“If more information was the answer, then we’d all be billionaires with perfect abs.”
— Derek Sivers
Obligations in practice
Competency, from ASIC’s perspective or simply as a matter of practical wisdom, is the capacity to apply knowledge and experience.
You understand that. FASEA understand that. ASIC understand that.
So why is most compliance training designed to impart information rather than develop, and apply, participants’ practical understanding of the law, regulation and ethical standards.
As entertaining as Powerpoint is, we think that immersion, interaction and practical application are the best ways to engage and educate.
This is how we approach our Manager/Responsible Manager Workshops and we encourage you to test your knowledge, commerciality and ethics by consulting to WPR Financial Strategists.
2019 was a big year for the usually staid and conservative accounting firm, Waite, Panich & Runn.
In February, Partner Michael Runn successfully overturned his ASIC banning as an SMSF auditor.
Runn and the other partners felt vindicated by the AAT’s determination that Runn’s obstructionism, carelessness and lack of engagement did not prove the “underlying lack of fitness and propriety” needed to support his banning.
That determination fired up the partners to move beyond accounting, SMSF audit and administration services.
In March, the partners announced their intention to terminate their limited Corporate Authorisation from DCB Megabank and obtain their own AFSL “to better service the unknown financial needs of our clients”.
This corresponded with partner, Murray Panich, successfully completing “Introduction to Financial Planning I” on his second attempt. The certificate joined his Bookkeeping certificate on the wall of his office.
Murray and Michael even started their AFSL application process, until an unusual convergence of events caused them to pivot away from self-licensing.
In early April, the financial industry press announced that WPR had partnered with Awesome Financial Services Pty Ltd (AFSL and ACL 645234) moving the firm, as the press release declared,
“one step closer to providing exceptional advice solutions to wholesale clients – like the mums and dads who rely on WPR to prepare their tax returns every year”.
Rebranding AwesomeFS, as WPR Financial Strategists, was hailed by WPR’s public relations team as signifying the professionalisation of the advice industry and ‘offering a clear alternative to the conflicts and self interest inherent in institutional advice models”
Everything is Awesome
WPR had always had a good relationship with AwesomeFS.
Since 2012, WPR had provided AwesomeFS with independent audit and consulting services and innovative tax advice. The relationship between the parties had always been warm and mutually beneficial.
For its part, AwesomeFS was an independent, national mid-size advice business with a family- culture, sustained profitability and a traditional (but not exclusive) focus on fee-for-service advice, wealth creation and SMSF.
After the ‘partnership’, it is poised to become so much more.
AwesomeFS’ CEO, Sally Awesome, has a high public profile as one of the few female CEOs in advice. Although a fierce critic of APES (like her brother-in-law Michael Runn) she’s done more to promote the development of an independent advice profession than anyone else you can name.
But she’s not a ‘empty suit’.
Sally understands the pressures of working on the front line of retail advice – she’s always been a “hands on” CEO and closely-managed most of the key aspects of the business as she guided it from a single practice to a network of over 120 advisers.
But in late 2018, when her husband, the CFO, left suddenly, Sally wondered how she’d keep the business together without an experienced Executive team on which to rely. This led her, in 2019, to accept Michael’s suggestion to work more closely with WPR.
Sally trusts the WPR partners and believes a closer alignment will significantly benefit Awesome’s clients.
Sally has committed to remaining as CEO and Responsible Manager, but at Michael’s suggestion, and given Michael’s willingness to keep a close eye on compliance, has taken an immediate sabbatical to allow herself time to pursue further education and develop
People who need people
While Sally took extended personal leave, her ‘mentor’ and AwesomeFS non-executive director, Murray Panich, stepped in to resolve some accounting irregularities, streamline their administrative and operational areas and help AwesomeFS capitalise on WPR’s SMSF expertise. With high level connections within both DCB Megabank and Integrated Banking Solutions, Murray also had access to the ‘limitless resources’ he needed to implement his vision for WPRFS.
But, it was the other non-executive director, Angela Hydra (CPA, CFP and CFA), that really stepped up.
As an Authorised Representative of AwesomeFS (and the owner of one of the largest practices in the Group) it was surprising that Angela had time to take a consultancy with Awesome. But she did so on competitive commercial terms and had an almost immediate impact. (In fact, WPR so valued her contribution that they welcomed her as a Director and shareholder of WPR Property.)
As Chair of the Risk and Compliance Committee, Angela has overseen a significant improvement in compliance results and increased adviser activity. In fact, she’s revelled in her new role: she managed the Product Selection Committee, refined the risk profiles, implemented an MDA and established model portfolios for the business.
She and Murray also took over management of the Approved Product List, and the research process, to improve quality, efficiency and accountability.
The remarkable rigour they brought to the APL led to a significantly higher bar for inclusion; Industry funds (“lacking transparency and appropriate risk choices”) were omitted from the list as were Index Funds (“compromise the efficient allocation of capital”).
In addition, their decision to end WPRFS’s reliance on compromised institutional research providers led them to engage “independent” Hydra Consulting, whose contrarian philosophy has helped the unlisted WPR Property Fund (No.1) achieve significant growth for its self-valued property portfolio. The Property Fund’s declared growth also provided the Committee good reasons to add the other WPR Funds to the APL.
Revolutionising the advice business by focussing on the firm’s wholesale clients, by embracing scaled advice and by driving efficiencies, practice profitability has soared. The decision to launch the WPR MDA (a white-labelled version of DCB’s managed account platform) supercharged the advice process. The appointment of Murray Panich as the Investment Manager (and the use of the Hydra portfolios) has made the process seamless.
Things are excellent, which is why the ASIC 912C letter you’ve received surprises you.
Choose your own adventure:
The focus of the three-hour workshop is driven by the participants’ preferences, but the practical application of the case law, legislation and regulation tends to address five key areas:
- Aspect One: Efficiency (Structure, sabbaticals and stretching)
- Aspect Two: Honesty (Product, profitability and partnerships)
- Aspect Three: Fairness (Distribution, integration and adviser “education”)
- Aspect Four: Professionalism (Platforms, transition and product replacement)
- Aspect Five: Practicalities (Advisers and real advice)