Comment - We can learn from the Aussies
Alan Milton attended the Financial Planning Association of Australia's convention in Sydney recently and says New Zealand can learn alot from its neighbours.n.
Tuesday, November 30th 1999, 12:00AM
In some ways it was more American than Australian and the atmosphere to me, contrasted strongly with the general sense of frustration and lack of direction one senses in New Zealand at present. It was interesting that my reaction was not shared by all Australian delegates who, in some cases, exhibited a degree of cynicism and compared the "ordinariness" of the opening with the more spectacular proceedings in Cairns last year. (I wasn’t there, so can’t comment).
The retiring president of the FPA spoke about the strong growth of their association in numbers, quality and influence. Since the FPA was formed in 1992, the result of a merger like ours, and the transitional challenges resolved, it has gone from strength to strength and is growing fast. Its education programme is well-established and record numbers of CFPs are being added.
It was clear that support and membership of the FPA has a broad base. This was evidenced by the range of exhibitors and large numbers of delegates wearing company shirts, among which AMP and Tower were most prominent.
It seemed clear that the integration of membership from various sectors of the financial services sector is proceeding fast and the life insurance industry has fully embraced the concept of financial planning. This augurs well for the future of the FPIA, but it will take time and willingness of everyone to participate. That includes product providers.
There was a maturity and substance about the FPA Conference which we have to develop. This was their 8th Conference since the merger; we have had only one but we have a model to observe and work on to achieve their results.
The Australian Treasurer, Peter Costello, who addressed and formally opened the convention acknowledged the role of FPA members providing valuable services to investors but also as a source of helpful submission and comment to the government on financial issues. He quoted extensively from a recent FPA submission to Treasury.
Clearly, the FPA have developed to the point where they do have access to government and its views are listened to and considered. Again, we have to work hard to get that sort of recognition here.
I didn’t attend all the sessions of course because five sessions always ran concurrently. But of those I attended, I recommend :
Harold Evensky - Wealth Management
Deena Katz - Managing Dynamic Growth
Ron Scott (BT) - Wrap Accounts
Anthony Hunt (Perpetual) - Multiplying the value of your Business.
David Hale - Investing in the 21st Century
Audio tapes of these all the sessions are available through Good Returns bookstore (click here to order).
Australian trends
- A battle seems to be developing between master trusts and wrap accounts for the management of client money. Statistics were produced at one session I attended which suggested that growth of funds under management in master trusts had halted whilst wrap accounts were growing fast, admittedly off a much lower base. The importance of building an ongoing fee income stream is being recognized.
- Conversations with Australian advisers indicated that the average client paid about 1.5 per cent pa for a wrap service, about half of which would go to the adviser. Costs were lower for high value portfolios but not necessarily higher for low value portfolios.
- GST will impact on the industry and, like here, fees will attract GST. No one seems sure yet whether this will be absorbed by the adviser, the wrap supplier or passed on to the client. They also expect GST to apply to up front fees on managed funds.
- About 60 New Zealand delegates attended, many with spouses and some with children. Fund managers like Armstrong Jones, BT and Tower had workshops or social functions (or both) which delegates were invited to attend. With so much going on, one couldn’t be everywhere. Overseas conferences offer the opportunity to catch up with ones peers from around New Zealand, in some ways better than one can do at our own conference.
Next year's FPA Conference will be held in Melbourne from 7 - 9 December. I would encourage members to consider attending, whether you are a financial planner or specialise in risk. It’s clear the two disciplines are rapidly converging and you need to experience an overseas conference to understand how and why.
Alan Milton is a director of Diversified Investment Strategies.
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