associated with direct investments in the region, according to Fidelity. Large multinationals like Coca Cola, Proctor & Gamble, Johnson & Johnson and McDonalds now generate large portions of their revenue from emerging markets, and most of these companies are considered stable, safe businesses. Demographically, emerging markets provide a massive source of demand for the goods and services these companies provide. "The US equity market is one of the broadest, deepest and most global stock markets in the world, providing an ideal ‘core’ component for any well diversified portfolio," said Aris Vatis, portfolio manager, Fidelity American Fund.