What is your number 1 requirement when it comes to managing Client Correspondence?
There is no shortage of correspondence and communications between an Advice Practice and their Client. This can come direct from the client, from their accountant, from fund managers not to mention the correspondence created internally within your business. When it comes to managing these documents, there are many schools of thought around 'how to store' and 'where to store' this correspondance. From CRM solutions to Cloud Storage to internal servers to paper! So many factors need to be considered such as ease-of-access, security, cost to the business, and protection from theft or loss. When it comes to managing your client correspondence, what is your number 1 requirement (or top 3 if you can't narrow it down) and what drove you to pick your current method?CSLR and the cost of Dixon Advisory
This week has seen a big focus on the CSLR, and particularly the cost to the financial advice profession - $18.6m in 2024/25. The underlying story is the issue of the Dixon Advisory business. At last count, there were 1,948 Dixon Advisory complaints sitting with AFCA. To put this into perspective, AFCA received just 600 advice complaints in the entire 2021/22 year across all entities and less than 500 (excluding Dixon Advisory) in the 2022/23 year. The 10 largest financial institutions in Australia need to pay for the complaints received up to 7 September 2022 (a total of $241m), and the Government and the advice profession share the cost of the remaining 310 cases. And when I say share, I should be clear, the Actuaries appointed by the CSLR suggest that the Government will pay 1 of these matters and the profession the rest. How unfair is that? That is another story! This actuarial firm have suggested that 95% of the Dixon Advisory complaints are likely to receive a payment from the CSLR. That is a remarkably high percentage, which draws me to the evidence in the firstAFCA Dixon Advisory case. The table on page 7 of this determination illustrates the percentage of related party products held by this client (between 54% and 74%). That is an incredibly high percentage. This case rests upon the issues of compliance with the BID and the client priority rule. Who would believe that it was possible to comply with the obligation to prioritise the interests of the client, when you are recommending such a high allocation to related party products? No one can have products that were that good, and the associates of Dixon Advisory certainly were not. That is why we have this CSLR mess. This brings me to my second point; should small business financial advisers be covering the cost of the CSLR when the problem was caused by the performance of the products of a related entity? Is that entirely or even predominantly an advice problem? I welcome your thoughts on all of this.FAAA on QAR/super incentives
In a recent submission, the FAAA criticised the lack of "specific encouragement provided for people to seek external professional advice that is not tied to a single product solution" in the Government's post-QAR roadmap. Obviously, the "product solution" being referred to there is super funds. This is a broader issue than the distinction between so-called "qualified advisers" and "relevant providers" (which I talked about here), given the FAAA's concerns about potential "bias and conflicts of interest" within institutionally-aligned advice providers. So I'd like to ask: do you envision there being a clear pathway for members to get external advice in addition to, or following on from, the advice they get within their super fund? If so, should the Government be more explicit about this in its proposals? And what do you think that pathway would look like?Your 2024 priorities
I don't know about you, but I've never been one for new years' resolutions. Time marches on without any regard for the promises you make to yourself on Dec 31st. That being said, there are already a number of important items on the 2024 financial advice calendar and I'm curious as to which of them you think will have the biggest impact on your business in the future. The most obvious one concerns the QAR – we're still waiting for the draft legislation covering the final tranches of the Government's QAR response, but Stephen Jones has indicated he expects implementation this year. Is this timeline likely or even feasible, factoring in the possibility of multiple consultation rounds? Looking at the other pins on the board, we have the adviser registration deadline on Feb 1st, the commencement of the CSLR in April and a range of ASIC enforcement activities – covering areas such as DDO compliance, erosion of super balances and cyber-security – highlighted in the regulator's 2024 priorities list released late last year. Beyond any other key regulatory dates, though, are there any important events you and your business will be focusing on in 2024? From your perspective, what does the year have in store for advice?
