Shawn Brayman

New rules likely to soon pass Australia’s parliament will make financial advisers and product issuers directly liable for ensuring financial products are only sold to suitable customers — shifting responsibility from ‘buyer beware’ to ‘seller beware’.

“Australians haven’t yet recognised the tremendous significance of these new financial suitability laws, which turn conventional wisdom about who is liable for what on its head”, said Shawn Brayman, a global financial suitability expert visiting Sydney.

“In this new world product issuers and advisers are always responsible for ensuring suitability — and directly liable for any mis-selling. Similar rules already in effect in the UK are causing massive upheaval as people scramble to build suitability into their financial products, advice and distribution.”

The new rules are an acknowledgment that most customers of financial advice and products lack the abilities and knowledge needed to evaluate them – no matter how much disclosure occurs.

“Often, the buyer simply isn’t equipped to make good judgements — so law-makers in the UK, Canada and Australia are saying to product issuers and financial advisers that they will now be held liable for unsuitable advice or mis-selling. And it will cost them serious amounts of money if they get it wrong.”

In the UK the compensation for mis-selling of financial products has already run into tens of billion of pounds. Shawn’s company, PlanPlus Global, is a fintech business that supplies suitability tools and algorithms to UK wealth advisers and product issuers to help them build processes that comply with the tough suitability laws that flowed from MiFID II.

“These laws will come into effect in Australia very soon” said Shawn. “They’ve already been through two years of development and consultation; they’ve already passed the House of Representatives and they are the perfect response to the Royal Commission — as, for what might be the first time in Australia, consumer protection and the consumer’s interest is being put first.”

The Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2018 is currently with a Senate Committee which must report by 9 November 2018.

The bill requires that a financial product have a defined target market for which the product is suitable. Sales of products to people outside the defined market must be reported to ASIC.

“This will change everything about the way you do business. You have to know the products and clients like never before and you have to have a defensible argument for why you have put the two together. Building suitability into initial and ongoing advice is a big task, that will quickly chew up the two-year transition to the new regime”.

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Paul Resnik

PlanPlus of Toronto, Canada and FinaMetrica of Sydney, Australia are delighted to announce their merger, effective 1st August 2017.

The merged entity is called PlanPlus Global, but the globally recognized PlanPlus and FinaMetrica brands will also continue to offer their world-leading products on a stand-alone basis. Each is a recognized international leader in its market – PlanPlus for its innovative multi-currency, multi-jurisdiction financial and investment planning software and FinaMetrica for its proven personal financial risk tolerance measurement tools.

The merger means that PlanPlus Global can now offer an integrated solution – around evidence-based investment suitability – to banks, investment managers and financial advice enterprises who want to build robust, defensible planning and advice applications that can be scaled globally.

PlanPlus founder, CEO, Shawn Brayman said: “We believe we are the first truly world class provider of professional advice solutions for enterprises and individual planners. Our products range from the world’s most respected psychometric risk tolerance profiler to a goal-based robo adviser to comprehensive financial planning, all in several languages with more than 12,000 users in dozens of countries.”

The two firms have collaborated together for over a decade, sharing a deeply-held belief that customers and providers all benefit when rigorous academic research underpins financial advice processes. Each has individually built an international reputation for delivering tools to help enterprises build consistency into scalable advice solutions.

FinaMetrica co-founder, Paul Resnik said: “The strategic match between FinaMetrica and PlanPlus is extraordinary. Our products complement each other and we share a common commitment to delivering financial systems that prioritize client’s best interests. Meanwhile, we both have global businesses serving the corporate market and individual advisors. The merger comes at just the right time for us to meet the market’s demands for an affordable, scalable and defensible advice solution that can be applied internationally across platforms, channels and borders.”

The merged business serves customers in more than 30 countries with significant presences in Canada, US, UK and Australia and substantial user bases in India, Germany, South Africa and Malaysia. PlanPlus Global has staff, offices and representatives in all major time zones to ensure all clients, large and small, are fully supported.

FinaMetrica co-founder Geoff Davey will now exit the business after his retirement from executive roles in 2015. Paul Resnik said “FinaMetrica’s world leading reputation in financial risk tolerance is largely the result of Geoff’s insight, intellectual rigour and hard work. We thank him and wish him a long and happy retirement.”

PlanPlus Global is accelerating an ambitious development plan, including continued expansion of their collaborative platform that provides scaled advice from Do-It-Yourself to traditional advisor driven, and exploring the potentials of big-data and artificial intelligence as additional components in standardizing and automating the Know Your Client process.

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