The True Value of Advice Dean Lombardo

Disclaimer This document is for financial adviser use only – it is not to be distributed to clients or any 3rd party This document has been prepared by IOOF Investment Management Limited (IIML) ABN 53 006 695 021, AFS Licence No. 230524 as Trustee of the IOOF Portfolio Service Superannuation Fund ABN 70 815 369 818 and as Service Operator of the Pursuit Select Investment Services. IIML is a company within the IOOF Group of companies, consisting of IOOF Holdings Limited ABN 49 100 103 722 and its related bodies corporate. The information in this document has been given in good faith and has been prepared based on information that is believed to be accurate and reliable at the time of publication. This document, or any part of it, should not be copied, reproduced, scanned or embodied in any other document or distributed to another party without the prior written consent.

What we will cover today ? 1 2 3 The changing financial planning landscape Latest research: The TRUE value of an ongoing advice relationship A blueprint for success

Challenges and Opportunities

How industry’s evolve & the consumer’s journey Value Driven Business Models Price Driven Business Models Stage 1 Product Centric Demand > Supply None/very low Very limited Stage 2 Sales Centric Equilibrium Some (direct/indirect) Moderate Stage 3 Client Centric Supply > Demand High (direct/indirect) High (multiple sources) Supply/Demand Experience with product/service Information available

A Value Driven Business Model – All parts must connect! Personal Vision Business Vision Advice Philosophies Implementation System/Process A Value Driven Business Model – All parts must connect! Target Market Acquisition Plan Engagement Process Ongoing Coaching Offer Ongoing Coaching Process HR & Capacity Plan Pricing Model

How we disconnect with our client’s desired outcomes What defines a successful financial planning experience?

“The True Value of Advice” Compared to those who don’t receive professional ongoing advice, does an ongoing financial planning relationship: Deliver better personal & social outcomes? Deliver real peace of mind? Improve an individual’s overall enjoyment of life? Increase overall personal happiness?

Financial planning and health How financial concerns can impact on health ? 3X 11X 65% MORE LIKELY MORE LIKELY MORE LIKELY To have digestive problems To suffer from headaches and migraines To suffer from back pain and tension Associated Press & AOL Poll 1IN 7 ADULTS Can’t sleep because of financial difficulties StepChange

Financial planning and health Consumers who DON’T receive professional ongoing advice MORE LIKELY 15% MORE LIKELY 22% MORE LIKELY 17% To feel stress and anxiety regarding money matters To have their sleep disrupted through money concerns To feel that money issues have impacted on their health

Financial planning and personal relationships Personal and social Arguing about money is the top predictor of divorce GFC and the associated financial concerns lead to nearly 5000 additional suicides in 2009 as compared to the norm Kansas State University British Medical Journal

Financial planning and personal relationships Ongoing financial planning clients LESS LIKELY 19% LESS LIKELY 21% LESS LIKELY 22% To argue with loved ones about money issues To have friendships impacted by money concerns To feel they are missing out on living their ideal life due to concerns surrounding money

Financial planning and daily life Ongoing financial planning clients MORE LIKELY 17% 21% 13% To feel confident they will achieve core financial goals and objectives More peace of mind GREATER LEVELS OF OVERALL PERSONAL HAPPINESS!!

= True Peace of Mind + + TRUE peace of mind relationship/brand (believing that what is promised will be delivered) = + measurable progress (proof that it is working ) + knowledge/empowerment (understanding what is happening and why)

Definition of financial planning success The achievement of core goals and objectives linked to a purpose, delivering positive emotional and personal outcomes.

A three point blueprint 1 Deliver an advice proposition that clearly aligns to clients’ lifestyle goals. The future is a value driven model. Continual coaching toward the clients desired objectives. Businesses need an objective method of benchmarking how clients are progressing towards their desired goals.

Deliver an advice proposition that clearly aligns to clients’ lifestyle goals What is the purpose of providing ongoing financial planning to your clients? (Why provide an annual planning meeting/ongoing service? How does ongoing advice benefit each stakeholder in your business) Each component of your CVP MUST lead to your belief of the “purpose” AND Each part of the process MUST have a purpose itself

Deliver an advice proposition that clearly aligns to clients’ lifestyle goals

Deliver an advice proposition that clearly aligns to clients’ lifestyle goals

Deliver an advice proposition that clearly aligns to clients’ lifestyle goals

A three point blueprint 2 Incorporate the wellbeing benefits of advice into your value proposition. A guiding principle for all aspects of a business. Articulate what your business stands for and how it benefits others. Embrace and incorporate the intangible emotional and personal benefits of advice into the value proposition.

A three point blueprint 3 Deliver on clients desire for family wellbeing. Family wellbeing is clearly the number one and most important area to personal happiness. Family referrals delivers on client needs whilst retaining and growing your business. Introduce a family advice model/fee.

The Next Step – Decide where you want to be! Reflect on your practice today vs the “Blueprint” Believe in the value of advice and deliver it!