Credentials * Tony Vidler, CFP, CLU, ChFC. Professional Development Manager, Fidelity Life Assurance Director IFA, (former Chair of Insurance College, and Chair of Professional Development Committee), FAANZ spokesperson, number of directorships in & out of industry….and ex-broker I have some idea of what is happening, and what will work in the future. “Tony has the best insight into how the new regulatory regime will work in our industry of anyone I've met at a life company. His clear thinking and relentless focus make him a great asset to Fidelity." Russell Hutchinson, February 1, 2010 DISCLAIMER: this presentation consists of Tony Vidler’s personal views, not necessarily those of Fidelity Life.

Today’s Session Approximately 40 minutes, and aim to cover 4 things. 75% of our time will be on points 3 & 4. Compliance? Professionalism? Building an ADVICE business What are Fidelity doing to help? Questions at the end please, if time permits.

Is there VALUE in “compliance”? n. submission; a yielding; acquiescence; consent. compliant a. yielding; obedient; civil.

…Or value in Professionalism? a. Pertaining to a profession or calling; engaged in a profession; engaged in an artistic calling as a means of livelihood Professionalism n. The principles of professional persons

Building An ADVICE Business We are living in a period of reformation and militant consumerism. Everything has changed. Accept these “truth’s”: 1. Pure “Sales” businesses in financial services have limited future growth or value. 2. Pure “Sales” businesses in financial services have higher than necessary business and regulatory risk. 3. Pure “Sales businesses in financial services will not be valued by consumers.

What is an “Advice Business”? Is positioned at leading edge (not bleeding edge) of industry & consumer trends – it must know stuff before consumers do. Doesn’t link it’s value-add or USP to performance of a product or supplier. Think “naked advisers”….. Leverages know-how…and doesn’t link it’s success to hours worked or billed to consumers Knows what it’s clients really want: - peace of mind, no worries - convenience, ease of business - choices, options - results….. …………..just selling products, or price, is a commodity business!

Life Advisers Core Problem Life advisers are often sales people who give great technical advice, but do not value it themselves. Or value themselves. Other “professionals” are often great technicians who value their knowledge, but are not very good at selling it. Consumers trust and follow the advice of the confident expert. Life Advisers problem generally is low confidence in their own technical expertise and value to consumers. Although they are experts. The barrier to building an ADVICE business is you. Or, your belief in you and the value you provide.

Beyond Reform Once advisers move past reformation, better times will come for “advice businesses”. Possibly BOOM times… To thrive, advisers need to define, then believe, in their self-worth and the value and expertise they provide. Advisers need to figure out how to get paid for that without resorting to the “product” to pay them.

Possible Solution? Break what you do down into 3 distinct phases: Planning Implementation Monitoring & Servicing Planning – fee based, client portability, engagement ends. Implementation – commission based (+/- fee?), contracted for clawbacks Monitoring – trail +/- fee for servicing & reporting

What to do? Take the lead – don’t wait for regulators, and get ahead of the standards you KNOW they want Maximise personal qualifications and expertise – create a premium for YOU Focus marketing efforts & budgets on fostering long term client relationships and the right COI’s Specialise in complexity, but deliver simplicity Focus on excellence in 1 basic sales transaction attribute – access, experience, price, product, or service – which is most valuable to your clients?

How will Fidelity help you? Sustainable commission that rewards ongoing service Leading, innovative solutions Practical tools & templates Technology platform Business & Professional Development expertise Commitment to “independent advisers” Commitment to providing QFE solutions for independents

☺ Whatever you do…. Works Failure EFFORT TIMING (huge) (little) (late) (early) TIMING