Article 1 in a series of 5 Articles
It was on October 6, 1990, that we arrived in Brisbane from Manila, then transferred to a connecting flight to Rockhampton. For my wife Remy and our young son Angelo, it was their first time out of the Philippines, to meet a new family and live in a new land; also for Angelo to learn English as a new language.
For me, it was not exactly a coming home; having lived in the Philippines for 16 years and having been deeply involved with the people, especially the poor and those struggling for justice, home for me had become the Philippines. Australia was a strange land for a 42-year-old man without a trade, without a University degree or similar “qualification”. Except for my parents and siblings, I had no relationship connection with anyone in Rockhampton.
We lived for the first period of time on the hospitality of family, then began seeking employment. To my great chagrin (male chauvinism?) Remy was the first to access employment while I fronted up for unemployment benefits. For professional work I lacked qualifications, for blue collar work I had no experience. None of my interviewers really wanted to know or to understand what I was doing in the Philippines for so long.
Remy and I still ponder those times and how we survived. We also ponder how it was that from those beginnings I eventually became 50% owner of one of the biggest Financial Planning Companies in Queensland.
That is for me a story worth telling, for it is a story about people, about connection with people, about caring for people who in turn care for us.
In 1991 the MLC company in Rockhampton advertised for new personal insurance agents. I responded though I had no understanding whatsoever of tax, tax law, investment, insurance, superannuation, the whole caboodle. What else was I to do but “have a go” as Scott Morrison tells us now? There were 22 others in the line-up, after two years three remained; when the third landed in jail for fraud, it left two of us who stood the test of time until retirement.
It was a time when the old was being challenged by the new in the financial world. This was most helpful to me as a novice because I was not the only one having to learn. Insurance agents were being challenged to become financial planners, new study courses provided, new learnings required, new qualifications to be attained. There were still shysters walking the corridors of the industry but there were also men of integrity and experience like Cliffy Clark RIP ever ready to assist those looking for support and assistance to understand.
The “old” was still in the background. It was an arena of selling; we were asked to list 100 names; these were the ones we were directed to sell to. I was pulling at strings to list 20 names of people I knew. We were to sell superannuation products – with entry or exit fees and undisclosed commission fees.
We were to sell “tax-effective” savings plans that were in fact taxed internally at 30% and only tax effective for those in high tax-brackets.
We were to sell “Whole-of-Life” products – providing both insurance and savings. Apparently. I did sell a few of these until to my great shame I realized the high agent commissions ensured there was no money in the product for a client for years to come, and very little insurance for them either, for the premium paid.
Client records at that time were typed on little 4 inch x 5 inch cards, the summary of a client’s personal situation, needs and goals: name, address, phone number, and list of products purchased. Amen. I was tasked to follow up these clients who purchased the product from agents long gone from the industry. Many of these cards indicated clients had purchased numerous small Whole of Life products. I asked myself why did the agent not simply increase insurance on the original policy rather than sell extra policies? Was it not more efficient to have one policy of $50,000 insurance rather than five policies of $10,000 insurance? Answer: the agent was paid 100% of commission on a new policy, but no extra commission if increasing an existing policy.
I was schooled in “cold calling”. Practice in front a mirror, smile, look intelligent even if you do not really believe in what you are doing. So often, when I did get to meet and talk with policy owners, they were surprised and glad I came, and pleased I explained what the policy was about, because many of them did not really know. However, I did not sell any new policies of this type because I thought they were inappropriate, I believed the did not fulfil the needs of people.
While the “old” was still in the background, the “new” was emerging. Specifically, the use of proper Fact Finders ( a client information and personal background document) to document client needs and objectives, and to match these with appropriate products.
The early 1990s saw the emergence of new term life contracts and new insurances for “critical illness” such as cancer and major disability. Further, there were new investment products on the market without the onerous entry/exit fees and with quality investment processes. This was the age of superannuation advances and the introduction of “Allocated Pensions” for retirees. I believe I was the first in the MLC office at the time to provide such an excellent product for a retiring individual. I did not realize it at the time but this period was the beginning of my transition into an active and engaged financial planner: the industry began the journey away from selling products for commission benefits to a proper focus on the benefits to the client.
I had been floundering in the sales culture up to this point. I was an educator, not a salesperson, I could not sell a bale of hay to a hungry cow, but could clearly demonstrate the advantages of eating hay. Selling was what it was all about. I gave up on cold calling after I called a number and spoke to a lady whose husband had died that week. My income was miserable, I could see no good future.
The MLC Manager in the Rockhampton Office at that time also clearly saw I was floundering. Fortunately, he linked me as an employee with Alan Tomkins who was back in town to launch a new MLC business.
This proved to be a new beginning, the opportunity upon which my future was built. While I did over time come to advise clients directly, initially I was set to formulating written financial plans; we were open to new investment products and processes and the business was engaging fully with people. The industry had evolved: we were advisers, not sellers, connecting with clients, many of whom I still connect with as friends. I was becoming a financial planner.
After a few years John Mackenzie also joined the office, the two of us employed as financial planners and taking an increasing role in the establishing of an integral process of financial planning. The business TFS Lifestyle Planners was flourishing and all went well for a number of years.
The radical change came in 2007 when the business owner chose to sell the business, which by that time was a large and well established one. This prompted a long series of meetings, consultations and various dance and side steps from various interested parties wanting to be part of the future history of the business.
The MLC company, owned by NAB bank, were eager to remain a major stakeholder as provider of the Advice Licence as well as investment and insurance products. Their stumbling block was lack of faith in the Terrible Twins – John Mackenzie and Tony Conway – to have the capacity to effectively run the business. For the business to run under the auspices of the MLC, John and I had to be funded into ownership via a business loan. The NAB chose not to do that.
By this time the fly-by-night-company Elders Financial Planning were flapping their wings all over the place, wanting to claim the business for their nest. They would fund us in via a franchise contract and viewed the business as the Jewel in their Crown for the simple reason that TFS Lifestyle Planners produced the same level of income as all their other franchisees put together. We were unaware at the time, but it was all about the money, nothing about the clients. EFP became for us a crown of thorns.
Our solicitor went through the proposed contract with a fine toothcomb, exposing all the problem areas and issues. On the other side of the fence the EFP negotiator was offering us the world, promising success and producing economic spreadsheets that were shown to be fraudulent when EFP took us to court in January 2013. It was only later that other Elders franchisees referred to that negotiator as “Slippery Sid”.
John and I were in a bind. The business owner was desperate to sell, EFP were offering top dollar to him and painting a bright future for us and we felt we had no alternative. In September 2007 we signed the franchise contract after much negotiation and agreed amendments to make the franchise into something that we could work with, specifically for the clients and our own financial needs. This, at the same time as the Global Financial Crisis was unfolding. The ink on the contract was hardly dry before the honeymoon with EFP came to an end and the fighting began. So begins another story as we fought for the good of our clients, to our horror EFP saw themselves as owners of the clients who were providers of money to them.
As the GFC collapsed the walls of investment around the world, as the dams of security were breached, the greater issue for John and myself was coping with the lies and unconscionable conduct of EFP. Our mettle would be severely tested over the following 5 years, ending in a court case in Adelaide in January 2013.
For the record, Elders Financial Planning no longer exists. Clear Waters Financial Planning is one of the premier Financial Planning Businesses in Australia. I know, I retired in 2016 and am now one of their clients.
