Phil Osborne

Introducing a Thought Leadership Forum to its financial advisers in Sydney this month, Intelligent Planning managing director, Phil Osborne said that while the profession needs thought leading ideas, they should not be shaped exclusively by industry leaders.

‘We don’t think anyone has a monopoly on good ideas,’ he said. ‘You learn from people with years of experience, and we all benefit from that. But you also learn from people who might have less experience but who have a fresh take on the issues facing the industry.’

Mr Osborne believes genuine thought leadership comes from looking at current issues through a variety of lenses.

‘We want to make sure that we’re learning from advisers, the people who are actually out there at the coalface with clients,’ he said. ‘We don’t want to be just sitting up in an ivory tower directing traffic.’

Actively seeking input from advisers is one of the ways Intelligent Planning, a bespoke financial services licensing offer, is embedding a collegial culture.

‘We believe in allowing advice practices to be what advisers want them to be,’ Mr Osborne said. ‘Our role is to make sure they are compliant and accountable. Anyone can buy a suit off the rack, but it’s never going to be a custom fit. You go to a bespoke tailor for that. We believe it is similar with financial licensing offers.’

Mr Osborne said the Thought Leadership Forum demonstrates that Intelligent Planning meant what it said when it launched earlier this year, about listening to financial advisers.

‘We gathered a number of adviser thoughts on current issues from the forum which will not only help further inform our offer, but also help shape the profession,’ he said.

These include:

1. On qualifications and accreditation: soft skills are just as important
   While qualifications and accreditation are vital to being regarded by the public as professional, proficiency in ‘soft skills’ is equally important – not just from a business practice point of view but also in helping clients improve their financial literacy and better understand the work we do.
2. On technology: technology should not be driving advice practices
   As useful as technology is, an advice practice should never be driven by what a particular technology can, or more importantly can’t, do.
3. On professionalism: a professional reputation is earned
   Being a member of a profession isn’t enough. Gaining a reputation as a true professional, just like gaining respect, is something that is earned by actions.

‘We will be working with our advisers to implement these ideas, where they consider them important to their business,’ Mr Osborne said.

The Intelligent Planning licensing offer launched in January this year. Key elements of the offer include a flat licence pricing model, the ability for advisers to speak directly with an internal industry expert on a peer-to-peer basis and a culture of community.

Intelligent Planning also offers a part share in its business to the first wave of founding advisers. ‘This gives our first advisers a degree of ownership in the business, thereby guaranteeing their voices are heard,’ Mr Osborne said.

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Phil Osborne

Dirigere Advisory Pty Limited AFSL 524371 (Dirigere), has officially relaunched as Intelligent Planning, a boutique financial licensing offering operating through the Dirigere licence, effective 15 January 2024.

Intelligent Planning’s Managing Director, Phil Osborne said, ‘We saw a widening gap in the financial planning landscape between what today’s professional financial adviser community really wants from a licensee and what the market currently delivers. Intelligent Planning is designed to help fill that gap.’

Other Intelligent Planning founding members include Damian Grimes, a former Rothschilds UK financial adviser, who fills the role of CIO, and former Synchron State Manager and financial adviser, Matthew Wallis, who comes on board as Advice Distribution Manager.

‘Listening to our financial advice practices informed the new Intelligent Planning offer and gave us the confidence to move forward with it,’ Mr Osborne said. ‘Key elements include a flat licence pricing model, the ability for advisers to speak directly with an internal industry expert on a peer-to-peer basis and a culture of community.’

All initial founders will have equal shares in Intelligent Planning and the group is offering a further, equivalent share to be divided amongst the first wave of founding advisers.

‘We are offering our first advisers a degree of ownership in Intelligent Planning and therefore guaranteeing we hear their voices about how we operate,’ Mr Osborne said.

Practices with Intelligent Planning include Mr Wallis’ Sydney-based business, Beta Advice, Canberra-based Hayes & Co, operated by Katherine Hayes, who also sits on the Financial Advisers Association Australia (FAAA) Board, and Perth group, NOR Financial, which services the medical fraternity, owned by Shaun Clements.

‘What we have in the excellent practices we have on board, and what we are continuing to look for is good quality, forward-thinking businesses which have room to grow,’ Mr Osborne said.

Intelligent Planning will be part of Intelligent Money Partnership, an integrated financial services offer, currently in development.

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Phil Osborne

Speaking at the Synchron Conference in Darwin last week, Synchron General Manager, Compliance Phil Osborne said that just like music, the financial advice profession could be considered in terms of non-negotiables and guidelines.

Drawing a parallel between the two seemingly divergent occupations is something that Mr Osborne is well qualified to do, having graduated from the Victorian College of the Arts School of Music before entering the financial services industry and obtaining Masters degrees in both law and commerce.

“Where the similarity between the disciplines becomes apparent is through what is required of every participant and what is left to the individual to interpret,” Mr Osborne said.

“For example, things like what key you’re in, what timing to use, note and rest values, and so on, are all non-negotiable directions for the musician. Other directions, for example the pause, which indicates to the musician that they can hold a note for as long as they wish, are guidelines.”

Mr Osborne said similar things are true in financial services. “As non-negotiables we have the laws that govern the industry, and guidelines like regulatory guides and past experience.”

While the laws are clear and include The Corporations Act, Common Law – Equity and Fiduciary Duty, the guidelines leave a little more to the adviser’s discretion.

“These guidelines include what I’d call ‘greatest hits’ like RG 175 but there are also some more obscure, or ‘B Side’ tracks,” he said, “including RG 36 that talks about when advice has actually been given.”

Other guidelines include precedents. “They were developed as part of the common law of Equity and are a major guiding factor in court rulings; once issued they provide guidance for future occurrences. Think of precedents as the cover bands of financial services governance,” he said.

However, there are also some things which might straddle both non-negotiables and guidelines – the Code of Ethics in the manner it has been established, for example.

“On the one hand, through its inclusion in the Corporations Act Section 921E – the Code of Ethics is non-negotiable, on the other, as a series of ethical standards, it’s a set of guidelines to be interpreted by advisers who come from different backgrounds with different experiences.”

When thinking about compliance, Mr Osborne said that while there is room for interpretation, advisers need to be very careful.

“Music is made up of both sounds and silences. What we need to remember is that where a silence might exist – that is, where legislation is not prescriptive – we don’t necessarily need to fill it with rules or regulations,” he said. “We need to work with the silences we’re given to exercise our professional judgement and continue to work with government towards principles-based regulation.”

Mr Osborne said that it’s very important for financial advisers to get this right. “If musicians ignore the non-negotiables, and are poor at interpreting the guidelines, the only consequence will be bad reviews; if advisers do the same, they will likely end up facing regulatory action or possibly the courts.”

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Phil Osborne

Calls for a change to “target a principles-based regulation framework” put forward by Senator Jane Hume should be considered carefully and not be a knee-jerk reaction for popular support, according to Synchron’s General Manager – Compliance, Phil Osborne.

“While principles-based regulation is the ideal destination for how we should be allowed to operate as an industry, we should regard this as a destination that will be arrived at after a bit more of a journey,” he said.

“We need to think of this in terms of the application – whose principles will be applied? Will we be allowing advisers to use their professional judgement and be guided by ethical standards, as has been promoted since the introduction of the Code of Ethics? If so, what happens when the regulator disagrees with the advice provided? Do we then have to discount the principles under which advice was actually given?”

Mr Osborne also believes an important, often overlooked consideration is the application of the principles of the consumer.

“How is a nuisance complaint to be treated? Under current requirements, the Ombudsman will always allow the client to decide whether to continue with the complaints process, regardless of whether there is any merit in their case,” he said. “With no disincentive for the client, the advice community is subject to the danger of moral risk under a principles-based system.”

Though many look at the ‘safe harbour’ steps of the client Best Interests Duty as a checklist to be completed, Mr Osborne sees these as guidelines to support an advice business.

“The concern is that should these steps be removed, what will then be in place for an adviser to rely on to demonstrate they have acted in an appropriate manner when dealing with the client?” he said. “Let’s not forget that before the ‘Best Interests Duty’ legislation, the requirement was to have a reasonable basis for recommendation. To remove the safe harbour steps goes back to an argument as to what is reasonable or not and removes an objective measure that provides an adviser with some form of defence, as well as a benchmark by which they can be held accountable.”

As for the domination of checklists causing compliance complication and micromanagement, this is a concern with which Mr Osborne wholeheartedly agrees.

“Over the years, checklists that were simple and performed a valuable function have been bastardised – continually being added to and expanded to the point where we’re now seeing checklists for the checklists.

“Adding something to a process doesn’t necessarily mean it’s an improvement. It’s the mentality of compliance departments to add extra things to supposedly improve compliance that now sees the industry overwhelmed by monumental amounts of documentation. Checklists, lengthy advice documents, onerous fact-finding demands have all had the effect of creating a bureaucracy that doesn’t support our actual purpose – to provide a service to  clients.”

What also needs to be considered, according to Mr Osborne, is the way in which the industry has fumbled its opportunity to apply principles-based regulation via the Code of Ethics introduced in January 2020.

“The fact that it took the industry two years to understand that a concern for conflict of interest didn’t actually mean referral payments were banned under Standard 3 doesn’t bode well for how regulation on a principles-basis would actually be applied,” he said.

While he supports the evolution of the industry over time to a principles-based regulatory regime, he believes the industry right now ultimately needs to step back and assess exactly what the legislation that is in place actually requires.

“The legislation we have now is not that prescriptive or onerous. With the ability to interpret what is there it already provides us with what many are seeking from principles-based regulation. Let’s get used to working with the Code of Ethics in conjunction with the spirit of the current legislation before we go changing anything.”

Mr Osborne said the current situation reminds him of an Oscar Wilde quote. “When the Gods wish to punish us, they answer our prayers. In other words, let’s be careful what we wish for – let’s not throw away the objectivity and protection advisers enjoy with the safe harbour steps until the industry has evolved to the point they’re no longer required.”

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Phil Osborne

A recent call by some industry commentators to move to a ‘Letter of Advice’, is simply playing with semantics, according to Synchron’s new General Manager – Compliance, Phil Osborne.

“Discussions around what to call the advice document don‘t actually address the core issue – which is the unnecessary length and complexity of Statements of Advice,” he said. “Calls for a ‘Letter of Advice’, while highlighting the issue, is looking in the wrong place for the cause of the problem.”

Mr Osborne said that Synchron believes the solution is in fact far simpler than a name change.

“We can either take years going through the process to discuss and legislate and change the name of the document, or we can act today and choose to follow what the Corporations Act already requires us to do, and that is to have an SOA that is, ‘worded and presented in a clear, concise and effective manner.’”

Mr Osborne referenced section 947B/C(6) of the Corporations Act, the section that directs that a Statement of Advice must (not “could” or “might”) be clear, concise and effective; something that Synchron sees as being generally ignored by industry compliance regimes.

“Section 947B/C(6) is as much a legal requirement as the need to act in the client’s best interests (section 961B) or to provide additional information in the event of recommending a change of financial product (section 947D),” he said. “Yet for some reason, compliance regimes don’t seem to recognise this, instead requiring more and more to be included in the SOA – not for the benefit of the client, but for the sake of so-called ‘best practice’.”

Mr Osborne’s sees a big part of his role at Synchron as recognising where the advice documentation in place doesn’t meet this obligation, and to develop versions that will both meet the letter and spirit of the legislation, while creating a better experience for both advisers and their clients.

Mr Osborne argued that what seems to have been forgotten is that best practice is about what’s best for everybody. “We need to consider what is best for the client and best for the adviser,” he said. “A purpose that a shorter document would definitely serve.”

Blaming the disclosure regime also misses the mark, according to Mr Osborne.

“Regulatory Guide 175 is clear when talking about disclosure and the need to be clear, concise and effective, directly in keeping with its counterpart in the legislation,” he said. “While everyone is very quick to point fingers at legislation and the regulator, that isn’t where the blame lies.

“The work that ASIC has done recently on advice documents as part of their affordable advice project has highlighted that they don’t believe long documents are in the best interests of the client either, regardless of the disclosure regime.”

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Phil Osborne

Synchron has appointed Phil Osborne as General Manager, Compliance, effective 1 February 2022. Mr Osborne has been working with Synchron as a Compliance Consultant since July 2021.

Mr Osborne holds Masters’ qualifications in both Commerce (majoring in financial planning) and Law (majoring in enterprise governance). He also holds the Certified Financial Planner (CFP) designation and has been a director and responsible manager for a number of financial services licensees.

Synchron Director, Don Trapnell said, “Phil has over 30 years’ experience in financial services and, having also previously managed financial planning practices and provided financial advice himself, has an exceptional understanding of the demands on financial advisers and the vital role they play in helping ordinary Australians take control of their financial affairs.”

Mr Osborne has held various roles with numerous financial services businesses, including Lifestyle Asset Management, the SMSF Advisers Network, and Interprac Financial Planning, following his entry to the financial advice industry through AMP and Hillross Financial Services.

Mr Osborne reports directly to the Synchron Board and heads a compliance team which includes Alison Massey, Head of Compliance – Advice Assurance. He will also be working closely with the Head of Compliance – Policy and Regulatory, Hanna Abdullah.

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Investorfirst announces new agreement with InterPrac.

Leading investment and superannuation platform provider, Investorfirst Ltd (ASX: INQ), is pleased to announce it has signed a Platform Distribution Agreement with InterPrac Ltd (InterPrac).

The agreement will see the HUB24 platform delivered as a branded platform for use by accountants and practices that are members of the National Tax & Accountants Association (NTAA). Practices with their own AFSL as well as authorised representatives of InterPrac Financial Planning Pty Ltd will have access to the badged HUB24 platform.

InterPrac will also utilise HUB24’s market leading managed portfolio technology to create Separately Managed Account (SMA) investment options for the clients of accountants using the platform.

Commenting on the agreement, Mr Andrew Alcock, Chief Executive Officer of Investorfirst, said: “We are delighted to have been selected as the preferred platform partner of InterPrac and the NTAA. Their unique business model required us to think outside the square to develop a platform that caters for accountants and tax agents expanding their services to include financial planning. Our flexible technology allows us to provide a leading solution for InterPrac and NTAA members moving forward.”

There are almost 9,000 member accounting firms of the NTAA to which InterPrac, as a long term partner, provides a wide range of quality business solutions. These include Self Managed Superannuation Fund (SMSF) administration, finance broking, financial planning and services for the establishment of companies, trusts and SMSF funds.

As an AFSL holder and member of NTAA ADVICE, InterPrac Financial Planning has over 90 authorised representatives with over $1 billion in funds under advice.

In commenting on the agreement, Mr Garry Crole, Managing Director of InterPrac Financial Planning, said: “We selected the HUB24 platform after major consideration as to what was in the best interests of our clients. Issues that were key for us included independence, technology, fees, product flexibility, and the fact that the platform can accept non‐custodian assets for an SMSF without imposing additional cost to the client.”

The white labelled HUB24 platform, provided with NTAA endorsement, is an ideal solution for NTAA member practices. It has been specifically designed to attract and cater for SMSF clients, in addition to offering a retail superannuation wrap account.

A second NTAA ADVICE endorsed Australian Financial Services Licencee, SMSF Advisers Network Pty Limited, has also agreed to utilise the new service.

Mr Phil Osborne, CEO of SMSF Advisers Network Pty Ltd, said: “The Badged HUB24 platform is an ideal administration service for our advisers. It allows accountants and tax agents entering the financial planning arena to have a service that is not aligned to any product provider, but provides wholesale access to term deposits, over 900 managed  funds, direct shares, Exchange Traded Funds, and model portfolios from independent research houses.”

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