The Financial Adviser Magazine | Vol 26. Issue 1. by AFA Magazine

Vol 26 | Issue One | March 2022

Official magazine for members of the AFA

Leading the way in 2022 SPECIAL FEATURE Announcing AFA’s Life Company of the Year Awards 2021

ADVICE STRATEGY Shifting the ‘best interests’ narrative

SPECIAL FEATURE Congratulations to Godfrey Phillips OAM

Key dates for 2022 Make sure you pencil in the below dates and keep an eye out for more information on our face-to-face events coming soon!

APRIL

29 April: Applications for AFA Foundation Grants closes

12-16 May: Financial Adviser Exam – Sitting 17

24 May: AFA National Roadshow Perth

MAY

25 May: AFA National Roadshow Adelaide

31 May: AFA National Roadshow Brisbane

31 May: Successful AFA Foundation charity grant recipients announced

1 June: AFA National Roadshow Sydney

JUNE 2 June: AFA National Roadshow Melbourne

JULY

28-30 July: Financial Adviser Exam – Sitting 18

AUGUST

1 August: Financial Adviser Exam – Sitting 18 (cont)

21-23 September: AFA Conference at RACV Royal Pines QLD

SEPTEMBER

NOVEMBER

The Financial Adviser | March 2022

30 September: Final exam deadline for advisers who are eligible for the extension (who had completed at least two attempts prior to 31 December 2021) 3 November: Financial Adviser Exam – Sitting 19

Contents Candice Spence

Professionalism

Advice Strategy

AFA General Manager, Marketing

President’s report

CEO’s report

Shifting the ‘best interests’ narrative

Dear Members,

Policy and Advocacy

One hopes to start the year off on a bright note, however we appreciate for some, early 2022 has not been the case.

Helping your clients succeed with equities

Marketing update

Change is in the air but stay focused on the current reality

Super contributions and considerations for the 2021/22 financial year

Structuring super TPD policies to maximise outcomes

How insurance can help after a cancer diagnosis

At the AFA, our thoughts are with all those affected by the recent floods on the east coast and those with relatives in the Ukraine. If you’d like to support the flood efforts of the Red Cross and St Vincent de Paul please donate at our AFA Foundation donation site afafoundationdonation.com.au The positive aspects to adverse situations are the inspiring stories of humans stepping up to help others in need. This is what financial advisers do every day. Advisers are often the unsung heroes in people’s lives and we need to do more to get this message out there. The challenge is there are so many intangible benefits a client receives from their adviser. It’s up to all of us to share great advice stories whenever we can, and if you have a great story please let us know at events@afa.asn.au At the AFA, we are excited to be getting back to face-to-face events in 2022. As Barbara Streisand famously sings “People who need people, are the luckiest people in the world”. Thus we look forward to seeing many of you in person at both our National Roadshow which kicks off on 24 May, and our National Conference on 21-23 September.

Business Growth

Special Feature

Announcing the AFA Life Company of the Year Awards 2021

Godfrey Phillips OAM

Are you and your team set up for success or burnout this year?

Communities of Practice

Community & Marketplace

More details on both events are featured in this magazine and will be provided in coming weeks.

Multiple mentors make a mark

Please note, we are in the process of updating our website, to improve your member experience. Please bear with us over the next couple of months as we refresh the AFA site.

Let’s talk honestly about women’s safety and economic security in 2022

It’s time to consider pro bono advice – and the benefits for you and your health

Leading with passion

2022 AFA Foundation Grants Program now open for submissions

If you have any questions or suggestions, please get in touch with myself, Mel, Cherie or Will. We are a small team but with incredibly good intention and capability. Best wishes, Candice and the Marketing team

Events 14

AFA National Roadshow

AFA Conference

The Financial Adviser | March 2022

Professionalism

President’s report Sam Perera AFA National President

One of the more pleasant tasks of being your President is the ability to contribute to industry discourse and share my views of the sector. I was recently interviewed by the AFA Gen Next team for their podcast and I felt that the questions put to me are those that may be relevant to our broader membership. I’ve decided to make those questions the substantive content of this article. Very much like the rest of Australia, the AFA team has not had the start to 2022 envisaged, due to the emergence of the COVID variants. This does not prevent us from undertaking our important work including our response to the Education Standard announcement. Responding to contentious issues such as the education changes weighs heavily on the AFA’s Executive as we balance the strong feedback received from both supporters and detractors of the changes along with the broader needs of our members. We also have to keep the consumer at the heart of everything we do. We believe that our final response which advocated for increased recognition of prior learning whilst working towards a goal to have all Advisers tertiary qualified was sensible and considerate of our stakeholders and their needs.

The Financial Adviser | March 2022

In addition to recently meeting with the Minister to discuss our views on the education standards, we reiterated the importance of the Quality of Advice Review (QAR) and were able to provide feedback and receive a briefing on the QAR. Whilst we cannot expect the wholesale change of Chapter 7 (Corporations Act), we are optimistic of changes which seek to remove duplication and red tape that are not client centric. We have requested swift implementation of any positive changes. The AFA Policy and Executive team will be focused on the QAR and will prioritise looking for ways to bring our communities back together with our events. We are mindful there are still a number yet to pass the FASEA exam and will continue to look for ways to support this cohort of our peers.

Professionalism

Will 2022 be a better year for Advisers? A personal goal, and my duty as President, is to help lead the sector’s sentiments and follow through with advocating for the policy settings which are enablers. I would like our focus this year to shift to the tremendous opportunities ahead. In 2019, ASIC’s own research found that 41% of Australians intend to get financial advice in the future. There is almost $3.4 trillion dollars in our superannuation system, the household savings rate in Australia was almost 20% in Q3 2021 and Australians are sitting on billions of dollars in a war chest waiting to find its way into markets. The underinsurance gap is not improving and may have deteriorated due to the introduction of measures such as PYS and PIMF. The above mentioned presents significant advice opportunities encompassing complex subject matters. As Susskind remarked in The Future of Professions, professions were founded and built on complexity. These advice needs will need to be met by experienced and well educated Financial Advisers.

The AFA Policy and Executive team will be focused on the QAR and will prioritise looking for ways to bring our communities back together with our events.

How will the AFA help Advisers and what do you see as the most significant challenges for 2022?

How do we encourage more young people to consider a career as a Financial Adviser?

My sentiments in this article are not intended to ignore the difficult time and emotional drain for our colleagues trying to pass the FASEA exam. Assisting these peers is pressing work and we want to hear from these members and look for individual ways to help them and their unique circumstances. The whole sector continues to battle the regulatory burden and ensuing cost imposts. Even successful practices will be attempting to navigate the 1 Oct 2021 changes which distract us from our most rewarding and impactful work. The AFA will continue to be a strong voice and use the QAR to advocate for the removal of red tape and unnecessary compliance. The regulators and legislators finally seem to be listening to the feedback on the strangulation we are experiencing.

The starting point is to help more Australians understand financial advice. Whilst our profession/ sector encompasses subsectors and specialties, this phenomenon is not dissimilar to other professions who seem to have the wider public understand their fundamental role and vocation. Education and demystification will serve a dual purpose in removing some of the stigmas that may be attached to financial advice as a result of the rogue minority and their misdemeanours over the years.

A sleeper is the discomfort that advice practises may have to face, as they take steps to review their business models. The key metrics of running a financially rewarding practice would have changed for many. Merging, selling, acquiring, specialising in niches, disposing of unprofitable clients are difficult decisions to contemplate and execute. Practices that emerge the strongest will be those that reflect on these challenging questions and position their businesses to adapt to the evolving market.

Having established our bona fides, we need to highlight the benefits of a career in our sector. This, in turn, will encourage more young people to choose a career in this noble profession. We make a meaningful difference in our clients lives, our contributions deal with their hopes and aspirations and are inherently positive. We can also choose to specialise in fields which appeal to our intellect. Those of us that serve our clients with distinction may be remunerated extremely well and can enjoy a large degree of flexibility in our working days. If inclined we can also build businesses, mentor, be involved, and contribute to a sector which is renowned for sharing and its benevolence.

The Financial Adviser | March 2022

Professionalism

CEO’s report Phil Anderson AFA CEO

As we approached the end of 2021, we were increasingly confident that things were starting to get back to some level of normality and looking forward to returning to face-to-face events in 2022. In the middle of December, we were surprised by the Government’s announcement on their consultation proposal on the Education Standard. We also observed with concern the rapidly rising number of COVID 19 cases under the Omicron wave, which seemingly pushed back expectations for an opening up of all borders in Australia. We were also very conscious that 31 December 2021 marked the end of the career for those advisers who had chosen not to attempt the FASEA exam or who had not attempted it at least twice. We wish all those who have left the best for the future. 2022 started with the news that Helen Morgan-Banda had stepped down as AFA CEO and was returning to New Zealand. The Board offered me the opportunity to take on the additional responsibilities of CEO, which I happily accepted. I have been with the AFA for a number of years and firmly believe in the AFA’s core vision and mission. That said, there is a lot of work to do and with the continued uncertainty of COVID over the summer break we have had to reassess our plans for 2022, with a view to hosting our National Roadshow in late May 2022 rather than March.

Education Standard We invited member feedback on the Government’s proposal for a change in the Education Standard, and feedback was what we got, in bucket loads. After arguing for greater recognition of prior learning and experience since 2018, and repeated efforts to advocate this with both FASEA, the Government and any other politician who would listen, we were suddenly in a position where the Government had proposed a position that went much further than we had anticipated and one which generated a great deal of heat and anger amongst different segments of the membership base. This was inevitable and understandable. Those who firmly believe in higher education as a foundation of recognition as a profession, and those who had taken action early and completed or made significant progress on meeting the FASEA Standard, were outspoken in opposition to the change, or at least the scale of the change. Equally, those older members, who were closer to retirement were welcoming the proposal and strongly arguing that they should not need to do any further education. As the level of resistance to the changes became more apparent, not just from individuals, but also other associations and licensees, these experienced advisers became angry.

The Financial Adviser | March 2022

This was never going to be easy, and we knew that we could not keep everyone happy in what we advocated for. In framing our submission, we took account of our objectives for the financial advice profession, and what the best option was to achieve a compromise between the recognition of prior learning and experience and the retention of higher education standards. We put weight on the importance of retaining recognition of financial advice as a profession, which mandates higher education standards, however our solution was one where those with a lot of experience would only need to complete two subjects (one more than what the Government had proposed), however they would come out of it with a tertiary qualification and we would all be able to make the statement that all financial advisers are tertiary qualified. We appreciate that we need to work hard to explain the merits of our proposal and that is what we are trying to do. As we progress into 2022, we are committed to advocating for better outcomes for the financial advice profession and getting back to face-to-face events. The Quality of Advice Review, that the Government is running in 2022, will be a great opportunity to argue for fundamental changes to improve access and affordability of financial advice, but also making it more efficient to run a financial advice practice and to reduce the excessive level of compliance complexity.

National Roadshow and Conference in-person in 2022 As mentioned, we are planning our first National Roadshow since early 2020 in late May 2022. We are also excited to announce that we have booked our National Conference for 21 -23 September 2022, which will be held at the RACV Pines on the Gold Coast. It will be great to get back to a face-to-face Conference at a venue that is so well known by the AFA Community. I look forward to catching up with as many of you as possible as the year progresses.

The Quality of Advice Review, that the Government is running in 2022, will be a great opportunity to argue for fundamental changes to improve access and affordability of financial advice.

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This information is for adviser use only, it does not take into account any personal objectives, financial situations or needs. You should consider these factors, the appropriateness of the information and the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD), if applicable, before making any decisions or recommendations. You can find these on our website at zurich.com.au. This information is current as at October 2021 and may be subject to change. Zurich Australia Limited ABN 92 000 010 195, AFSL 232510 is the issuer of Zurich Wealth Protection and Zurich Active.

The Financial Adviser | March 2022

Advice Strategy

Scott Hoger National Technical Manager, TAL

Shifting the ‘best interests’ narrative The industry-wide change program around Income Protection left many financial advisers considering how the new product constructs fit with providing advice that is in the best interests of the client. With APRA’s intervention to evolve products, so that they are more appropriately based on client needs and claims experience, advisers are reconsidering what their best interests duty looks like.

Understanding a client’s concept of risk and value

Risk mitigation doesn’t always require risk elimination

Personal advice requires advisers to have a complete picture of the client’s goals and motivation to mitigate risk, an understanding of their risk appetite and their ability to fund any advised solution.

In a perfect world, risk mitigation would seek to eliminate all identifiable risks. At its core, Income Protection mitigates the risk of the client losing their regular income due to sickness or injury. It can help to maintain lifestyle and can provide a retirement savings safety net through a regular contribution to superannuation whilst on claim. Though desirable, complete risk elimination is generally not possible, as any increase in risk elimination can lead to an increase in cost now and in the future.

Risk mitigation is a delicate balancing act that requires client input to ensure that any advice and recommendation is appropriate. Advice is provided on a spectrum, with consideration that some clients have a higher risk tolerance (when considering benefit periods for example) in return for a lower cost policy premium, compared with other clients who would prefer to cover the worst-case scenario and will be willing to pay for that additional coverage.

Through the TAL Risk Academy, we have seen a consensus from advisers that in order to meet their best interests duty, they need to provide advice that eliminates as much risk as possible by providing comprehensive advice and products. Planning for this worst-case scenario is in theory logical, but this logic needs to be balanced against other equally important considerations, including an insurers actual claims experience and affordability of the strategy. Take for example the benefit period; planning for the worst-case scenario would dictate advising an age 65 benefit. TAL’s portfolio experience shows that 92% of Income Protection claims are completed within two years of commencing, with only 8% continuing beyond two years. TAL’s statistics also show that a five-year benefit period would provide adequate protection for more than 95% of claimants. This may result in a material long term cost saving compared with a ‘to age 65’ benefit period, but does carry a risk to some clients if the claim goes beyond five years. Advisers acting in their client’s best interests requires a deep understanding as to whether or not that risk is palatable when balanced against other factors, including cost and long-term affordability. The client’s risk profile and concept of value will help to determine a risk mitigation solution and ensure that advisers are providing appropriate advice based on their client’s unique circumstances.

The Financial Adviser | March 2022

Every individual client will have a different perception of how they view risk, and consequently how much risk they are willing to accept in relation to their unique circumstances.

Using a thorough cost-benefit analysis, advisers can empower their clients with the right information so that their clients can consider how much risk they are prepared to accept as it relates to their own risk appetite. An adviser’s best interests duty is focused on the advice given based on the client’s circumstances, and the product simply facilitates this advice.

Building greater client engagement When we consider that an adviser’s best interests duty is intrinsically linked with the requirement to provide appropriate advice, we can begin to shift the ‘best interests’ narrative. By embracing a client’s goals, needs, financial situation and objectives to create greater transparency and engagement, advisers will be better positioned to fulfill their best interests duty; and will be able to continue to support their clients in choosing products that best meet their individual needs and circumstances. For further support visit the TAL Risk Academy at adviser.tal.com.au/risk-academy.

Where do you want to take 2022? You can get there with TAL Risk Academy Through the considerable industry change of recent years, no two adviser journeys have been the same. It’s made access to education that you can personalise to meet your needs even more important, and that’s what you’ll find with TAL Risk Academy. Whether you’re starting a Professional Year or you’re an experienced adviser, our focus remains on supporting your individual education needs, to give you confidence and control over the future of your business and career. Register for TAL Risk Academy today and build a tailored learning plan with over 80 CPD-accredited course options. Learn more at adviser.tal.com.au/risk-academy

TAL Life Limited ABN 70 050 109 450 | AFSL 237848

The Financial Adviser | March 2022

Advice Strategy

Edwina Maloney Director, Platforms AMP

Helping your clients succeed with equities Shares are at the top of many clients’ wish lists, with Australian equities the most widely held asset class, owned by 58% of investors1. While demand is high, it can be difficult for clients to set themselves up for success. So they look to you as their trusted adviser for guidance. But being across a whole universe of Australian equities can be tough. So it’s important to find the right equity trading solution. A managed portfolio can be an efficient way of holding Australian equities that clients recognise and are managed by experts.

Helping advisers stand out from the crowd In an environment where the cost of providing advice is increasing, it’s never been more important to find solutions which not only help you deliver great advice, but also run your practice more efficiently. Many advisers are finding the reporting, transaction and portfolio management capabilities of managed portfolios can make it easier to deliver high quality advice that meets clients’ goals. And their popularity continues to grow, with 44% of advisers now using managed portfolios,2 which account for over 10% of platform investments.3

• meeting Best Interests Duty obligations by aligning the recommended managed portfolio with your clients’ investment objectives, financial situation and needs in areas such as risk tolerance and investment timeframe – in fact, more than nine out of ten advisers say it’s easy to show they’re meeting their clients’ best interests with managed portfolios2. Managed portfolios are transparent, with underlying investments fully disclosed and regular communication around performance. They are cost efficient – for example, MyNorth Managed Portfolios use scale to negotiate discounts so clients can access funds at a cheaper rate than if they had invested outside the managed portfolio. And they can be tax efficient, as clients are the beneficial owners of underlying investments. In managed portfolios with equities, clients aren’t disadvantaged by decisions of other investors which may trigger tax liabilities, as they may have been in a unitised investment such as a managed fund.

Transforming your advice Most advisers say their value proposition has changed as a result of adopting managed portfolios (71%), citing benefits such as: • greater focus on client financial and lifestyle goals (39%) • greater transparency (38%)

Managed portfolios can benefit your practice by:

• outsourcing portfolio construction to professionals (36%)2.

• reducing operational risk as a specialised trading team takes care of rebalancing, trading and monitoring.

As seen during the COVID-19 crisis and the subsequent ongoing instability, managed portfolios can help during market volatility. Most advisers rated managed portfolios as ‘very good’ (55%) or ‘good’ (33%) in terms of freeing up their time to spend educating and reassuring clients2. This is good news for any future market disruption, and it’s a narrative you can leverage to demonstrate your value-add to clients.

• making it simpler to deliver advice by reducing the number of steps, with the investment manager taking responsibility for investment research and portfolio construction and the North team taking responsibility for implementation. • freeing up your time to focus on your role as mentor, spending more time educating clients about investment goals and strategies. • meeting client expectations with clear investment objectives allowing you to align the chosen portfolio with your client’s values to meet their broader needs. • leveraging experts to help clients achieve their goals, including investment managers and specialised trading teams.

Trading equities on North We’ve expanded our range with 23 new equities and listed products managed portfolios from 10 high quality investment managers. To find out more about MyNorth Managed Portfolios visit northonline.com.au/mynorthmp.

• building whole-of-wealth solutions based on broad client goals such as retirement income, asset protection or maximising accumulation. 1 ASX Australian Investor Study 2020 2 Investment Trends February 2021 Managed Accounts Report 3 IMAP Dec 2020 data and Plan for Life Dec 2020 MyNorth Managed Portfolios issued by NMMT Limited AFSL 234653. Information is general advice and does not consider personal circumstances. Consider PDS and TMD available from northonline.com.au before deciding what’s right for you.

The Financial Adviser | March 2022

You’re in good company with equities now in MyNorth Managed Portfolios.

MyNorth Managed Portfolios provide access to equity experts from leading companies like BetaShares, Blackmore Capital, DNR Capital, First Sentier Investors, AMP Capital, Macquarie, Morgan Stanley, Pendal, Quest Asset Partners, UBS Asset Management. It’s a smart and cost-effective way to take client investment strategies to the next level. North. An investment in you. Visit northonline.com.au/mynorthmp © NMMT Limited ABN 42 058 835 573, AFSL 234653 issues the interests in and is the responsible entity for MyNorth Managed Portfolios. Visit northonline.com.au to obtain the relevant disclosure documents and target market determinations before making any decisions.

The Financial Adviser | March 2022

Advice Strategy

Damian Revell Technical Manager, AIA Australia

Super contributions and considerations for the 2021/22 financial year With more than half of the financial year over, it may be a good time to check-in with clients to see how their superannuation contributions are tracking and consider what opportunities remain for them in 2021/22.

impact on your clients’ NCC strategies in the current and future financial years. They also provide an advice opportunity for your clients to maximise their after-tax contributions including a recontribution strategy.

In the last year, the super guarantee (SG) contribution rate increased from 9.5 % to 10%, while the concessional contribution (CC) cap increased to $27,500. These changes are important to consider for clients who are salary sacrificing or looking to establish an arrangement with their current or new employer for the following reasons:

Lower income clients earning at least 10% of assessable income from an employment source may be eligible for a Government co-contribution of up to $500 if they make at least a $1,000 voluntary after-tax super contribution. In 2021/22, the maximum cocontribution is available to clients earning less than $41,112, with a lower amount of Government co-contribution (on a sliding scale) up to earnings of $56,112 per annum. This may provide an advice opportunity and strategy for lower income clients who are looking to accumulate more inside super and partly subsidise the cost of premiums for insurance held inside super.

1 To ensure the amount they are salary sacrificing factors in their employer’s increased SG contributions and they don’t exceed their CC cap. 2 Clients who are business owners with employees need to ensure they are meeting their increased SG obligations which may include themselves as employees receiving wages or salary and/or director fees. 3 Their effective CC cap amount may be higher than $27,500 if the client was to use their carry-forward unused concessional contributions that may have accrued from 1 July 2018. Please refer to the ATO for the carry forward contribution rules and eligibility criteria. For clients who are either making or looking to make after-tax contributions, the nonconcessional contribution (NCC) cap and the Total Super Balance (TSB) threshold have both increased, effective from 1 July 2021. The 1-year NCC cap has increased to $110,000 and respectively, the 2-year bring forward provision has increased to $330,000 with the TSB moving to $1.7m as of 30 June 2021. These changes may have an

Clients may wish to split some of their eligible concessional contributions from the 2020/21 financial year to their spouse’s super. Utilising this spouse split contribution strategy may allow coupled clients to manage their combined Transfer Balance Cap as they near retirement, fund insurance inside super for the receiving spouse, and/or provide increased Age Pension entitlements for the member of the couple who is of pension age and is asset tested. Please refer to the ATO for the contribution splitting rules and eligibility criteria. These are some of the advice opportunities and contribution strategies you could discuss with clients well before 30 June 2022 and beyond. If you would like further information about these or any other strategies, please contact the TECE team at tece@aia.com.

Copyright © 2022 AIA Australia Limited (ABN 79 004 837 861 AFSL 230043). All rights reserved. This presentation has been prepared for financial advisers only and is not for wider distribution. This information is current at the date of this publication and is subject to change. This provides general information only, without taking into account the objectives, financial situation, needs or personal circumstances of any individual and is not intended to be financial, legal, tax, or other advice. You should consider the appropriateness of this information in the context of such factors. AIA Australia has prepared a Target Market Determination which describes the class of consumers that comprise the target market for this product. The Target Market Determination can be sourced at aia.com.au/tmds

The Financial Adviser | March 2022

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FIND OUT MORE

Copyright © 2022 AIA Australia Limited (ABN 79 004 837 861 AFSL 230043). All rights reserved. The life insurance policies relating to Priority Protection and Priority Protection for Platform Investors are issued by AIA Australia Ltd. This information is current at the date of this document and may be subject to change. AIA Australia Ltd takes no responsibility for any incorrect information (by omission or otherwise) contained in this document. This provides general information only, without taking into account your objectives, financial situation, needs or personal circumstances. You should consider such factors and view the Product Disclosure Statement, available at aia.com.au, in deciding whether to acquire or continue to hold a financial product. This document is a summary of the circumstances in which AIA Australia Ltd pays claims under these policies. The payment of claims is subject to the terms and conditions of the relevant product as summarised in the relevant PDS. AIA Australia has prepared a Target Market Determination which describes the class of consumers that comprise the target market for this product. The Target Market Determination can be sourced at aia.com.au/tmds 03/22 – ADV6603D

The Financial Adviser | March 2022

AFA National Roadshow

Join us in a city near you The AFA is back on the road for our face-to-face National Roadshow in most capital cities. Coming together as the AFA community to connect and share is what we do best. At the AFA, we are so excited to be We’re visiting Perth, Adelaide, Brisbane, Sydney and Melbourne. And to help ensure you and your business are on the right track for 2022, we’ll bring you the very latest in policy, education and professionalism. Our half day event will provide you with CPD accredited sessions on: • IDII strategies • Ethics in practice • Economic outlook • and more… You’ll be able to take away practical, actionable strategies and tools from award-winning advisers to manage and grow your business.

So, please take some time out to join us, be inspired by other advice professionals, and together, we’ll help deliver great advice to more Australians. To register or for more information please visit afanationalroadshow.com.au from 4 April 2022.

Perth

Adelaide

Brisbane

Sydney

Melbourne

May

June

The Financial Adviser | March 2022

AFA Conference

See you in September Patricia Garcia AFA Conference Chair

After two year’s without a face-to-face National Conference, it’s really exciting to be heading back to an in-person event. AFA’s favourite Conference location, The Royal Pines on the Gold Coast, is the perfect venue to enjoy informative, relevant and engaging presentations in a relaxed yet vibrant environment. Most importantly, it’s an opportunity to spend time together with peers and friends in the Advice profession over three days on 21-23 September 2022. I’m personally delighted to have been nominated Chair for this year’s Conference and am committed to ensuring we include member input in the development of a valuable program tailored to member needs. We are about to embark on the detailed planning for the Conference and I welcome any speaker, topic or activity suggestions you would like to see at this year’s Conference. Please email our Conference committee at events@afa.asn.au or feel free to contact me personally at patricia@yourvisionfinancial.com.au In the coming weeks I encourage you to visit our AFA Conference website afaconference.com.au as we announce more details about the program and registration information. I look forward to seeing you in September! Patricia

The Financial Adviser | March 2022

Professionalism

Policy and Advocacy Phil Anderson AFA CEO

With the passing of the Better Advice Bill (Single Disciplinary Body, closure of FASEA and changes to the TPB) in October 2021, most of the remainder of the 2021 year was focused on the regulations related to the Better Advice Bill and the legislation for the Compensation Scheme of Last Resort. That was until we got to December, when both the Opposition and the Government made announcements on proposed changes to the Financial Adviser Education Standard. We are expecting 2022 to be very different from previous years, with less focus on regulatory change and more focus on the Quality of Advice Review and other inquiries to guide the next Government in terms of what it might do to improve the regulatory regime that applies to financial advisers. The announcement on the Education Standard proves that both sides of politics are aware of the implications of the recent changes and the decline in adviser numbers. Of course, 2022 is a Federal election year, making it more interesting and unpredictable. As we have entered 2022, and licensees have had the opportunity to update the Financial Adviser Register (FAR) for recent movements,

the full impact of the first deadline for the FASEA Exam has become evident. All those advisers who did not attempt the exam, or who had not had at least two attempts, were no longer able to remain on the FAR and have been removed. We think there are probably 800 – 1,000 advisers who have attempted the exam at least twice, but have not yet passed, and who have received an extension until 30 September 2022. By the end of January 2022, the number of advisers on the FAR sat at less than 17,500, however this number includes time-share advisers and provisional advisers, so the number reported in the media is closer to 17,000. There are seemingly around 2,000 advisers who have passed the exam, who are no longer on the FAR, who could return. The prospect of changes to the education standard will hopefully lead to many of those advisers who did not intend to complete the required study, change their mind and push on beyond 1 January 2026. We will need to keep a close eye on this, along with tracking the progress of those advisers who qualified for the extension of the exam deadline until 30 September 2022.

Government Proposal on the Education Standard We were taken by surprise when on 8 December 2021, Stephen Jones, the Shadow Minister for Financial Services made a speech suggesting that the ALP would look to remove the education requirements for existing advisers with 10 years or more experience. This was soon followed on 16 December 2021, with the release of a policy paper by the Government on proposed changes to the education standard for financial advisers. This Policy Paper set out two new pathways: • Experience pathway – For all existing advisers with 10 years full time experience out of the last 12 years as at 1 January 2026, who had a clean record (no sanctions by the Financial Services and Credit Panel), would only be required to do the Code of Ethics subject. • Qualification pathway – For existing and new advisers, they would be required to do eight subjects in nominated fields of study as part of the completion of a qualification at a degree or higher level, with access to up to two subjects credit under the FASEA RPL Policy (ie. ADFP, professional designations etc). The AFA provided a submission in response to the Policy Paper welcoming the Government’s commitment to reviewing the education standard and to provide greater recognition for prior learning and experience, which was something that we supported and had been advocating in favour of for nearly four years. This proposal divided the adviser community with both strong support for it and also strong opposition to it. In our submission, we proposed a compromise model, where all financial advisers would still need to achieve a tertiary qualification, however based upon a four subject Graduate Certificate and with access to credit, particularly for those with the most experience. We also raised concerns about the Qualification pathway for new advisers, noting that there needed to be core knowledge requirements that applied to all new advisers. In our submission, we set out our objectives and the reasons for the model that we recommended. We would like to see the Government make a decision and enact change before the election is called so that advisers have the confidence to know what they must do.

The Financial Adviser | March 2022

Single Disciplinary Body, FASEA, TPB and the Exam With the Better Advice Bill passed in October 2021, the next key stage, that occurred in December 2021, was the finalisation of the regulations that define such key considerations as the following: • The disciplinary matters that ASIC must refer to a Financial Services and Credit Panel (FSCP). • The disciplinary outcomes that must be recorded on the Financial Adviser Register. • Details of the extension of the FASEA exam deadline, including the new deadline and the criteria of having attempted the exam at least twice. • The education and CPD requirements for Qualified Tax Relevant Providers. On 1 January 2022, FASEA ceased to exist, and financial advisers were no longer required to be registered with the TPB. The matters that must be referred to an FSCP were as expected, and the matters that must be reported on the FAR exclude written warnings or reprimands

and the first sanction where the adviser was subject to a direction from the FSCP. The new tax related CPD requirement for financial advisers is 5 hours, which is to be part of the existing 40 hours per year. The education requirement for Qualified Tax Relevant Providers is a Diploma level Commercial Law subject and an Australian Taxation Law subject, however advisers who were registered with the TPB immediately before 1 January 2022, or who had applied for registration with the TPB before 1 January 2022, would not be required to do these courses. Other existing advisers, will have until 1 January 2026 to complete these courses. Evidently this model did create problems for advisers who were not on the FAR as at 1 January 2022, as they would be required to complete the courses before they could commence providing tax (financial) advice services. Disciplinary matters that are to be considered by the Financial Services and Credit Panel are limited to matters that occur from 1 January 2022 onwards, and

will not address matters that occurred prior to that date, even if the matter comes to light afterwards. In that context, it is not expected that there will be many matters that arise until further into 2022. On Monday 14 February 2022, the Minister announced the appointment of 31 people to the Financial Services and Credit Panel, including two AFA Directors – Samantha Robinson (Treasurer) and Katherine Hayes (NSW/ACT Director). Samantha and Katherine are on the panel as individuals, not as representatives of the AFA. ASIC has now taken over the conduct of the Financial Adviser Exam, but once again through outsourcing to ACER. ASIC have advised that the exam will be held four times in 2022, with the first three to occur before the extended deadline expires on 30 September 2022. The first exam for 2022 has been held over the period 17 – 21 February 2022. The exam results were released on 25 March 2022, with only 32.4% of the 333 candidates passing. The next two rounds of the exam will be held on 12 – 16 May and 28 July – 1 August. The Financial Adviser | March 2022

Professionalism

Policy and Advocacy continued

Compensation Scheme of Last Resort After issuing a proposal paper on the Compensation Scheme of Last Resort (CSLR) in July 2021, the Government tabled the Bill in the House of Representatives on 28 October 2021. The scope of the scheme is limited to financial advice, securities dealing, the provision of credit and mortgage broking. The Senate Economics Legislation Committee have held an inquiry into this legislation, with submissions due by 17 December 2021. A Parliamentary committee hearing was held on 27 January 2022, and the AFA presented at this alongside the FPA and CPA Australia, arguing for the inclusion of Managed Investment Schemes (MISs) and a fairer allocation of costs. The Committee’s report, that was released on 15 February 2022, recommended the Parliament proceed with the Bill in its current form, however the ALP provided additional comments supporting the inclusion of MISs. As part of the Senate

inquiry process, AFCA released data on unpaid determinations since their commencement in November 2018, highlighting that MISs were responsible for more unpaid determinations than financial advice (in terms of both numbers and dollars). The CSLR Bill is yet to be passed in the House of Representatives and with only two more sitting days scheduled for the Senate before the likely Federal election in May 2022, the passing of the Bill is in question. The Government have agreed to fund the cost of the scheme in the first year, which was proposed to start on 1 July 2022. This is the last of the legislative measure from the Royal Commission recommendations, that is still to be enacted.

AFA Member discounts from Education providers

Discounts apply to all current AFA members but maybe subject to change.

Provider

RRP per subject

Discounted price per subject

Deakin $3,525 per subject (when completing a full qualification) $3,937 per subject (for single subject enrolments) $2,996.25 (full qualification) $3,346.45 (single subject)

UNE

$3,338

$2,670.40

Postgraduate courses and single subject enrolments (including Intensive Study Option for the FASEA Bridging Course subjects) offered within the Faculty of Business and Law

Graduate Diploma in Financial Planning (including single unit enrolments and the FASEA Bridging Course subjects)

All

Existing Students

Yes

New Students

Yes

To enrol, contact Deakin at financial-planning@deakin.edu.au 03 9251 7969

To enrol, contact Cynthia Shannon cshanno5@une.edu.au

Eligible courses for discount (FASEA approved courses) Eligible AFA membership categories (Membership must be current)

Discount can be applied to:

Students using FEE HELP (NB: FEE Help only applies to enrolments in a full qualification, not single subject enrolments)

Contact and enrolment details

The Financial Adviser | March 2022

Professionalism

Design and Distribution Obligations October 2021 was a period of huge regulatory reform, with the commencement of the new breach reporting and reference checking regimes, along with Phase two of the APRA IDII Intervention and the new Internal Dispute Resolution regime. Another substantial reform that commenced on 5 October 2021, was the Design and Distribution Obligations (DDO) regime, that requires product issuers to prepare a Target Market Determination (TMD) for each product, which sets out which clients are suitable, what the triggers are for reviewing the TMD, the reporting requirements and guidance on what a significant dealing is. Financial advisers have struggled with the DDO obligations, which come on top of all the other recent reforms, with elevated levels

of confusion about when advice might be outside the TMD and when a dealing is a significant dealing. One important point of concern, has been that advisers can look at client portfolios as a portfolio, such that a small investment in a growth asset is not considered inconsistent with a conservative risk profile. We expect product providers to continue to work with advisers to clarify their expectations.

TAFE NSW

Kaplan Professional

Queensland University of Technology

$2,200

$2,500

N/A

$1,980

$1,800

$1,700

Graduate Diploma in Financial Planning (including single unit enrolments and the FASEA Bridging Course subjects)

Master of Financial Planning; Graduate Certificate in Financial Planning; Graduate Diploma in Financial Planning (including single unit enrolments and the FASEA Bridging Course subjects)

Ethics and Professional Relationships’ bridging course

All

Yes

To enrol, contact campusafa@afa.asn.au for the discount code. Kaplan Course Advisers studentadvice@kaplan.edu.au

To enrol contact: Theresa Waye. Phone 07 3138 1089 Email gsz458enq@qut.edu.au

No (NB: When using FEE Help, discount does not apply)

To enrol, contact Diana Bugarcic (Course Coordinator) DianaBugarcic1@tafensw.edu.au 02 9598 6280

The Financial Adviser | March 2022

Professionalism

Policy and Advocacy continued

APRA Intervention in the Income Protection market The most significant phase of the APRA Individual Disability Income Insurance (IDII) Intervention commenced on 1 October 2021, and in combination with the Reference Product issued by the Actuaries Institute, has led to some very substantial changes to the IDII products. There are now significant differences in the products in terms of income replacement ratio, length of own occupation versus any occupation and benefit offsets, amongst other key terms and features. As we understand it, with advisers still focussed on the finalisation of new business submitted prior to the deadline at the end of September 2021, there has not been a great deal of new business under the new product designs. This is something that we will be carefully monitoring going forward. We were interested to hear statements from APRA at the February 2022 Senate Estimates hearing, that they expect life insurers to develop plans for the transition of clients from legacy products to the new products. Advisers are very conscious of the potential risks in moving clients from products with better features and terms, to lesser quality products, even if the pricing is expected to be more sustainable. We anticipate that there will be limited movement, however we will be seeking to ensure that suitable guidance is provided to support advisers confronted by these issues. The final stage of the APRA Intervention into the IDII product relates to the five year policy refresh, which was deferred until 1 October 2022. This measure requires that policies be refreshed every five years to reflect the terms and conditions of the open products, and also that financials, occupation and pastimes (but not health) be underwritten again at the time of refresh. We have been concerned about the implications of this for clients who are not gainfully employed at the five year point (i.e. maternity leave), and have been seeking confirmation that this issue will be addressed. At the Senate Estimates hearing on 16 February 2022, APRA advised that they had been in discussions with the industry on the issue of potential detriment for clients and were expecting to make a decision by the end of March 2022, as to whether they will proceed with this measure. We met with both APRA and ASIC to discuss our concerns with the prospect for negative client impactions from this reform and were pleased when APRA announced on 24 March 2022 that Tranche 3 would be deferred for at least 2 years.

The Financial Adviser | March 2022

2022 will be a very different year With so much change over recent years, we are looking forward to a more stable year in 2022, with a focus on the Quality of Advice Review and the real prospect for changes that will benefit both the financial advice profession and clients. The change in the political environment is also an important development, as evidenced by the changes in policy positions on education. This is all coming in the context of 2022 being an election year. Importantly, however the Minister now has the power to fix other important FASEA issues such as the Code of Ethics (particularly Standard 3), the Professional Year and elements of the CPD requirements. We will advocate for further changes in this space in the lead up to the election and beyond. We will be carefully watching further developments with the Compensation Scheme of Last Resort legislation and the early signs of actions derived from the Single Disciplinary Body. We will also be very focussed on how we can help those members seeking to pass the financial adviser exam, before the 30 September 2022 deadline. 2022 will be a different year to those we have recently faced, but nonetheless likely to be a very busy one. We remain optimistic that this will be a year of positive change, and one that helps to rebuild support for advice and the passion for being part of the profession.

As always, we welcome your feedback and input on policy matters by emailing us at policy@afa.asn.au.

We were interested to hear statements from APRA at the February 2022 Senate Estimates hearing, that they expect life insurers to develop plans for the transition of clients from legacy products to the new products.

WHAT’S YOUR PATH? Choosing whether to join a licensee or to self-license in the new age of advice DOWNLOAD THE WHITEPAPER Visit www.centrepointalliance.com.au/afa/navigate

MetLife offers Day 1 Partial for all occupations. metlife.com.au/advisers

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The Financial Adviser | December 2021

The Financial Adviser | March 2022

Advice Strategy

Fabian Bussoletti Manager – Product Technical & Regulatory Change MLC Life Insurance

Structuring super TPD policies to maximise outcomes When deciding to hold Total and Permanent Disability (TPD) insurance cover inside super, a common concern is how much tax clients could pay if they receive a benefit. One way to address this concern is by considering the TPD policy ownership options available within super. Holding TPD cover under a “risk-only” super policy, separate to a client’s accumulated super benefits, is one way that offers potential advantages.

Potentially greater tax-free uplift

Uplift available when retaining proceeds in the super system

If your client receives a lump sum benefit from a taxed super fund and is:

While individuals will likely want to receive at least some of their TPD benefit as a lump sum to meet their immediate needs, it’s not the only option available. Some other options to consider include:

• Aged 60 or older, they won’t pay tax on their TPD benefit. • Aged between preservation age and 60, they benefit from the low-rate cap, currently $225,000. Further, where the benefit is a lump sum disability super benefit, clients will typically benefit from an increase to the tax-free portion (tax-free uplift) of their benefit according to the following formula: Days to retirement Amount of benefit

Service days + Days to retirement

As a result of this formula, the tax-free uplift will be greatest for: • Younger individuals (i.e. those with a larger number of “days to retirement”), and • Individuals with shorter eligible service periods (ESP). Where TPD cover is held under a risk-only super policy, the ESP typically commences on the policy start date, which may be much later than the ESP in an individual’s super accumulation account(s). The larger tax-free uplift resulting from having fewer service days is one of the key benefits of holding TPD cover under a riskonly super policy. Note: Where a risk-only super policy has linked death cover, a later ESP may result in a larger untaxed element being created where a death benefit is paid to a non-tax dependant beneficiary. Technical tip: Paying premiums via rollovers from another super fund will result in the start date of the source fund (if earlier) being transferred into the riskonly policy, impacting the ESP.

The Financial Adviser | March 2022

• Moving claim proceeds to their accumulation fund. This strategy potentially shelters benefits from the Centrelink means test. • Using the benefit to start a disability super pension. Investment earnings are tax-free and your client benefits from a 15% tax offset on pension payments. Importantly, the tax-free uplift is only applied to lump sum benefits (which includes rollovers) – it’s not applied on starting a pension directly from an accumulation account. This highlights another benefit of holding TPD cover under a risk-only super policy. That is, in order to retain proceeds in the super system a rollover is required – triggering a tax-free uplift calculation. Example: Craig (50) has $500,000 of TPD cover under a risk-only super policy. The policy was started five years ago. In his accumulation fund, he has an ESP that dates back 30 years. He recently lodged a valid TPD claim under his insurance policy. Craig decides to roll the proceeds from this TPD benefit over to a new fund to start a disability super pension.

Analysis The tax-free portion of the rollover will be: $500,000

15 years (5 years + 15 years)

= $375,000

Therefore, 75% of his pension payments will be tax-free. The remaining 25% will benefit from a 15% tax offset. Had Craig held this cover within his accumulation fund, he wouldn’t have received any tax-free portion as there was no lump sum benefit paid. Alternatively, if he rolled his benefit over to another fund to start a pension, then given the longer ESP in his accumulation fund, the tax-free portion would only have been: 15 years $500,000

(30 years + 15 years)

= $166,667 (or 33%)

Conclusion Structuring TPD cover under a risk-only super policy can provide potentially significant tax savings when compared to holding cover within an individual’s accumulation fund. As such, it should be a key strategic consideration for advisers when recommending TPD inside super.

Advice Strategy

Belinda Nicholson Head of Claims Management, Life Insurance, BT

How insurance can help after a cancer diagnosis Despite the great strides that have been made towards preventing and treating skin cancer in Australia, sadly we still have one of the highest rates of skin cancer in the world. Melanoma March is a national fundraiser event which aims to raise awareness and funds for research, to reduce deaths caused by melanoma to zero – and the event’s organisers believe this goal can be reached over the next several years. 1 While a cancer diagnosis is never good news, medical research and treatment are continuing to lead to better outcomes.

Did you know:

Term Life Insurance

According to Cancer Australia, individuals diagnosed with melanoma of the skin have a 92% chance of surviving for five years compared to the general Australian population.2

Term Life insurance policies pay a lump sum benefit if the insured person passes away, or suffers a terminal illness.

The Melanoma Institute of Australia says that some recent medical advances have tripled the life expectancy for advanced melanoma patients.3 Life insurance policies play a crucial role in financially supporting individuals and their families when they are impacted by cancer, by providing funds that can be used in whatever way they need. A number of different insurance options are available, depending upon an individual’s particular needs and circumstances. In the year to 30 September 2021, BT’s life insurer4 paid a total of more than $491 million in insurance claims. The majority (67%) of all claims paid under Living Insurance (also known as Trauma insurance) policies were for cancer, 61% under Term Life policies.

Living Insurance Living Insurance provides a lump sum benefit when an individual is diagnosed with cancer. The average claim payment made under all BT Protection Plans Living Insurance policies in the year to 30 September 2021 was $212,000. Clients can choose how to use the funds they receive, whether it’s for costly medical bills, paying off debts, or to cover other living expenses.

The average claim payment made under all BT Protection Plans Term Life policies in the year to 30 September 2021 was $166,000. This type of insurance can help ensure that the client’s family (or their nominated beneficiaries) can still have the lifestyle they planned for, whether it’s paying off debts such as mortgages, or covering costs such as children’s education and other living expenses, in the event of the client’s death or terminal illness.

Income Protection Insurance Income Protection (IP) insurance pays a monthly benefit to an individual when they are unable to work due to their medical condition. A variety of additional benefit options can be included with this insurance to cover other specific needs. For example, a lump sum benefit may be accessed through a built-in trauma benefit as part of some comprehensive IP policies. Financial advisers play a key role in supporting an individual to decide on which insurance option and level of insurance cover are most suitable for them. Everyone’s circumstances are different. Being a part of the life insurance industry that plays a key role in supporting people when they receive a diagnosis of cancer, we want to ensure that people are educated on the importance of life insurance and the benefits that come from having appropriate and adequate insurance. This month being Melanoma March, it’s a great opportunity for us all to be reminded of the importance of having the right insurance in place in the event that the unexpected happens.

1 Melanoma Institute of Australia: https://melanomamarch.org.au/cms/about 2 Research from 2013–2017 period by the Australian Institute of Health and Welfare, cited by Cancer Australia, Australian Government: https://www.canceraustralia.gov.au/cancer-types/melanoma/statistics 3 See footnote 1 4 BT’s life insurer, Westpac Life Insurance Services Limited ABN 31 003 149 157 AFSL 233728 (WLISL), paid $491,812,653 in claims during the 2021 financial year (i.e. October 2020 to September 2021 inclusive). Figures have been rounded to the nearest $100,000 and are based on the total amount paid during the financial year. The percentages reflect the proportion of claims paid for each benefit by dollar value. Past claims payment statistics are not an indicator of future claims payments. Please note that these figures exclude claims paid for Westpac Group Plan insurance policies. View full disclaimer here: https://www.bt.com.au/content/dam/public/btfg-bt/documents/professional/marketing-documents/clean-life-insurance-and-cancer-afa-march-2022.pdf

The Financial Adviser | March 2022

Professionalism

Marketing update William Burton AFA Membership and Marketing Manager

The eagle-eyed among you will have noticed some changes to the AFA branding in recent months. The AFA Marketing team have been working hard behind the scenes to simplify and refine the brand to create a united voice for the association. We are delighted to share the below with you, refreshed logos for our Communities to bring them in line with the AFA’s approach in 2022. In the coming months you will notice further changes to both our website and marketing collateral and we hope you like the re-freshed look and feel. We have also taken this opportunity to tweak the Genxt name to Gen Next to provide clarity around the brand’s meaning. Our community is inclusive for all up and coming advisers and we feel the change in name better reflects its purpose.

New community chairs We’re delighted to welcome both Ashley Mahadeea and John Cachia to National Chair roles. The AFA thanks both Charlie Green and Karen Walmsley for their dedication to the AFA over the years. Pleasingly both will remain active within the AFA community space.

Ashley Mahadeea

John Cachia

Gen Next National Chair

Practitioner National Chair

The Financial Adviser | March 2022

Professionalism

Darren Steinhardt Founder and Managing Director, Infocus

Change is in the air but stay focused on the current reality While there seems to be a shift in sentiment around regulation and perhaps greater reflection from the regulators on “why”, it’s a little too soon to be celebrating just yet

practices in their efforts to achieve business growth and development. The road ahead is long, but I can’t help but be encouraged by some of the most positive signs we have seen in a number of years.

The current environment we have is the one that we will need to continue to operate in for the foreseeable and though the pendulum of regulatory balance seems to have perhaps stopped in its outward trajectory, it’s certainly not headed back to the centre just yet.

The need for Australians to access quality financial advice has not lessened, and ultimately, we need to see regulatory initiatives that result in outcomes that benefit clients, not make things harder or more complex for them. In the meantime, we remain sharply focused on how we can do things more efficiently for our advisers and their clients despite the current landscape. And when the pendulum does eventually head back to the centre, we will all enjoy it all the more.

Although we might take a moment to enjoy the prospect of positive and meaningful change, it’s important not to lose sight of what it will take to continue operating, and ideally thriving, in the current environment. For advisers, this means remaining vigilant with your compliance and seeking greater efficiencies that enable you to continue serving your clients effectively. For AFSLs, we must continue to apply pressure and advocate for common-sense change, and support our

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Infocus is an innovative partner of choice for high caliber financial advisers. Find out more: 07 5406 5000 | join@infocus.com.au

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If not, maybe it's TIME FOR A CHANGE. Contact your Synchron state manager today.

The Financial Adviser | March 2022

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Ian Knight (SA/NT/TAS) 0419 311 158

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Synchronised Business Service Pty Ltd

ABN 33 007 207 650 AFS Licence No 243313 65 Palmerston Crescent, South Melbourne Vic 3205 www.synchron.com.au

Community & Marketplace

Natalie Kleibert Deputy Chair PFAN

It’s time to consider pro bono advice – and the benefits for you and your health Pro bono financial advice sounds like a good thing to get involved in. Using the same skills you use in your everyday job as a financial adviser to help people in need, but not expect anything in return, is indeed a great way to contribute to the greater good. But what if there are other powerful benefits to generously providing your time and expertise through pro bono work, such as improved mental health, a renewed passion for your career, and that giving your time can give you time? Recent studies have shown the positive consequences of generosity for givers. Generosity has especially strong associations with psychological health and wellbeing; such as greater quality of life, greater vitality, and selfesteem. Volunteering one’s time and expertise may also change how people view the world, making them value cooperation, interdependence, and their own good fortune. Doing good for others who need help provides a natural sense of accomplishment and a sense of pride. The better you feel about yourself, the more likely you are to have a positive view of life and your future goals. Financial advice is a career that is dedicated to helping people. The numbers and spreadsheets are usually the easy part. The gratification is that you are building relationships, helping human to human. For the most part, your business proposition is likely focused on a certain cohort or demographic within the community, in which you have experience or specialty; which is great for business and building a strong reputation. Working within different communities exposes you to new perspectives, issues, and challenges that may be remote from your experience. This is a great way to build awareness around the diversity of human experience and need. It can also stretch your thinking to more creatively hone your expertise across areas such as communication and the process of advice delivery. Putting a fresh viewpoint on how your skills can benefit others can help bring additional meaning and purpose to your life, and reignite your passion for financial advice.

Generosity has especially strong associations with psychological health and wellbeing; such as greater quality of life, greater vitality, and self-esteem.

Common questions around getting involved in pro bono work centre around how much time does it really involve? After all, just finding a happy balance between ‘normal’ work and life is a challenge for many. While the actual time that people have in a day cannot be increased (everyone gets 24 hours), interesting research has found that people’s subjective sense of time affluence can be increased when spending time on others. This research compared spending time on other people with wasting time, spending time on oneself, and even gaining a ‘windfall’ of free time. It found that spending time on others makes people feel highly effective and capable. That same duration of time is perceived as longer when more has been accomplished, when it is ‘fuller’. So, spending time helping others, may make you feel like you have done a lot with your time - and the more you feel you have done with your time, the more time you feel you have. We think it’s time you consider pro bono advice. And the time you need to devote to helping need not be onerous. Just taking on one case a year will make a life-changing difference to a person in need, and many advisers taking on one case a year helps a whole community. For example, Australia’s multiple sclerosis (MS) community is in need. Every week, 10 people are diagnosed with MS, three in four are women and the average age is between 20 and 40 years old. Some of these individuals are not able to afford or access the valuable benefits that financial advice delivers. That’s why Pro Bono Financial Advice Network is dedicated to helping connect these individuals with the dedicated and generous advisers in our network who give their time to help. Join us and our mission to improve the financial wellbeing of Australians living with MS through providing pro bono financial advice. The more advisers we have as part of PFAN, the more communities we will be able to serve.

Visit probonoadvice.com.au to find out more

REFERENCES Mogilner,C.,Chance, Z., & Norton, M. (2012), Giving time gives you time, The Wharton School, University of Pennsylvania; Yale School of Management, Yale University. Allen, S. (2018), The Science of Generosity, Berkeley University The Greater Good Science Centre

The Financial Adviser | March 2022

Special Feature

Announcing the AFA Life Company of the Year Awards 2021 We are delighted to bring you the winners and finalists of the AFA Life Company of the Year Awards 2021. AFA partners with Plan For Life and Beddoes Institute on the Life Company of the Year Awards, which celebrate excellence in service, product and support delivered to advisers and their clients. They are the leading annual recognition for retail life insurers, annuities and investment bond providers in Australia. AFA President, Sam Perera, said, “The AFA congratulates TAL Life on winning the platinum award, and all the winners and finalists of individual awards, who continue to support and innovate within the life insurance sector. Most important is the ongoing role they play in providing certainty and security to millions of Australians, which has never been more important than today.” The categories for the Awards include the overall Platinum AFA Life Company of the Year Award and individual product awards, offered in conjunction with Plan For Life, and the client service team awards in conjunction with the Beddoes Institute.

Thanks to our partners

Congratulations TAL

The Financial Adviser | March 2022

Special Feature

The full list of winners and runners-up are:

Category

Winner

Finalists

TAL

• MetLife

Risk Insurance Results Overall Platinum

• NEOS Life • PPS Mutual Service Quality

NEOS Life

• TAL • AIA

Term/TPD

Trauma/Critical Illness

Income Protection

Risk Product Innovation

MetLife - Protect Life Cover Plan

• TAL - Accelerated Protection Life Insurance Plan

NEOS Life - Protection Critical Illness Plus Cover Plan

• TAL - Accelerated Protection Critical Illness Premier Plan

TAL - Accelerated Protection Income Protection Premier Plan

• PPS Mutual – Professionals Choice Income Protection Insurance Plan

PPS Mutual

• Profit Share arrangement with policyholders which resulted in a doubling of profit to $2.6 million, announced in 2021

AIA

• Australian Unity

• NEOS Life - Protection Life Cover Plan

• MLC - Insurance Critical Illness Plus Plan • Clearview – Life Solutions Trauma Plus Plan

• NEOS Life - Protection Income Protection Plus Plan • MLC - Insurance Income Protection Platinum Plan

Investment Bond Results Investment Bond

• Futurity

Annuity and Income Stream Results Overall Annuity Provider

Challenger

• AIA

Long Term Income Stream

Challenger

• AIA

Short Term Income Stream

AIA

• Challenger

Annuity Innovation

AIA

• Lifetime Guaranteed Income - deferred

NEOS Life

• ClearView

Client Service Team Awards Underwriting Team

• MetLife • PPS Mutual Claims Team

AIA (incl. CMLA)

• ClearView • TAL • Zurich (incl. OnePath)

BM/Business Support Team

NEOS Life

• ClearView • PPS Mutual • MetLife

The Financial Adviser | March 2022

Community & Marketplace

Olivia SarahLe Lacheur AFA Foundation National Chair

2022 AFA Foundation Grants Program now open for submissions The AFA Foundation committee invites AFA members to nominate a local charity, which may not otherwise receive funding, to receive a grant. We encourage our members to nominate a charity in their local community and make a real difference at a grass roots level. This is an annual opportunity for AFA members to make a meaningful difference to their local communities. In 2021, the AFA Foundation awarded grants to nine charities across Australia. Many were focused on service delivery and support to those impacted by food insecurity, mental health, unemployment and shelter. NSW: Great Lakes Womens Shelter

glws.org.au

Mid north coast NSW charity assisting victims of domestic and family violence with food, necessities and housing support.

NSW

NSW: Lifeline Harbour to Hawkesbury

lifelineh2h.org.au

Lifeline suicide prevention telephone counselling for the Sydney Harbour to Hawkesbury region. QLD: Angels Community Group

angelscommgroup.org.au

Bundaberg based organisation providing school lunches, food hampers and Christmas hampers to those suffering food insecurity and hunger.

QLD

QLD: Inspiring Brighter Future Foundation

inspiringbrighterfutures.com

Inspiring Brighter Futures Foundation (previously known as Fair Go Australia Foundation) is a non-profit organisation offering well-being mentoring programs to disadvantaged people. SA: Pathway community Centre Incorporated

Facebook/Pathway Community Centre

Food and shelter for migrants and lower socio-economic residents.

SA: Tutti

tutti.org.au

Tutti are well known in Adelaide for their choir. Tutti participants have disabilities and enjoy the Tutti arts programs that allow them to use their creative capabilities. VIC: C-Care

VIC

ccare.org.au

Build community through food, friendship and volunteering to address food insecurity and social isolation across Melbourne. WA: Ngoongar Mia Mia

noongarmiamia.com.au

A First Nation controlled entity focussing on socially and culturally appropriate housing that is also affordable to address issues of consistent housing for first nations people.

WA: Dress for Success Perth PERTH

perth.dressforsuccess.org

Empowers women to achieve economic independence by providing a network of support, professional attire and the development tools to help women thrive in work and in life.

In total, $20,000 was granted to these Charity Partners. Thank you to all advisers who nominated charities for consideration in the 2021 grant round. 30

The Financial Adviser | March 2022

Community & Marketplace

2022 AFA Foundation Grants are now open

The grant application form includes the following fields:

Nominated charities must be registered as a Deductible Gift Recipient (DGR). Charities and applications are assessed by the AFA Foundation Committee and the AFA Executive. Grants representing a minimum of $2,000 are awarded to successful recipients. The total number of recipients depends on the volume and quality of applications, and available funds.

• Name of DGR charity

AFA Foundation Chair, Olivia Sarah-Le Lacheur, said “charities have seen demand surge due to COVID and the impact it has had on people, business and the community. At the same time, donations have contracted, and funding is harder for small charities to source. What better way could an AFA member serve their local community than spending a short amount of time completing an AFA Foundation Grant application form to potentially secure funds that will make a difference to local people? I encourage AFA members to participate in their community efforts to revive and thrive by completing an application form. Look at what a difference this made to the recipients of the 2021 Grants.” Members have until 29 April 2022 to nominate their local charity via a one-page application form, available at the following link: afa.asn.au/foundation-grants-2020-recipients The members must use the Foundation’s grant application form to submit their application. Applications submitted via any other means will not be considered.

• AFA Member name • AFA Member state • Website and social media addresses for the DGR charity • Confirmation of DGR status (as per the Australian Government’s Australian Business Register website) • Contact name at the DGR charity • A brief description of why the member is nominating the organisation to receive funding. Details of specific projects can be provided, along with a specific budget request for consideration. • Confirmation that the member will be the local AFA contact point for the organisation, for a period of 12 months, should they be successful in receiving a grant. (Note: this is for the purposes of following up on the grant, how the funds have been used and what the impact has been, to share with other members via the AFA website or adviser magazine). Applicants should note that should a grant application be unsuccessful in the year it was submitted, they can resubmit the following year using the current grant application form. Previously submitted applications will not carry forward to the next funding round. Members who need assistance in completing the form can contact their state-based Foundation representative. Current representatives are listed on the AFA website, under AFA Foundation. Successful recipients will be advised by 31 May 2022.

AFA Foundation Partners AIA and OnePath Life financially support The AFA Foundation and our 2022 Grants Program. Thank you AIA and OnePath Life for joining us in our mission to give back to the local community and support causes that mean the world to our members. For 15 years the AFA Foundation has supported the work of charity partners through fundraising, awareness, and in-person support. Demand for services has never been higher, so the ongoing support of the AFA community makes a real difference to real people. Contributions are accepted from AFA members, partners and nonmembers. If you would like to make a donation to the AFA Foundation please visit afa.asn.au/about-us/afa-foundation

The Financial Adviser | March 2022

Special Feature

Godfrey Phillips OAM Russell Collins

In June last year the announcement of the annual Queen’s Birthday Honour List included the award of the Medal of the Order (OAM) to Godfrey Phillips for service to hockey and financial services.

When the Medal was presented to Godfrey on 9 February this year at Government House, a major part of the award citation related to Godfrey’s involvement in the sport of hockey, which included at the national representative level from 1968 – 1972 and then involvement in every aspect of the sport at Sydney, state and national levels until quite recently. Within the balance of the citation mention was made of Godfrey being the “recipient of the Michael Murphy Award in 2017, The Association of Financial Advisers highest honour in recognition of Lifetime Achievement for extraordinary service to the Association, its members and the financial advice industry.” As a personal friend of Godfrey’s for decades, I would like to highlight just some areas of his contribution to the AFA during that period:

Passion

Group continued to work with ASIC through to the introduction of the ground-breaking Financial Services Reform Act 2001. Since that time the AFA has continued to be a respected stakeholder in all FSI-related regulatory and legislative considerations.

Also included in the OAM citation was reference to his deep involvement with an international Financial Adviser Association – the Million Dollar Round Table (MDRT), The Premier Association of Financial Professionals.

Mentoring

Godfrey is a 38 year Qualifying, Life and Honour Roll Member of MDRT. He has served on numerous MDRT committees and has been a regular speaker at MDRT Meetings. He has also represented MDRT as an Ambassador at international conferences.

During the last 30 years Godfrey has developed an industry profile as a leading Mentor for both newer and experienced advisers by willingly giving of his time to help them develop long-term relationships with their clients by: • Gaining respect from their clients – through his examples of integrity, trust, reliability and commitment. • Placing clients’ interests first – the cornerstone of every client relationship, supplemented by an ongoing professional service that exceeds their clients’ expectations.

His passion for the profession and the industry expressed in:

• Highlighting the importance of ongoing self-education to become the best advisers they are capable of being.

• Representing the AFA in becoming a highly respected industry voice – both within the financial services industry (FSI) and the Australian Regulators and Parliamentary Committees.

• Emphasising professionalism – and its importance in gaining public recognition and respect for the value-added professional role that advisers provide within the FSI.

• Dedication to mentoring numerous individual financial advisers – particularly highlighting the importance professional integrity plays in their interaction with clients.

Contribution to AFA

AFA Industry representation In 1996 The Wallace Report on the Australian Financial System led to the establishment of two Financial Regulators – ASIC & APRA. In the late 1990s, financial adviser practitioners within the FSI faced a very difficult period of reform. In 1999 Godfrey was appointed by ASIC as Convenor of an Advisory Group of highly experienced financial advisers to work with it as a Voice of Experience – specifically in providing input as part of a major reform within the FSI. The Advisory 32

The Financial Adviser | March 2022

Personal Godfrey was born in India and emigrated to Australia with his family in 1966. He is married to Beverly (also his business partner) and they have four adult children and seven grandchildren. Their two youngest children, Matthew & Yasmine have represented New South Wales at senior state level. Personally, I believe Godfrey is a man of outstanding character and integrity, a credit to the Australian Financial Services Industry and much admired because of his pursuit of excellence in everything to which he commits himself.

• Service – in addition to running his own very successful financial advisory practice, for decades Godfrey has devoted countless hours to serve on multiple AFA committees. • Volunteering – Godfrey’s high profile has been very successful in influencing other members on the value of volunteering. His motto: “by giving you receive!” • His leadership qualities have been constantly utilised by the AFA in developing their very successful annual conferences and mentoring programs. • Ambassador – Godfrey has spoken at numerous AFA conferences here in Australia and other FSI conferences in New Zealand, North America and Asia. Godfrey Phillips and Kerry Chikarovski

Communities of Practice

Multiple mentors make a mark My personal journey Nathan Morgan Business Development Manager, IOOF Holdings Ltd

If there’s an area of personal growth that you’re interested in, we believe we can find you an appropriate Mentor to enrich your career development.

My first experience with mentoring is one I didn’t recognise at the time. It occurred when I got my start as a BDM. The business was in a growth phase, and I was fortunate to work with an experienced State Manager who allowed me to play to my strengths. His mentoring style was that of a ‘coach’ and he was the perfect choice for the business at that time. One of the great things he did for me was introduce me to key people in the industry. The business hit the maturity phase and I began working with a new State Manager. My new manager was more of a ‘strategist’ and, again, he was the right person for the business at that time. He was studying an Executive MBA and he would often share the insights with me that he felt were relevant. I found these insights invaluable, and it eventually led me to complete my own MBA. However, like his predecessor, my State Manager encouraged me to forge my own path rather than try to make me in his image. Unfortunately, the business went into the decline phase although I wasn’t experienced enough to know it at the time. I was offered the opportunity to step up to the role of State Manager and I felt that I was ready. However, it was a very challenging period for the business and that didn’t stop management from having high expectations about results. I appreciated the mentoring that my former managers had provided and decided that I should find a new mentor to guide me. That’s when I took part in my first formal mentoring program. I was matched with a financial adviser who had prior experience as a State Manager so he could empathise with my plight. It was great to have an impartial mentor who I could open up to and who was willing to listen. At one of our early meetings, he handed me an article on “How to manage up”. It was such a simple gesture, but it made me more aware of how I could take control of my situation. More than just being my sounding board, my mentor helped me to discover a way to better communicate with my manager.

The AFA Mentoring program It was partly due to these three mentoring experiences that I became involved in the AFA Mentoring Program. The purpose of the program resonated with me. As a young State Manager, I had learned a lot from the many experienced advisers that I would meet. At the same time, I was encountering many newer advisers who I felt would also benefit from sharing in that knowledge and experience. Pleasingly, the participants in the AFA Mentoring Program over the past fourteen years have often spoken highly about their experience. ‘Mentors’ feel the satisfaction that they are guiding the future of financial advice. Many ‘Aspirants’ have returned each year to experience new learnings from different Mentors. It’s now a national program and each year we work to match all the Aspirants with our list of quality Mentors. We have AFA Award winners, business coaches, and retired advisers - each with their own unique perspective. If there’s an area of personal growth that you’re interested in, we believe we can find you an appropriate Mentor to enrich your career development.

Invaluable guidance for new and aspiring advisers So, if you are a new or aspiring adviser or if you have just started your own financial advice business, perhaps you should consider joining the AFA Mentoring Program as an Aspirant. To find out more details about this year’s program, check out the AFA Mentoring Program page on the AFA website and register your interest. Your local state facilitator will then contact you. I was lucky to have three very different mentors at the start of my career who each provided me with a different perspective. All have impacted me positively in their own way and empowered me to choose my own personal development pathway. As we rapidly move towards becoming a wellrespected profession, it’s great to know that the AFA Mentoring Program is broadening the experience base of emerging advisers and contributing to their professional development.

The Financial Adviser | March 2022

Community of Practice

Dawn Thomas AFA Inspire National Chair

Let’s talk honestly about women’s safety and economic security in 2022

The facts are disturbing

What can we do as a community?

One woman is killed every nine days due to domestic violence. A 2016 Australian Personal Safety Survey (PSS) found that approximately one in four women have experienced violence by an intimate partner. Financy Women’s Index (FWX) estimates that it will take 59 single women over the age of 55 are the fastest growing demographic of people living in homelessness. One in four women have experienced emotional abuse, and 48% of those women (or 812,000 women), have

impact if she ends up being under-insured, having less in superannuation and not being invested in the appropriate

70,000 women were coercively controlled into making withdrawals from superannuation under COVID-19 early release rules. We should be honestly talking about the state of women’s safety and economic security. Women can end up vulnerable at retirement due to life factors such: as unpaid caring duties; the gender pay gap; age discrimination once someone does return to work; cost and availability of childcare; casual/part time work; and relationship breakdowns. Women’s superannuation balances on average are half of that of men. Women face a motherhood gap in superannuation, while men experience a fatherhood premium in superannuation balances. Two thirds of caring duties are carried out by women. A six-year break for a 30-year-old on $50,000 a year creates a $77,000 loss of superannuation balance at retirement.

Standard 6 of FASEA Code of Ethics instructs us to consider the broader impacts of our advice on clients and Standard 6 asks us to act in the best interests of our clients. What are the broader impacts on your female client if she experiences life events such as divorce (50% rate of divorce) and taking

Everyone should learn more about the economic and safety issues that women face. Advisers like Tim Henry from Aspire planning are investing in understanding more about the economic challenges that are unique to women. His practice has become a sponsor of Financy Women’s Index.

Support the people in your business. Pay them what they are worth. Invest in their development and support them when they come forward with raising instances of things like bullying and sexual harassment. For the much needed diversity the for marginalised groups like women, indigenous Australians and the LGBTQ+ community, to thrive in.

industry having the biggest gap of 20%. Gendered Violence Research Network states that research suggests that economic abuse is prevalent as a core feature of coercive control in most domestic abusive relationships. Economic abuse is insidious because it’s seen as an invisible form of abuse despite

available to assist women facing this. Your Toolkit: yourtoolkit.com.au, is a powerful resource to refer women to. Read resources from places like the Gendered Violence Research Network.

separate from a partner who uses violence. Economic options for women facing domestic violence. The role of a ﬁnancial adviser is important. The Financial Advice industry plays a pivotal role in Australia’s 2022 International Women’s Day theme is Changing Climates: Equality today for a sustainable tomorrow – a theme that recognises the contribution of women and girls around the world, who are working to change the climate of gender equality and build a sustainable future. 34

The Financial Adviser | March 2022

Flexibility helps everyone: men equally should be supported in playing a part in their family’s domestic life. Supporting all unit and the individual to achieve progression in their careers while still supporting family life.

Achieving safety and economic security for women and closing the gap of gender inequality should be a priority of everyone in the community. Let’s be honest and start making a sustainable change.

Community of Practice

Leading with passion It’s an honour to be writing my first article as the National Practitioner Chair of AFA, an organisation I have been a member of for many years since commencing my career as a financial adviser back in 2009, aged just 20. John Cachia AFA Practitioner National Chair

For those of you who know me, you will know my passion for financial advice. I began working in the financial industry in 2003, at age 14 and soon fell in love with the profession as I could see that, when delivered with integrity and strategy, financial advice can change the lives of everyday Australians and create intergenerational wealth for those for whom it wouldn’t otherwise be possible. My personal vision and the vision of the association are closely aligned: we empower financial advice professionals to transform the lives of Australians through quality financial advice. Bringing this vision to life involves every individual member of the association and I am looking forward to working with members to achieve this. I am excited to be working with all the communities of practice that encompasses all practitioners as well as, specifically, the Gen Next, Inspire, Pulse and Foundation. I’m enjoying getting to know the community and trying to be involved as much as possible. It’s through this collaboration across the community as well as the support of the association’s partners that I see AFA going from strength to strength in 2022 and beyond. One of the key roles of the National Chair is to be the direct line between practitioners on the ground and to the board. The first action in my role was to appoint committee members into the national practitioner community including Vice-Chair, Deline Jacovides, who will be working with myself and the leadership team of the AFA. We are your advocates to all governing bodies, and I intend to ensure that our message is heard loud and clear. To initiate this, I’ve assembled a collaborative team that will start conversations, listen to the voices of our advisers, develop insights into issues and innovations and facilitate positive change to our profession so that we continue helping Australians to secure and protect their financial future. Our goal is to represent the collective voice of all practitioners within the association while ensuring that each individual feels heard. I understand the commitment our practitioners have to the progression of our profession. Personally, financial advisory has done so much for me as an individual, not only on a practical level but also on my personal development journey, and I see all the impacts of the great work that our advisors do. I’ll be fostering community engagement and seeking feedback from advisors and so that, together, we will change the face of financial advice moving forward. Together we will help to hear the voices of advisers and bring positive change to the profession so that we can continue helping Australians to secure and protect their financial future.

Please get in touch at info@afa.asn.au

The Financial Adviser | March 2022

Business Growth

Vanessa Bennett Performance Mastery Coach, Next Evolution Performance (NEP). She helps leaders and teams to master their mental energy for increased energy, productivity, staff retention and profitability.

Are you and your team set up for success or burnout this year? The period over Christmas and New Year, and bit each side, is usually seen as a great time to recharge. It’s a time for relaxing with family and friends, maybe going overseas and really switching off, with the idea of coming back to work in mid-January, all energised and ready to take on the year. So, what happened this year? Unfortunately for many, this wasn’t the case. Many people ended up in isolation, either with Covid, or a close contact of someone with Covid. Travelling often took more energy than it created, with constant changes to borders, and not being able to get PCR tests. Keeping on top of the ever-changing rules certainly took some energy too.

That doesn’t sound like a great strategy for success at the start of the year – the year is a marathon and not a sprint so if energy levels are that low at the start, and people don’t know how to increase their energy, well, it’s going to feel like a very long year.

Many people also get quite energised by being back in the office at the start of the year and getting a sense of connection with their co-workers, but for many that wasn’t the case.

1 Team culture and effectiveness is undermined by people lacking the ability to regulate their emotions. This leads them to be a little less delightful to be around than they otherwise would be. This perpetuates negativity and leads to energy being spent on the wrong things.

So, what’s the impact on your business? As a result, many people are starting the year with way less energy than they usually would. We often work with a number of new clients this time of year and we are asking them to rate how energetic they feel on a scale of 1-10. 10 being super energetic – ready to take on the world, and 1 being totally exhausted and preferring to curl up in the foetal position. Normally this time of year the responses are around 9-10. This year, the general response seems to be somewhere around 5-7, or even lower. Warren Buffet says to hire for three things – Intelligence, Energy and Integrity. While he claims integrity is the most important, energy features highly for a reason. London Business School has officially ranked energy depletion as one of the biggest threats to productivity as we come out of the pandemic. At Next Evolution Performance, we have always believed that energy is your currency. So, if people are only turning up to work with 50-70% of their usual energy, this means that they are 30-50% less productive than they could be, and therefore you are potentially 30-50% less profitable than you could be.

The Financial Adviser | March 2022

And there are other implications of people working with less energy:

2 Things take way longer than they should, decreasing productivity and sense of achievement while increasing stress levels. Generally, people will normally take six hours to complete what they could have done in four hours. 3 Higher stress levels lead to decreased effectiveness of the immune system. This means people are way more susceptible to colds, flu and whatever other nasties are flying around which means more sick leave will be taken. Let’s face it, our immune systems are a little out of practice with all the physical distancing and extra hand sanitiser over the last two years. At least our immune systems have been getting a holiday….. so Covid will probably end up being the least of our worries! 4 People find it harder to think rationally and proactively. Therefore, they will see more problems than solutions, so often advisers will need to spend more energy problem solving on behalf of others. This leads to a lower level of staff accountability.

Business Growth

So how do we start to solve this energy depletion? Setting up a culture of energy is an important part of any high-performance culture. Energetic people want to work with other energetic people, so this is a very important trait to hire for, and then to maintain as part of your high-performance culture. So, what to do when people haven’t found the start of the year as energising as usual? Build awareness

Ask the question about how energetic people are feeling on the scale of 1-10 described on the previous page. If you ask this on a weekly basis you may find the results quite insightful. If your team is mostly a 9-10, perhaps you could load them up with even more work without freaking them out. Of course if you have people around the 5-7 mark, this needs to be addressed. Everyone should be accountable for their energy levels It baffles me how many people blame their lack of energy on external factors. And while it can be energy draining when life throws some curve-balls, many people don’t give themselves a fighting chance to still maximise their energy.

Try asking this question “What are you going to do to improve your score from a 5 out of 10 to at least a 9 out of 10?”. This question sends a message that they need to take responsibility for their energy levels. It’s also a good idea to have something in everyone’s KPIs, or more so the Key Behaviour, Activity and Mindset (BAM) Indicators that we help advisers build at Next Evolution Performance. It’s not to say that everyone always has to be a 9 out of 10, but it does mean that people should be taking responsibility to give themselves the best chance possible to be at a 9 or a 10 out of 10. And this needs to be reinforced, coached and discussed on a regular basis with your team so that it continually remains top of mind. Provide brain optimisation tools to help people save mental energy

It’s a two-way street, there is plenty of neuroscience available to help people get way more done using way less mental energy. For many people their lack of energy comes from spending too much of it unnecessarily. Helping people to understand some neuroscience and some easy tools to structure their days for effortless work will go a long way to helping your staff’s energy levels. Make sure everyone has booked their annual holidays

Starting a marathon and thinking about 42.2kms is extremely daunting, that’s why most runners will think of their distance runs in terms of shorter milestones. Your brain needs a break throughout the year so it’s important to have everyone book in their holidays throughout the year. Due to travel restrictions, many people haven’t taken their leave over the last two years which is also contributing to fatigue. Now is the perfect time to ensure people have their leave booked in. This will help people to avoid burnout, particularly at times when they really need their energy. Of course, it will help you to get that annual leave accrual off your balance sheet too. Teach people mental fitness to deal with energy drains outside of work

One of the incredible financial planning practices I work with really wanted to make sure they weren’t causing unnecessary stress to their team members. When I did some 1:1 express coaching sessions with each of them individually, it became clear that they all loved working there. In fact, many of their energy drains were coming from outside of work. We often say that grown up people will have grown up problems. So as a result, after the initial work to ensure that people were using their energy as efficiently possible at work, we did some sessions to help improve their mental fitness, not just for work, but more so for outside of work. You may not think that things going on outside of work are any of your business or responsibility to fix, but these energy drains will impact your bottom line, so we would argue that businesses have a vested interest in providing mental fitness tools to their staff, and ensuring that staff take responsibility to use them.

Putting it altogether Having energised leaders and team members is absolutely key to improving productivity, profitability and staff retention. It also reduces sickness and mental health issues in your team. If you are not aware of your own energy levels, and those of your team members, you could have a blind spot effectively costing you energy and profits – remember energy is your currency. So start by asking yourself these questions…….. How would you rank your energy? How would your team members rank their energy? What are you going to do to improve

your energy? And what are you and your team members going to do to improve the overall energy of everyone in your business? Of course if you aren’t an expert in neuroscience and mental energy, and not sure how to go about this with your team please get in touch.

Complimentary energy consultation If you are interested in understanding more about your team’s energy and productivity situation, and how to improve it, please reach out for a complimentary, no obligation, 15 minute consultation at: nextevolutionperformance.com/contact The Financial Adviser | March 2022

Who's who at the AFA Our vision

AFA Directors

We empower financial advice professionals to transform the lives of Australians through quality financial advice.

Jawad Ahmad

Patricia Garcia

SA/NT Director

QLD Director

Katherine Hayes

Shaun McDonagh

The Association of Financial Advisers

NSW/ACT Director

Independent Director

National President Sam Perera P (02) 9266 2266

QLD Director Patricia Garcia P (07) 3252 3600

National Vice-President Michelle Veitch P 0438 621 943

NSW/ACT Director Katherine Hayes P (02) 6152 9144

Treasurer Samantha Robinson P (03) 9686 1784

WA Director Stephen Knight P 0411 603 444

SA/NT Director Jawad Ahmad P (08) 8229 2260

Independent Director Shaun McDonagh P (02) 9267 4003

AFA National Office Level 5, 257 Clarence Street Sydney NSW 2000 P (02) 92674003 Members 1800 656 009 www.afa.asn.au Editor Candice Spence P (02) 8036 8173 E candice.spence@afa.asn.au Advertising (02) 8036 8173 Design, Print and Distribution Agile Print Media P 0413 159 109 E john@agileprintmedia.com.au Distribution The AFA Ltd and the Editor do not necessarily agree with comments and views expressed in this publication, and do not accept responsibility for any personal opinions stated herein. The AFA Ltd and the Editor do not take responsibility for the accuracy of “financial product advice” provided by contributors to the magazine and information in the magazine does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. The magazine is issued as a helpful guide to financial advisers and for their private information. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not “financial product advice” as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor’s articles is accepted by any other person or entity.

The Financial Adviser | March 2022

Stephen Knight WA Director

AFA Executive Sam Perera

Michelle Veitch

National President

National Vice President

Phil Anderson

Samantha Robinson

Chief Executive Officer

Treasurer

AFA Head Office Candice Spence

Cameron Burne

General Manager, Marketing

General Manager, Partnerships and Membership

candice.spence@afa.asn.au

cameron.burne@afa.asn.au

Caz Garrard

Melissa Favaloro

Manager – Education, Policy & Professionalism

Events Manager

caz.garrard@afa.asn.au

melissa.favaloro@afa.asn.au

Greg Chambiras

William Burton

Member Services Associate

Membership and Marketing Manager

greg.chambiras@afa.asn.au

william.burton@afa.asn.au

Cherie Martin Marketing and Engagement Coordinator cherie.martin@afa.asn.au

Support the AFA Foundation For 14 years the AFA Foundation has supported the work of charity partners through fundraising, awareness and in-person support. Demand for services has never been higher, so the ongoing support of the AFA community makes a real difference to real people. If you would like to make a donation to the AFA Foundation please scan the QR code or visit: afafoundationdonation.com.au

The Financial Adviser Magazine | Vol 26. Issue 1.

Articles inside