Last week I periodically blogged - albeit almost wordlessly - from the PAA workshops. Having just put together the project plan for authorisation for the PAA I now have the results of all the workshops assembled together. With those thoughts organised I thought I would share with you some observations:
1. There is no single plan available. There's lists of stuff from ETITO, another list from the Securities Commission, various bits from training providers, but what the PAA advisers found really helpful was doing a plan on the whiteboard from their point of view. Well, there is a plan available now! Watch the PAA for it's release.
2. There was a real thirst for looking at the business issues - all the compliance jargon is meaningless unless its brought back to business decisions: so we spent some time in most workshops looking at how each adviser will have to define in their ABS the areas in which they will give advice, and how they might choose those areas based on some analysis of their current business and skills.
3. The corporate structuring issue was brought out in only a couple of workshops, but it's a vital part of the plan. Now there is a real additional cost to complicated corporate structures (one adviser I met has a company for life insurance advice, a company for non-life insurance advice, and a company for investment business) that's a structure that's being re-assessed in the light of the need to register each business as a Financial Service Provider.
4. There are three distinct kinds of advisers:
a) Overwhelmingly, those committed to AFA. They don't have any hang-ups about the whole thing, or have got over them.
b) A small minority following a different path - either RFA or QFE - because they have businesses that best fit this model.
c) Another small group that is grumpy as all hell, and although they know that the right route is AFA they are unhappy and delight in having the opportunity to express that unhappiness. This group is hard to help.
5. Time versus Money was always an issue. I just let it come out in every workshop: someone would complain about the $28 for the ETITO self-evaluation tool and then I would pounce on it with delight. This is the real business planning issue.
We then worked out the hourly rate for advisers - lets say with revenue of $150,000 the hourly rate is bout $75 an hour. But then we'd look at the rate for the hours that are revenue generating - people would shout out about 10 to 20 - so looking at about 15 hours a week we get up to about $210 an hour - quite reasonable. Then we'd work through the plan and look at the hours of work required to comply.
Now we are back at the office the estimate is between about 90 hours to something a little over 600 for someone basically starting from scratch. Now this is the cost - not the $28 for the ETITO tool - it's the time.
But we did not just leave them with the problem - we then talked about prioritisation. Put the revenue generating hours into your plan first, then put in the compliance project hours, and manage the rest. If you don't want to earn less - and most of us don't - we came up with a variety of ways to manage - essentially the core three are:
a) Work longer hours
b) Delegate (and hire so you can, if you haven't got staff already)
c) Stop wasting time / doing what's less important (look for tasks you don't enjoy