Sarah Abood

The Financial Planning Association of Australian (FPA) has wrapped up its first in-person Professionals Congress in three years, with over 1,200 delegates attending the two-day event in Sydney last week (22 and 23 November).

Under the theme, ‘Reunite, Reset’, the FPA Professionals Congress hosted a range of sessions designed to help members better understand the issues facing the profession as well as provide practical tools and information enabling them to work more closely with clients and understand their changing needs.  It also celebrated the FPA’s 30^th anniversary.

Sarah Abood, CEO of the FPA, said the most common feedback from members was that they were delighted to be back together after so long.

“At my first Congress as CEO, it was wonderful to feel the energy from having so many members in one room, and experience first-hand the enthusiasm and passion for the profession that they share.  I have attended many smaller member events since I joined the FPA but this was very special.”

Ms Abood said that much of the feedback from members made special mention of the keynote presentation by Professional Andrew Scott from London Business School, which looked at the implications of a lifespan of 100 years becoming the norm.

“A lot of financial planners are grappling with the challenges – and the opportunities – that increasing longevity creates in their work with their clients, financially as well as from a health and wellbeing perspective.

“Another session that generated a high level of interest was with Michelle Levy, chair of the Quality of Advice review, which triggered discussion about the points she raised including how the law governing financial planners needs to change, and the role of ‘general advice’.

“Probably the most contentious proposal amongst planners has been the idea that product issuers would be able to provide simple personal advice in some circumstances.  It has been encouraging to hear Michelle acknowledge this concern, and the concerns of financial planners, and seek to address it in the review.

“We are very supportive of the many changes proposed that will simplify the delivery of advice and reduce the unnecessary red tape and duplicated compliance that currently bogs us all down. It’s encouraging to hear that these proposals remain and are likely to be included in the final paper.”

Ms Abood also congratulated Marisa Broome, former chair of the FPA, who was made a life member of the Association at the Congress.

“Marisa has been a driving force of the FPA for many years, and her recognition as a life member is very well-deserved.

“She was also an integral part of the Congress’s organisation, and its success, and on behalf of the FPA, I thank Marisa for all her hard work.”

The 2023 FPA Professionals Congress will be held in Adelaide on 22-24 November.  The FPA is also planning a number of regional roadshows across Australia in May 2023.

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Andrew Scott

Ever-increasing longevity means that financial planning is more important than ever before, but planners need to take into account a new range of factors when working with their clients, said Professor Andrew Scott during his keynote address at the FPA Professionals Congress on Wednesday 23 November 2022.

His session, RETHINK: The 100 year life, looked at the latest research on longevity, the broader economic, financial and social implications, and what it means for financial advice.

“There is a major shift in human existence underway and we need to find ways to adapt to it – if we don’t, people will age badly,” he said.

“When we talk about longevity, it’s not just that more of us are getting old, but also how old we are getting.  It is a really long run trend and essentially centenarians are now the fastest growing demographic group in the world. In fact, the majority of children born in rich countries today will live to be over 100.

“As a result, whether people like it or not, the chances are that they will live longer than the previous generations, and they need to prepare for this – not just financially but also with their health, relationships, skills and purpose.”

He points out that this certainty of reaching old age is new, and it is inevitable that a longer life means working longer.

“This has significant implications across the board, for governments, corporates, regulators, as well as communities, hospitals, schools, and of course families and individuals.

“Our labour markets are already being driven more and more by people working longer – my own research shows that in the richest G7 industrialised nations, around 85 per cent of employment growth in the past 20 years has come from people aged 50 and above.

“One of the answers being put forward – and we’re seeing this in Australia as well as in the United Kingdom – is raising the retirement age, but that is going to cause its own problems. During the 20^th century, a “three stages of life” approach of education, work, retirement, was established which worked well when life expectancy was 75 years.  But in the 21^st century, when life expectancy will reach 100, this approach will no longer serve.

“Increasingly, retirement is not viewed as a binary solution where people are either working or not working.  Instead, there is a transition – for example, from working five days a week to working four days a week.  What really complicates this is that longevity doesn’t work the same for everyone – this requires diversity in financial planning.

“On one hand, it requires a number of structural issues to be addressed – from financial literacy in schools, to making advice cheaper by addressing the regulatory framework, and democratising access to financial advice.

“It also means changing the way we think about financial planning.  It shouldn’t be just about savings but also about integrating finances and health, maintaining skills, nurturing relationships.

“A key element is understanding risk preferences.  Too many people think of ageing as a process of decline, and they worry about dementia, physical health.  This is understandable, but we tend to underestimate the abilities of older people and our later years.  People’s preferences change as they age and they might not require so much money, so planners need to reassure clients and prepare them for whatever lifestyle they choose.

“The biggest concern about increasing longevity is that people aren’t prepared, and financial planners have a key role to play in that,” he said.

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