If anyone understands the close relationship between advisers and technology right now, it’s Rebecca Mihalic, Director of businessDEPOT. She sat down with Chris Ridd recently to discuss how she’s been coping amid the global pandemic and what trends she’s seeing in the advisory space during this time. 

Even though her advisory business had adopted working-from-home conditions and technology long before COVID-19, Rebecca still claims that it’s a new world for her and her team. “I think the flexibility is starting to be enjoyed and people are trying to figure out the balance between work and home life, and how you can have it all in the one building, which takes some thinking outside of the box.”

Rebecca see’s the strong benefits in giving advisers and their clients this flexibility, stating what can be an hour and a half journey to meet and talk with a client can now be a 30 minute conversation thanks to digital technology like Zoom. 

“If you can give people back time in their lives, these are things that really mean alot to not just the accountant or the adviser but the entire team of an office. I really see technology enabling this transition.“ Even Rebecca’s more senior clients have been quick to embrace digital technology into their lives, making giving advice during this time really simple. This rapid digital adoption leads her to believe that these changes are permanent not just to the advisory sector, but to all of our working lives. “I don’t think we’ll ever go back to normal. There will be a level of chance across everything we do.”

Rebecca’s excited by this new world. The prospects that have emerged on the back of the rapid increase in technology adoption has freed up time in her life, whilst also making the way she works with clients more insightful and direct. The way she sees it, it’s an opportune time for advisers to be collaborating with technology, each other and their clients to take the industry in a new, exciting direction. 

When we think of those who have been on the frontline of the COVID-19 pandemic we imagine the thousands of medical staff across Australia who have put themselves forward to help save lives despite the risks the virus poses for all. These important figures behind the scenes are experiencing the impacts of the market shock just like we are, and it’s thanks to people like Carolyn Bindon, Director of WealthMed, who are helping navigate these folks through the economic uncertainty.

WealthMed is an advisory business that works specifically with medical professionals, which makes the current climate particularly interesting for Carolyn and her team of 20. As early news broke of COVID-19 spreading from Asia to Europe, Carolyn had anticipated that this emergency abroad could soon make its way to our shores. Bearing this in mind Carolyn transitioned her staff to remote working conditions much earlier than the rest of Australian businesses. “We felt the need to protect our staff and clients so we began working from home in the very early days.”

With the majority of their clients being on the frontline of this medical crisis, the team at WealthMed began proactivity running webinars to help their clients understand what support was available from the government and having direct conversations to make sure that medical professionals knew what they would be entitled to in this time. “This time has still had it’s challenges as we usually do a lot of seminars and sponsorship activity, but that’s all not on so it’s been an adjustment.”

What also helped prepare Carolyn and her team for this crisis is their early adoption of digital workflows to help engage with clients. They have for some time been ramping up their use of the myprosperity portal with the vision that eventually the portal will be the one-stop place where clients check to receive updates and documents. They’ve noticed a steady increase in the portal’s engagement amongst their clients, as people turn more to digital methods of communication. 

Even though this time has been frantic for Carolyn and her team, she admits that she’s really had time to focus on her own agenda. Thanks to the amazing work of her team, she’s been able to take some time to focus on some things she’s wanted to for a long time, and has found that whilst this time has had its challenges, there’s some serious positives to be taken away.

1. Reform delays. The federal government has announced that it would delay the implementation of reforms recommended by the banking royal commission by six months. Treasurer Josh Frydenberg said the delays are as a result of the significant impacts Coronavirus has had on the sector and to help financial planners focus on “planning for recovery”. 

2. Don’t waste a crisis. That’s what Chris Ridd says in his blog this week – explaining that the advice sector has been through more turmoil over the past 2 years but now is the time to capture opportunities as households need guidance now more than ever before. More here

3. While we’re on helping clients, the AFR this week published a story covering strategies to help rebuild share portfolios in a volatile market. 

4. Super Funds are also teetering as a result of market fluctuations – you can read more on how they’re faring using these top 30 tables as a benchmark. 

5. Is stamp duty reform on the way? NSW and Victoria are considering it as a means to help restructure the state economies as we climb out of COVID-19. More here.

This time last year I was watching the fallout of the Hayne Royal Commission and it seemed the daggers were out indiscriminately for all financial advisers and major banks. The 54 recommendations directed at the Federal Government to enact into legislation received huge exposure and the pressure was on for the Government to implement these at pace. 

As the Commission was underway, the mood across the sector was largely that these changes were overdue and the industry needed a clean up. By 2019 that quickly turned to a sense that the industry was now under fire and that there were various knee-jerk recommendations being made to appease the public opinion directed at the financial services industry. 

It’s often the case that one rotten apple can spoil the barrel, or in this case, a few bad advisers can wreck it for the whole industry. The truth is that only 14% of people use an adviser on a regular basis and those who don’t were probably not inclined to go racing to the aid of an adviser when they were seeing the very public dressing down of various rogue advisers during the Hayne Commission. 

 Having said that, I know that many have felt that the shake up from the Royal Commission will ultimately produce better outcomes for the industry. The phasing out of trail commissions; moving to fee for service; a focus on value; eliminating product-aligned advice and lifting the bar on education via FASEA will hopefully bring about a more capable and credible advice industry. 

Then along rolls 2020 and suddenly we are in the midst of a global pandemic. And arguably worse than the widespread health threat to society, we are now in the midst of an even more damaging global financial crisis that threatens to dwarf the massive economic shock that occurred back during the GFC in 2008. As the government has scrambled to minimise the impact of this crisis and launched various stimulus packages to bolster the economy, we are seeing individuals and small business owners in financial distress, the likes of which we have never seen before. 

It has been encouraging to observe the response by the advice industry generally and I can say from where I sit it has been positive, immediate and welcomed. 

Most advisers I have spoken with in the myprosperity@home interview series have rallied to the cause in a way that speaks volumes for the value that the advice industry can and should bring to the communities they serve. Many advisers have been helping small business clients get their heads around the JobSeeker and JobKeeper initiatives and help clients navigate the application process and shore up financial support available via these programs. Many more are supporting individuals to manage budgets, preserve cash flow, trim expenses, manage debt, apply for moratoriums on rent and other financial commitments and basically help clients ride through the storm. Recognising the important role that advisers and financial institutions must play over the coming months in order to get the economy back on its feet, the government this week announced that it would be suspending its reform agenda from the Royal Commission for another 6 months to allow the industry to focus on the very important task of supporting those in need.

So the reform agenda for the Royal Commission will roll on at some stage but right now this is a great opportunity for the industry to really prove its worth. As we look forward to getting through this crisis, the role of the advice industry will be much better appreciated by the public and will bring balance back to the debate about how it needs to be structured moving forward. It’ll also likely be a leaner and more efficient industry, better equipped and enabled through the forced move to technology during this crisis. 

So we are looking forward to an industry whose value is better understood; more focused on providing clear value; one that is getting closer to its clients; and underpinned by innovation and technology. That sounds like a good outcome to me.

Written by myprosperity Director Chris Ridd

Usually in non-COVID times you’d find Melanie coaching and educating advisers across the realms of taking their business online with authenticity and genuineness, but the current times have urged her to focus her attention back to home, as her local community feels the direct impacts of the COVID-19 market shock. Situated in the beautiful Hunter Valley, Mel’s local community of Maitland has suffered from the lockdown conditions with local businesses closing due to a huge lack of foot traffic. 

Given the situation in her community Mel felt that the most helpful thing she could do in this time was to extend her advice to those around her. She partnered up with the Maitland Business Chamber to do a series called the ‘Small Business Bouncing Back’ webinars, focusing on getting local people together to stimulate their local economy by buying and shopping entirely locally. “Unfortunately we’re going to see a lot of small businesses who will struggle to recover, so more than anything if your local shops need support then that’s the most important thing you can do. If everyone does one of those little things then as a collective we can keep moving.”

Local advisers around Mel are working extremely hard right now, with some working 7-days a week just to service their existing clients. She feels that this is a golden time for financial planners and accountants to work with their clients to really show them the value in going digital. “For managing finances, accounting software is an absolute must obviously in this climate. Some people still don’t realise the power of platforms like Xero or myprosperity. Without these platforms it’s almost like operating with a blindfold on.”

With all this craziness going on, Mel’s been finding walks and yoga to be a saviour in her life. “It’s important to get outside and just remember that the world isn’t collapsing, this will pass, take the time to be present, look after your mind, and just be happy.”

You can view the full episode here.

1. Low-interest rates are here for the long haul. It’s likely the RBA will keep the cash rate low for a while to come with no improvement expected in inflation or labour market conditions expected for some time, Mortgage Business reports. 

2. More JobKeeper clarification. Deborah Jenkins, ATO deputy commissioner, confirmed in a My Business webcast this week that businesses that met the JobKeeper eligibility criteria upon their enrolment will continue to receive the $1,500 wage subsidy per fortnight even if they experience a boost in revenue in subsequent months. More here. 

3. You know what they say about playing with fire? ASIC has reported a surge in the number of new retail investors entering the market, signalled by the rate of creation for new accounts, which shot up by 3.4 times over March and April. Volatile conditions are making for dangerous conditions: “Even market professionals find it hard to ‘time’ the market in a turbulent environment, and the risk of significant losses is a regular challenge,” ASIC said. More here. 

4. How is this going to play out? CMC Market’s Michael McCarthy has scoped out 4 possible scenarios we could see as we emerge from COVID-19. The full article is over on the AFR but the low down is a V-Shaped recovery, better in 2021, recession now or reinfection and depression. The V is the most optimistic and probably most unlikely – what we absolutely want to avoid is reinfection and deep depression so keep social distancing and we can all do our bit to get out of this. 

5. Early super withdrawals near $10bn. More than 1.2 million Australians have sought to withdraw super funds early, news which comes as the AFP investigates more than 100 cases where users have had details on their applications accessed while others have had their super accounts accessed. A timely reminder to update your passwords and get up-to-speed with phishing tactics to protect your personal information. More here.