ifa Future Forum wrap: Industry bracing for change

After a couple of date changes, ifa delivered its inaugural Future Forum as a one-day in-person event on 17 November.

The event included multiple keynote sessions, panel discussions and Q&A opportunities, and offered attendees a unique chance to network in person for the first time post-lockdown.

In one session, Adele Martin, director and senior financial adviser at Firefly Wealth, noted the importance of pivoting one’s advice practice to attract a time-poor millennial clientele.

She underlined the immense worth about to change hands, with much of the money ending up in accounts belonging to Millennials. 

“There is 3.5 trillion dollars to be transferred from baby boomer to millennials,” Ms Martin said.

“If advisers don’t adapt their offering to appeal to millennials, they are at risk of becoming Blockbuster Video and becoming irrelevant.

“Millennials are the sandwich generation … with elderly clients and young kids. As a result, they are time poor and we need to think about this in our financial planning process and how we can remove the friction for them.”

One way she’s been able to improve the experience for Millennials and remove the friction is through improving the onboarding experience.

“They login and get a welcome video, then a module on goal creation follows and they do a goals exercise, then training on creating their spending plan, link book strategy meeting etc. This reduces the time adviser needs to spend but also is a much better experience for the client,” Ms Martin said.

The summit also heard from Stewart Bell, business coach, author, and founder of Audere Coaching and Consulting, who talked about client segmentation for scaled advice.”

“If clients come to you and say, I just want to focus on this, that makes sense to give clients what they want. But at the same time, just like a doctor won’t give you any prescription you want, there’s an ethical and best interest to make sure that what the client wants is also aligned with what’s good for them,” Mr Bell explained.

“But at the same time, the idea of giving every client a comprehensive service whether they want it, need it or a willing to pay for it and can afford it, is just as far outside of best interest as the previous example.”

Mr Bell questioned whether middle to low-income clients are truly turning away from advice over higher costs.

“Truthfully, most, if not all the businesses I’ve worked with over the last 12 months, started the year with some influx of leads, big businesses, small businesses that did mum’s and dad’s businesses, retirees, rich clients and more,” Mr Bell revealed.

“It suggests that the demand for advice hasn’t decreased, but it’s rather continued to increase.”

Speaking about packaging guidance in an industry-friendly way, panellist Leah Sciacca, acting senior executive leader, financial advisers, at ASIC, shed light on the corporate regulator’s engagement with the industry.

“Structural issues aren’t a matter for ASIC, but we have an opportunity to engage with Treasury on those sorts of things. But for us it is an ongoing process, we’re here to provide clarification or additional guidance,” Ms Sciacca said.

Addressing the disconnect between the cost of advice and what clients are willing to pay, Ms Sciacca pointed to the need for simplification.

“That’s an area on our radar,” Ms Sciacca said.

“Consumers have to see the value in advice, that was something when I was a practicing adviser.

“Consumers need to understand what the advice process involves. That may bring them closer to a willingness to pay something akin to what the cost of advice really is.

“On the advice process side, there is potentially opportunity for technology to introduce efficiencies into the advice process.”

She underlined the importance of keeping statements of advice “clear, concise and effective”.

The day wrapped up with a panel delving into the sustainability of Australia’s advice sector infrastructure.

Sharing the stage were Peter Johnston, the executive director of Association of Independently Owned Financial Professionals, Dr Jeffrey Scott, head of advice strategy, MetLife Australia, and Danni Visser, head of growth at XY Adviser.

Asked whether the industry is sustainable, Mr Johnston said “no it’s not”.

“FASEA in theory is right, but the delivery is brutal. Compliance is just ridiculous,” Mr Johnston said.

“If we keep going in this direction, there will be no one left. They have to back off.”

But, he is hopeful change is imminent.

“Every politician is singing for their super, it’s time to put the pressure on them,” Mr Johnston said.

Similarly, Dr Scott and Ms Visser are confident “the industry will bloom again”.