The Financial Planner: ‘if I wanted to be a proper financial adviser, I would not work for a bank’

Why did you go into financial planning?

I have an interest in this kind of thing – in financial advising and wealth management – and I think I’m pretty good at dealing with customers and working with people. I first joined the bank as an auditor, then I worked at the bank’s head office for a long time … Then I did a post-grad certificate in wealth management at a university. And that meant I could do ‘frontline’ financial advising, with customers.

Which financial products were you selling in your financial advising role?

Insurance products: life, income protection, trauma and all that stuff. Also, the full suite of investments products – either inside superannuation or outside superannuation.

Did you have to do sales training?

Yeah, yeah, yeah! All the frontline people had to go through sales training. And at every weekly meeting everything is focused on sales. There would be a sales ladder and everyone would know who is making the most sales. And the state manager would look to the practice managers and say, ‘You go and have a conversation with so-and-so because if he doesn’t improve, he’ll be out.’

What kind of skills did they teach you in sales training?

It was very focused on body language: maintain eye contact, lean in and that kind of thing. Also, what kind of words and language to use with customers – get them to agree with you on things. Basic sales techniques: what’s the best time to call people, and how to close a deal. Behavioural stuff. I’m sure it’s very useful if your aim in life is to be a salesman.

What did you learn about closing deals?

One important sales technique – whether it’s insurance or whatever – is if you have the client in front of you in the office, you never let them go without signing. If they go home to think about it – you’ve lost them. You’ve got to seal the deal right there. There are lots of little techniques, like focusing on the positive side, but also putting the fear in people. So if it’s insurance, saying things like ‘We know that you’re concerned about your family so therefore if you got seriously sick, without income protection without covering your total disability and sickness options … Every day you let go past, you are putting your family at risk. The sooner you sign this the better’. I’m not saying insurance isn’t a good thing – it is a good thing – but statistically, well, insurance is a game where [the insurer] can’t lose money.

Did you try to apply the techniques?

No! I’d feel like a fraud.

Did you realise there would be a lot of sales pressure when you switched to ‘frontline’?

You have to understand that the pressure comes from the way the salary is structured for financial planners. All the planners have a fixed salary, which is on the low side, and the rest they have to make up by meeting their sales targets. And this really impacts your behaviour with customers. It’s not hard to imagine that, if I’m just two or three sales away from my target that month and I’m sitting with a customer – well, what would anyone do? You push the sale. As some of my colleagues would say, ‘I’ve got to feed my family’. It’s pretty hard.

How did the culture affect your colleagues?

There was a colleague of mine and I thought he was a good financial planner, but he was not a good salesperson. He’s of Italian background and Centrelink referred clients to him if [clients] couldn’t speak English very well, because he speaks fluent Italian.

He was a good financial planner and he was a good person to work with the community and they loved him at Centrelink and the Italian community loved him, too. But he wasn’t a good salesman, he never made the target, so they sacked him.

Some of the emotional stress, you would not believe. It affects your whole personal life. If you don’t agree with management – if you offer another opinion, they say ‘You’re not a team player.’

Did customers ever say things like, ‘Well you would say that, you would recommend I take out this insurance product, because you work for the bank’?

That was a frequent [comment]. But the answer you’ve been scripted to say is something like, ‘Well, if you walk into a Ford dealership, you’re not going to find a Holden or a Toyota, but … we compare ourselves very favourably with these other products on the market, you can trust us, we are big and we’ve got the financial backing as a top ASX-listed bank’ or whatever. They have answers to every question.

So you had scripted answers to these kinds of questions and comments?

Oh yeah! It’s part of the sales training and part of the ethos.

Did you complain about the sales culture?

You can complain all you like, but no-one is listening. For ten years, at some of the banks, a lot of people have not had any pay rises at all. But all the executives – their bonuses are huge. They cut costs and drive the sales culture.

‘If you don’t agree with management – if you offer another opinion, they say “You’re not a team player.”’

Were your colleagues competitive with each other?

Oh yeah. One senior financial planner I worked with – he’s a gun! I have to say that he is very good at closing deals and selling. And he’s since become a practice manager, a kind of supercoach, so he’s teaching people how to do this stuff. I’m not saying he’s a bad planner, I’m just saying he is a really good salesman.

Did anyone ever pull you up on your attitude or your reluctance to be pushy and make sales?

Well, I always begged to differ [with the culture]. I thought, I am cut out to be a good financial adviser but just not in the mode you think I ought to be. [At one point], I said quite sarcastically, ‘Look, if I wanted to be a proper financial adviser, I would not work for a bank’.

I should have taken the decision ten years ago to leave and join a boutique place or set up on my own. But it’s very difficult to set up on your own because the professional indemnity insurance will just kill you. There’s a huge barrier to entry. That’s why there’s basically no independent financial advisers – or they’re few and far between.

And those independent planners usually only want to work with people who have quite a bit of money?

Correct.

Have you been following the Royal Commission into Financial Services? What do you think?

I can tell you that the Royal Commission is just scratching the surface. They have a lot of anecdotal examples, they’ve questioned all these bank executives on violations, and on not following the rules, but you can only do that up to an extent and then you have to say, ‘OK, then what? What caused these kinds of behaviours to happen?’

The fundamental issue is the remuneration of top executives. The top executives usually have a window of about five years to get their bonuses and share options. The stakes are so high! Why would these people behave differently? Of course they’re not willing to deal with certain issues!

Don’t get me wrong. Every country needs a strong banking system. It needs a profitable banking system, no doubt about it, but what is the adequate level of profitability?