RI Adviser Group | LearnProfessional Development Days – November & December 2014

2

Disclaimer

Important Notice

RI Advice Group Pty Ltd, ABN 23 001 774 125, holds Australian Financial Services Licence Number 238429 and is licensed to provide financial product advice and deal in financial products such as: deposit and payment products, derivatives, life products, managed investment schemes including investor directed portfolio services, securities, superannuation, Retirement Savings Accounts.

The information presented in this seminar is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. RI Advice Group strongly suggests that no person should act specifically on the basis of the information contained herein but should obtain appropriate professional advice based on their own circumstances.

FOFA 2014: so where are we now?

22–25 Sept

2nd motion to disallow scheduled

Grandfathering Excluded

Amended Bill tabled

Amended Bill tabled

1 October2nd motion to disallow

was voted against

SoA requirements

Cooling off Period

Best Interests

Enhanced Public Register

24 Sept

3rd motion to disallow full regs.

GrandfatheringIncluded

1September

3 DecemberLast day to

consider 3rd motion Grandfathering

Included

17-19 NovemberVOTE

SUCCESSFUL

24-27 NovemberSenate sitting

scheduled

SoA requirements

Cooling off Period

Best Interests

Enhanced Public Register

22–25 Sept22–25 Sept 24 Sept24 Sept

1 July 2014 Regulations remain as current law;

However:

Amended Bill requires the 3rd reading within Senate to pass.

5

Summary of Findings - October 2014

Misaligned Remuneration structures

• Conflict of interest with client needs and providing strategic advice.

• No correlation between complexity of advice and Adviser remuneration

Current Business Models Create Conflicts of Interests - Encourage strategic advice, product retention and innovation.

• Making product changes can drive policy holder lapses

• Stepped premium policies lapse at a higher rate

• Current remuneration structures can incentivise product replacements

Poor Quality of Advice – 37% failed to meet the relevant legal standard

• Inadequate link between advice and client’s best interests

• Inappropriate scaling of advice;

• Poor documentation;

• Weak rationale for product replacement advice;

• Low relationship consideration - life insurance & superannuation

ASIC Insurance Report - Review on Life Insurance Advice

Legislative Change – Enabling ‘Practice Advice’

6

Who is the ‘providing entity’ for financial product advice? Providing entities may be AFS licensees or authorised representatives (RG 175.34)

• Licensees when an employee provides the Advice;

• Authorised Representatives themselves when they provide the Advice.

Who is best placed to be your clients ‘providing entity’?

• A Practice’s Corporate Entity can be the providing entity to deliver Advice.

• Flexibility for Practices with more than one Adviser;

• A solution where locums are engaged.

• Directors must be aware of their responsibility and liabilities.

RI Advice Process Response

• The RI Advice FSG will soon allow for this ‘providing entity’ choice.

• A simple letter to existing clients will provide the transition of advice to your new corporate entity.

• PDMs can help you understand your responsibilities

For additional advice, an SOA is not required, as long as…

(b)  the providing entity has previously given the client an SOA in relation to the advice

(Corporations Act 2001- section 964B (1)

RI Advice Survey – Adviser Survey Feedback July 2014

7

Positive 2015 Business Outlook

Positive about business growth - Half from referrals

Focus on sourcing the rest:

• Existing Clients: New opportunities, referrals

• Nurturing Centres of Influence and Alliances

• Acquisition

Most Valued

• Alignment of value proposition with my needs

• Alignment of culture/values with my own

• Review process effectiveness

• Advice process effectiveness

Initiatives Well Received• Cashflow and EP4L initiatives viewed positively

Segments have differing priorities yet…All want support to:

• Build business efficiencies

• Provide affordable advice to lower balance clients

• Acquire new clients

• Manage Compliance unpredictability

You also need:

• More marketing materials

• Training and business planning support

• Enhanced RI Advice communications

• OnePath platform development

• Technology integration & support

Endorsement of RI direction

Delivered on many of these since July – Now to implement and embed

Executing on our Strategy – Sustainable Business Model

UNDERPINNED BY CORE LICENSEE SERVICESMarketing, Technical Consulting, Planner Supervision and

Governance, Research, Professional and Practice Development, Advice Tools and Systems

UNDERPINNED BY CORE LICENSEE SERVICESMarketing, Technical Consulting, Planner Supervision and

Governance, Research, Professional and Practice Development, Advice Tools and Systems

EFFICIENTBEST

PRACTICE

EFFICIENTBEST

PRACTICE

GROWINGREVENUESTREAMS

GROWINGREVENUESTREAMS

MAXIMISINGVALUE

MAXIMISINGVALUE

SUSTAINABLE BUSINESS MODELSUSTAINABLE BUSINESS MODEL

Delivered in 2014

9

Business Strength• Health check. • Business and marketing plans• Establishing new referral sources

XPlan enhancements

Simplified advice process. • Risk Only SOA• Flexible Fact Find• Enhanced EPM • Bulk ROA’s – EPM V2

Enhancing communication:• New RI format • Mobile videos • Trade Press

2 Year Roadmap: On track

1. Brand • Localised marketing roadmap• One Path Brand strategy

2. Platform Strategy• Development on current platform • Future concept agreed

3. Engagement • Business engagement framework• Estate Planning for Life • Cashflow Management solutions.

4. Business Support • Grow and Succeed Framework

Major Initiatives for your Clients – Cashflow Management

10

Strong cashflow management is the

cornerstone of effective financial

planning

Major Initiatives for your Clients - Estate Planning for Life

11

Crisis management plan: A solution to the question: What will my Family do in a crisis?

Re-defining Estate

Planning for Advisers and their Clients

Supporting Australia’s Intergenerational Wealth

Transfer

Roadmap deliverables

* Available in Build package with Explainer video1 Maximum reimbursement is $3,000 for Accelerate package

Wealth Report – Client engagement made easy

13

Financial Snapshot

Re-engage with existing clients

Connect with new clients.

Engaging, automated, simple, fun process

Professional, personalised, interesting report

Use it in conjunction with the RI Consumer explainer video.

14

Outsourcing a Platform – Steps to the future state

Market Tender

Conductanalysis to

shortlist

Conduct Due

Diligence Migration

Current Reality

DesiredReality

Not core businessNot core business Low appetite for investmentLow appetite for investment Insufficient scaleInsufficient scale

Best of breed - 1st quartileBest of breed - 1st quartile Appetite for investmentAppetite for investment Forward development agendaForward development agenda Leverage scale benefits Leverage scale benefits Retain distribution capabilityRetain distribution capability

AnnouncementAnnouncement September September

Stage 1 – August to SeptStage 1 – August to SeptStage 2 – Oct to Dec Stage 2 – Oct to Dec 2014

DecemberDecember Quarter 1Quarter 1 2015 2015

TBA – negotiation withTBA – negotiation with successful tenderer successful tenderer

RI Connect 2015

16

Danang, VietnamHyatt Regency Resort and Spa

18-20 March

CREATE

INNOVATE

IMPLEMENT

RI Adviser Group | LearnProfessional Development Days – November & December 2014