A behind the scenes look at financial services

Taking a Swan dive


Members of the financialobserver team were privileged enough to get an invite to the opening round match of the 2017 AFL season between the Sydney Swans and Port Adelaide courtesy of the Swan’s official education partner Kaplan.

And you could say there was a bit of a financial services, or at least finance sector, feel about the clash with David Koch also there in his capacity as Port Power president.

The day started with an address from Sydney chair Andrew Pridham and as expected he threw a few barbs at the Port Adelaide contingent to spice up proceedings.

This scribe thought he was a little harsh, especially when he quipped: “It’s always lonely in the middle of the ladder, but you’ve got to give credit to the Port fans for their passion and enthusiasm. The last time we saw such a large and passionate group of Adelaide locals all banding together was when they were getting arrested at New Year’s.”

This type of pre-game bravado can of course be fraught with danger and the inevitable serving of humble pie came two hours later when the Power chalked up its first win in 11 years at the SCG with a 28 point triumph over the home team.

In the final wash up we couldn’t help but think, given its high standing as a financial services educator, Kaplan might be able to give Pridham a few tips to help the chairman avoid having to wipe egg off his face again. Perhaps the lesson could centre on the age old financial services adage that past performance is no indication of future success.

Acronyms gone mad


We all know every industry, not just financial services, has the bad habit of using numerous acronyms all the time in the assumption everyone knows what they stand for.

But it’s perhaps not until someone from outside the universe in which we operate is exposed to all of these acronyms that we begin to realise the extent of the phenomenon.

This was demonstrated by SMSF Association National Conference master of ceremonies Andrew Klein, who despite having performed this duty for the past four conferences, admitted he still had difficulty saying SMSF without verbally stumbling.

Klein continued on to confess that, as a non-superannuation or financial services practitioner, he had no idea what a TRIS, an LRBA, a CC, an NCC, BRP, SIS, ECPI, MTR, or NTLG meant but was hoping he would finally find out at what was his fourth conference.

We thought we might give him a bit of a hand by spelling out what each of the above meant in order and that is - a transition to retirement income stream, a limited recourse borrowing arrangement, business real property, a concessional contribution, a non-concessional contribution, the Superannuation (Industry) Supervision Act, exempt current pension income, marginal tax rate, and the National Tax Liaison Group.

We hope when the conference came to an end, and of course if he reads this piece, Andrew will no longer need to use the acronym WTF as he did originally when confronted with these terms.

They said it…


“What is an investment briefing without a Warren Buffet quote?”

Remerga portfolio manager Craig Mercer recognises his own unoriginality when responding to a journalist’s query at the group’s recent media roundtable by referencing one of the world’s most successful investors.

Keeping us honest


Members of the industry can be very coy in their conversations and actions once they know the media is present.

No doubt their concern stems from the fact they might inadvertently get caught out saying or doing something they shouldn’t.

But a recent experience showed this journalist the media themselves are being closely scrutinised by the people they write about.

At an end of year function attendees were given a test. They were asked how many animals of each kind Moses took on his ark.

This scribe fell for the trick and answered two. The correct answer of course is none because it was Noah who had the ark.

This writer thought nothing more of failing the test until one of his colleagues met up with an industry contact who had also attended the end of year lunch.

At the meeting the industry contact brought up the biblical reference and instructed the colleague to repeat the test to see how many animals this reporter thought went on the ark with Moses.

The trick wasn’t fallen for a second time but appropriate acknowledgement was given as to how closely the media themselves are being scrutinised.

Sentiment barometer


The financial services industry is always monitoring client and most importantly investor sentiment as to how optimistic we can be about issues such as the economy.

Often this is done via surveys of various people to see how much individuals are spending and the type of items attracting that spend, be they retail purchases, shares or residential property.

But the experience of the Australian Securities Exchange (ASX) at the recent SMSF Association National Conference suggests all of us looking to get a handle on investors’ attitudes may have been looking for the answer in the wrong place.

At the event in question the ASX had wooden bulls and bears as part of the promotion material present at its exhibitor’s stand.

By the end of the second day delegates had already snapped up all of the bulls on offer leaving only bears left for the latecomers.

We think this might be a sign of adviser optimism for the share market in the year ahead, hopefully driven by the many client conversations they may have had recently.

They said it:


“Welcome to what appears to be the St Patrick’s Day version of the [SMSF Association] NSW chapter [breakfast].”

BT Financial Group senior technical consultant David O’Connell points out the uncanny timing of his presentation, including appropriate lilt, hot on the heels of the annual epic celebration by the Irish community.

We’ll drink to that


In an invitation to a media briefing in Sydney on the future of active investing, a United States-based asset manager chose an interesting term to describe its investing approach, which left us rather puzzled, but intrigued.

The opening line of the media invitation read as follows: “For several years now, bottoms up fundamental research, the cornerstone of active investing, has been facing growing threats on multiple fronts.”

We were willing to dismiss this as an unfortunate typo, except the term came up again in the chief investment officer’s discussion on price distortion during the course of the briefing, seemingly appropriately held at Sydney’s swish Bentley Bar on a Friday afternoon.

“Markets don’t care about whether you’re top down or bottoms up, they care about efficient price discovery,” she said.

Maybe it’s a reflection of the manager’s success, the regular toasting of which has allowed the expression to creep into its vernacular.

Whatever the case may be, we sure hope the firm managed to get to the bottom of it before the next media briefing.

A bit of healthy rivalry


With social media playing such a big part in all walks of life these days, it can be of no surprise Twitter trending has become a commodity sought after at financial services conferences as a gauge of relevance.

And the SMSF Association has fed this phenomenon actively for two years running.

Last year, the self-managed super fund body proudly found itself atop the Twitter trending ladder, albeit with a little help from the fact one of its thought-leader breakfast panellists was the chief executive of Twitter.

But this year, the industry body had to stand on its own two feet and was the number three Twitter trending item behind the Champions League soccer and a YouTube item about Valentine’s Day.

Now a top three ranking is nothing to be sneezed at, but it was another result that was perhaps more satisfying for the event hosts.

It just so happened MYOB was putting on a conference at the same time as the association and at the same venue.

So it was important for the organisation to achieve any advantage and bragging rights it could over the accounting software provider, and it managed to do so in the Twittersphere with a superior trending result.

“In your face MYOB,” was the conference master of ceremonies Andrew Klein’s reaction to the result.

They said it


“When I was asked to speak today, I half considered having a rant about the treatment some of my colleagues have been getting before a certain judge in the Supreme Court here when they go up for their hard-earned remuneration only to have it drastically reduced. Lucky for you I talked myself out of that because, first of all, it was probably of little interest and certainly I wouldn’t get any sympathy.”

HLB Mann Judd Sydney business recovery partner recognises the less-than-favourable sentiment the general public has toward lawyers.

Slightly off the mark


Throughout summer we’ve noticed a lot of financial services companies using sporting themes in their television commercials.

We’ve also noticed the desired outcome or message may have been slightly off the mark.

First there was ANZ using tennis ace Novak Djokovic humming and singing away to “Don’t Worry Be Happy”, the Bobby McFerrin hit from the ‘80s. It was supposed to prove how relaxed Djokovic was in the lead-up to and during the Australian Open.

Alas it would appear he was a bit too relaxed, given he crashed out of the tournament during his round two clash with Denis Istomin.

Then there was Sunsuper comparing superannuation to finding the right wave and how its members seem to have achieved that elusive goal.

However, the image shows a number of board riders all catching the same wave.

We’re pretty sure in real life, rather than feeling they’ve reached surfing nirvana, they’d all be complaining about everyone else ‘dropping in’ on them.

An interesting adaptation nonetheless.

Then finally there was Commonwealth Bank of Australia’s (CBA) story of Emily, a really keen young cricketer who was yet to score a run.

She received some coaching from Australian Test captain Steve Smith and was able to get off the mark the next time she was in the middle, with CBA equating the little girl’s experience with the benefit of getting financial advice.

But being the completely cynical lot we are, we could not help but notice Emily didn’t actually seem to heed Smith’s advice. The reason behind her lack of success with the bat was her technique of gripping the bat with her hands apart.

The commercial shows Emily practising after Smith’s tutelage with her hands together and making good contact with the ball, but when she returns to the middle, while she manages to score her first run, she has returned to having her hands apart on the bat again.

We hope this doesn’t mean CBA customers are achieving the desired results by ignoring some of the financial advice they’ve received.

Maybe we’re reading too much into it.