Grow together: the importance of collaborative working as a business model

The Financial Advice Association Australia (FAAA) was formed in April 2023, from a merger of the Financial Planning Association of Australia Limited (FPA) and the Association of Financial Advisers Limited (AFA). The FPA and the AFA were the two largest and longest-standing associations of financial planners and advisers in Australia.

The inaugural national Congress of the FAAA was held in Adelaide from 20 – 23 November 2023 and had as its headline theme “Grow Together”.

I attended this conference as both a participant and speaker and believe the Congress delivered a substantial treatment of this theme in both adviser-to-client and adviser-to-adviser contexts.

I attended as a participant across all three days, and also as a speaker with Bernie Walrut, delivering our session titled “Great problems from little statements grow… – De-risking client financial decision making in estate planning” (click to download).

Our aim was to demonstrate that simple statements such as “I want a Power of Attorney” can often give rise to a range of complexities that no one professional can resolve alone.

Collaborative Working was introduced as a business model for making operational the multi-disciplinary response required by complex client situations.

We proposed in our session that collaborative working could be seen as a method of work founded on the following principles:

  • Only accepting the legal and competent instructions of your client.
  • Practising the National Decision Making Principles and in so doing acknowledging that the purpose of the adviser is to support and safeguard the will and preference of their client.
  • Practise the Ethics of Care.

The feedback from our session and other discussions at the Congress highlights the encouragement being given to financial advisers to broaden their engagement with clients.

Barriers to that end that were noted include:

  • Breaking down the “Distribution Mindset” towards financial advisers held by financial product and service manufacturers.
  • Expanding the business model of financial advisers to include income streams from services not related purely to the provision of financial products.
  • The “tick box” compliance culture promoted by RG 146 and the administration of the Best Interest Duty under s.961B of the Corporations Act 2001.
  • The corrosive effect s.766B of the Corporations Act 2001 has in limiting how financial advisers implement the full suite of practices and standards established by the Financial Planning Standards Board.
  • The evolution of a statement of advice (SOA) – in my view a risk mitigation tool for the adviser and not a helpful and useful decision support tool for a client.
  • A lack of understanding that financial advice is a subset of the broader field of private wealth administration with the result that the multi-disciplinary practice contexts and business models available to financial advisers are not being deployed for the benefit of themselves and their clients.

Self-licensed advisers have more flexibility in dealing with these issues. That said, the point I made continually through the Congress was that collaboration is a business model choice. If the employers of financial advisers do not evolve their businesses, no amount of adviser training will result in better outcomes for the businesses employing them.

The ethics of service delivery was a common theme between the sessions delivered by Dr Katherine Hunt and the session delivered by Bernie Walrut and myself. Dr Hunt was focused on the ethics of risk profiling and understanding the client’s self control and ability for self determination. The ethics of pricing, risk profiling and service delivery we hope will be the subject of more advanced training for financial advisers and their businesses.

In the meantime, we will continue to expand our current collaborative working pilots with our colleagues at Victoria Wealth Management and Elysium EPL.

We welcome other professionals joining our collaborative working pilots. Please contact us through the normal channels.