Financial Planning Industry This situation analysis will look at the financial planning industry. It will explore if there are any requirements to be able to provide financial advice to the public, who are the governing bodies and what laws and regulations are in place for this industry. It will also look at the macro environment how it affects the industry, such as the political and environmental environments. There will be a SWOT analysis as well as looking at what customers want out of this type of service and who the main competitors are. Industry overview Aurelia Fin wants to start a financial planning firm together with her partner, Finnley Gold. She has a degree in financial planning from the University of Canberra. Aurelia has not had any professional experience in this field. To be able to practice as a Financial Planner in Australia the individual, needs to hold an Australian Financial Services Licence (AFSL). The Financial Planning industry is heavily regulated and in order to provide planning advice individuals needs to meet standards defined in ASIC’s (Australian Securities and Investments Commission) Regulatory Guide (CPA Australia, 2013, ‘How to become a financial Planner’). According to ASIC’s surveys in 2010 the average age of people who had used a financial planner was 54 years of age, they had on average $254,000 in super, had an average annual salary of $74,000 and over 50% owned their primary residence outright. They rated their experience with dealing with financial planner as 5.5 out of 10 (ASIC, 2010, ‘Access to financial advice in Australia’). Knowing these figures are factors of the success of the financial planning industry. It is important for companies to know who they are targeting their services at, how much the business can capitalise on these clients and how they need to improve their business practices. According to IBIS World, an Australian Market research company, in 2013 there were 16,757 jobs in the financial planning industry. This number includes all roles in the financial planning industry, including administrative and customer service roles. The industry is also stated to produce $4 billion in revenue (IBIS World, 2013, Financial Planning and Investment Advice in Australia: Market Research Report). IBIS World also recorded that the annual growth for the industry between 2009 to 2014 was 2.5%.The Australian government announced a complete overhaul of the industry and it is expected that the industry will struggle as it adapts to the new regulatory environment along with low consumer confidence. IBIS World also reported that 47.4% of the market share was held by the big four banks (Commonwealth bank of Australia, ANZ, Westpac and NAB) along with AMP (IBIS World, 2013, Financial Planning and Investment Advice in Australia: Market Research Report). With 3,222 financial planning businesses across Australia and the big banks commanding 47.4% of the market share, independent firms have stiff competit ...

1. Financial Planning Industry
This situation analysis will look at the financial planning
industry. It will explore if there are any requirements to be able
to provide financial advice to the public, who are the governing
bodies and what laws and regulations are in place for this
industry. It will also look at the macro environment how it
affects the industry, such as the political and environmental
environments. There will be a SWOT analysis as well as
looking at what customers want out of this type of service and
who the main competitors are.
Industry overview
Aurelia Fin wants to start a financial planning firm together
with her partner, Finnley Gold. She has a degree in financial
planning from the University of Canberra. Aurelia has not had
any professional experience in this field.
To be able to practice as a Financial Planner in Australia the
individual, needs to hold an Australian Financial Services
Licence (AFSL). The Financial Planning industry is heavily
regulated and in order to provide planning advice individuals
needs to meet standards defined in ASIC’s (Australian
Securities and Investments Commission) Regulatory Guide
(CPA Australia, 2013, ‘How to become a financial Planner’).
According to ASIC’s surveys in 2010 the average age of people
who had used a financial planner was 54 years of age, they had
on average $254,000 in super, had an average annual salary of
$74,000 and over 50% owned their primary residence outright.
They rated their experience with dealing with financial planner
as 5.5 out of 10 (ASIC, 2010, ‘Access to financial advice in
Australia’). Knowing these figures are factors of the success of

2. the financial planning industry. It is important for companies to
know who they are targeting their services at, how much the
business can capitalise on these clients and how they need to
improve their business practices.
According to IBIS World, an Australian Market research
company, in 2013 there were 16,757 jobs in the financial
planning industry. This number includes all roles in the
financial planning industry, including administrative and
customer service roles. The industry is also stated to produce $4
billion in revenue (IBIS World, 2013, Financial Planning and
Investment Advice in Australia: Market Research Report).
IBIS World also recorded that the annual growth for the
industry between 2009 to 2014 was 2.5%.The Australian
government announced a complete overhaul of the industry and
it is expected that the industry will struggle as it adapts to the
new regulatory environment along with low consumer
confidence. IBIS World also reported that 47.4% of the market
share was held by the big four banks (Commonwealth bank of
Australia, ANZ, Westpac and NAB) along with AMP (IBIS
World, 2013, Financial Planning and Investment Advice in
Australia: Market Research Report).
With 3,222 financial planning businesses across Australia and
the big banks commanding 47.4% of the market share,
independent firms have stiff competition(IBIS World, 2013,
Financial Planning and Investment Advice in Australia: Market
Research Report).
Situation analysis
Political forces
The financial planning industry is heavily regulated. The
Treasury regulates the industry through the FoFA (Future of
Financial Advice). There has been recent reforms to this
regulatory document put in place to protect the public, it
includes an ‘op-in’ requirement that requires advisers to obtain

3. written confirmation from their clients every 2 years in order to
charge on-going fees (for new clients only), advisors must
provide an annual disclosure statement to their existing clients
detailing fees and service information (PWC, 2013, Future of
Financial Advice).
It also requires advisers to act in the best interests of their
clients, there is also a ban on “any form of payment relating to
volume or sales targets from any financial services business to
dealer groups, authorised representatives or advisers, including
volume rebates from platform providers to dealers” ,(The
Treasury, 2011, Future of Financial Advice, pg 5, para 7),
meaning that financial advisers advice will no longer be bias (in
the past advisers could be paid a commission by product
providers for getting their clients to use their product). They
also increased ASIC’s licensing and banning powers (PWC,
2013, Future of Financial Advice (FoFA)).
ASIC provides the guidelines and authority in issuing
Australian Financial Services Licences (AFSL) that all financial
advisers are required to have in order to provide financial
advice to the public. ASIC has minimum training and
experience standards that must be met in order to obtain a AFSL
(ASIC), 2012, Regulatory Guide 146 Licensing: Training of
financial product advisers).
Economic forces
An economic force that affects the financial planning industry is
interest rates. Interest rates increase when the economy is
strong and decreases when it is weaker. The Reserve Bank of
Australia (RBA) influences the interest rate structure by
controlling cash flow in Australia. It issues currency
(controlling cash flow) and conducts national monetary policy
and is owned by the Australian Government (Kidwell, D, S et
al, 2007, Financial Markets Institutions and Money).
Sociocultural forces
Sociolcultural forces that affect the financial planning industry

4. include; an increasing age expectancy of the public (or an aging
population), preferred retirement age lowering, increasing
responsibilities with regards to raising children, tertiary
education participation increasing, increasing single parent
families and larger homes. The increased concern with
accumulating material possessions has meant longer working
hours and increased goal aspirations also contribute. (Cull, M ,
2009, The Rise of the Financial Planning Industry).
The FPA’s (Financial Planning Association of Australia) ‘Code
of Professional Practice’ provides guidelines for financial
planners. Financial planners who are a member of the FPA are
bound by their code of practice. They are: “Client first,
Integrity, Objectivity, Fairness, Professionalism, Competence,
Confidentiality and Diligence” (FPA, 2013, Code of
Professional Practice, pg 6-7). If members do not abide by these
codes they can be stripped of their membership. This
membership is highly regarded in the financial services industry
and is seen as a requirement by the profession in order to
provide financial advice. This membership is what individuals
look for when seeking a reputable financial advisor.
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Technological forces
The development of computers and the World Wide Web
provides customers instant access to information they require in
light of the modern fast paced life. Financial institutions can
use the curret technology to advertise their range of financial
products. This along with high domestic and international
competition has meant that clients are now seeking independent
financial advice) Cull, M, 2009, The Rise of the Financial
Planning Industry).
Technology can make it hard for small financial planning firms
to compete as they may not have as extensive of a website as
the Commonwealth Bank or offer an extensive range of products

5. as a larger firm but they have the opportunity to market their
business as a personalised service to which the larger firms do
not offer.
Legal forces
The financial planning industry is bound by the following; “The
Corporations Law (including the Financial Services Reform
Act) and the common law” (Taylor, S, Juchau, R & Houterman,
B, 2010, Financial Planning in Australia, pg 84, para 4). The
Financial Services Reform Act, which was enacted in 2001 has
brought into line the same disclosure standards for similar
products, financial advisers are subject to the same licensing
regime and comparable financial products are now subject to the
same rules (Common Law, 2005, Financial Services Reform Act
2001; Act no 22).
ACIS is responsible for issuing Australian Financial Services
Licence’s (AFSL). Financial advisors are required by law to
have an AFSL in order to provide financial advice to the public.
It required the financial advisor to meet the minimum training
standards, once the training is completed the advisor must then
need to operate under an existing licence holder and complete
the experience component of the licensing requirements. Once
an advisor has successfully meet these criteria’s they may be
issued an AFSL. It is up to the ACIS whether or not an advisor
is issued a licence(ASIC, 2012, Regulatory Guide 146
Licensing: Training of financial product advisers).
Competitor analysis
The financial planning industry is an oligopoly, with 47.4% of
the market share was held by the big four banks
(Commonwealth bank of Australia, ANZ, Westpac and NAB)
along with AMP (IBIS World, 2013, Financial Planning and
Investment Advice in Australia: Market Research Report). It is
predicted that due to the new regulatory and econonomic
environment that financial planners will gravitate to bank
controlled dealer group (Liew, R, 2012, Mergers squeeze
financial planning options).

6. In the 2011/2012 financial year the Commonwealth bank made a
$373 million play for the independent financial planning group
‘Count’, the Australian Competition and Consumer commission
gave its approval for the deal to go ahead (Liew, R, 2012,
Mergers squeeze financial planning options).
Commonwealth Bank is a multinational bank, operating
throughout Australian, New Zealand and Asia (CBA,
Privatisation (1991) and subsequent developments). With NAB,
Westpac and ANZ all operating as multinational banks, with
branches in places such as the Middle East and Europe, they
have a large competitive advantage. With AMP predominantly
operating in Australia and New Zealand, but is expanding its
international presence.
The big for banks have a wealth of employees with the
necessary financial skills that make their businesses so
successful. As Aurelia and her business partner do not have any
experience in the financial advisory industry dor do they have
any competitive advantage. They have knowledge of financial
planning but no life experience in dealing with the industry. It
would be very hard for Aurelia and Finnley to compete with
such large competitors.
Customer/client analysis
The type of advice people want when using a financial adviser
is; superannuation advice, financial investment advice and
property investment advice. With the younger demographic
more likely to seek property investment advice and the older
demographic seeking advice about superannuation and financial
investment advice (ASIC, 2010, Access to financial advice in
Australia).
The AFA’s market research found that 32% of clients of
financial advice were aged between 40-59 years of age and a
staggering 59% were aged 60 years and over. With only 6% of
clients aged between the ages of 25-39 years (AFA, 2013,

7. Market Research; The New Frontiers). In ACIS’s ‘Access to
Financial Adivce Australia’ it states that only 20-40% of the
population use or have used a financial adviser (ASIC, 2010,
Access to financial advice in Australia). The largest proportion
of people of working age (aged between 15-65 years of age) was
located in the Northern Territory and the ACT with Tasmania
being the lowest. The majority of people aged 65 years and over
lives in Tasmania, Victoria and NSW (ABS, 2012, Population
by Age and Sex, Regions of Australia).
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_____________________________
Strengths
· Offering personalised services
· Can choose which area to specialise in such as superannuation
· Aurelia could go an gain professional experience and licensing
before starting a firm, gaining a reputation and client base
which she could bring across to her firm
Weaknesses
· Inexperienced and ill-equipped business partners
· Lacking appropriate licences
· Lack professional memberships
Opportunities
· Potential to add a third business partner, a financial planner
with an AFSL, gaining years of experience and industry
knowledge
· The large proportion of working aged people in Canberra –
especially between the ages of 40-65yrs
Threats
· Unable to start a financial planning business without a
financial planner that has an AFSL
· Largest portion of people who use financial planners are 65
years +, live in a different locality and most likely already have
a financial adviser

8. Objectives
List the organisation’s overall objectives or its mission
statement.
List the marketing objectives that are intended to help achieve
the organisation’s overall objectives.
Ensure the marketing objectives are:
Target marketDiscuss the organisation’s target market
segments, their characteristics and how the target market and
market segments were selected. Be specific; for example, if the
target market is urban 25–30 year old single males, then say so
— do not say young single men.
You need to quantify your target market – How many 25- 30
year old single males are in Belconnen? (ABS data)
You may also want to consider organisational customers e.g
hospitals, accountants etc.
How will you segment the market?
Single target market?
Multiple target market?
Combined
Segmentation basis: demographic, lifestyle, benefits sought?
Marketing mix strategy
Product
Detail the product strategy and how it will offer value to the
target market. Include a discussion of branding. While you
might not include a total product concept analysis of the
product in your marketing plan, it may be a useful exercise to
inform the information that does end up in the plan.
Positioning

9. Branding
Service
Packaging
product life cycle considerations
Price
Detail the pricing objectives (e.g. cash flow, positioning and
market share) and the pricing method(s) used to determine
prices. Competitors’ pricing should also be discussed.
Consider:
basis for setting prices
Major price points
Discounts and incentives
In the budge section you will provide breakeven point ( no
cashflow and profit and loss will be required).
Promotion
Explain the promotion mix that you will use ( identify
suitability and costs)
(advertising,
public relations,
sales promotions and
personal selling
online
social media).
Consideration should also be given to additional marketing
communication options such as guerrilla marketing, sponsorship
and viral marketing if appropriate for the organisation.
After analysing each of the options – which one(s) will you use
and why?
promotion to end consumer? Or intermediaries?
provide a schedule and then a detailed budget for promotion in
the budget section
Distribution (place)
Detail the distribution strategy that will ensure the

10. organisation’s products are available to customers where and
when they want them. The discussion should address the use of
marketing intermediaries if appropriate to the organisation’s
distribution strategy and the location of your business if that is
important. If appropriate also look at sourcing
BudgetDetail the budgetary requirements of the marketing plan
and demonstrate how the plan can be implemented with the
available resources.
Identify the major:
variable costs ( ingredients, components)
fixed cost (rent, wages, advertising etc)
Identify a breakeven point- how many items do you need to sell
to break even?
The breakeven point may not be able to calculated in all
circumstance- if that is the case provide as much data as
possible , sourced from MINT, annual reports or press reports (
for example you might find the development costs for a
particular product reported in the press).
You need to provide an estimate of how many of your product
you intend to sell and justify this based on your target market
and competitor analysis.
You also need to provide a schedule and costing for your
promotional activities
ImplementationExplain how the marketing plan will be put into
practice, including specific steps and milestones as well as
control mechanisms to ensure the implementation is in
accordance with the plan.
Time line
When what will be done and who is responsible
EvaluationDetail the marketing metrics (e.g. return on
investment, customer satisfaction) that will be used to evaluate
the success of the marketing plan and inform further revision
and refinement of the plan.

11. References
Australian Bureau of Statistics (ABS), 2012, Population by Age
and Sex, Regions of Australia, ABS, Australia, viewed 16
September 2013
http://www.abs.gov.au/ausstats/[email protected]/Products/3235
.0~2012~Main+Features~Main+Features
Association of Financial Advisers (AFA), 2013, Market
Research; The New Frontiers, AFA, Australia, viewed 16
September 2013
http://www.afa.asn.au/documents/item/219
Australian and New Zealand Bank (ANZ), History, ANZ,
viewed 17 September 2013
http://www.anz.com.au/about-us/our-
company/profile/facts/history/
Australian Securities & Investments Commission (ASIC), 2010,
Access to financial advice in Australia, viewed 16 September
2013
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rep2
24.pdf/$file/rep224.pdf
Australian Securities & Investments Commission (ASIC), 2012,
Regulatory Guide 146 Licensing: Training of financial product
advisers, ASIC, Australia
Common Law, 2005, Financial Services Reform Act 2001; Act
no 22, Common Law, Australia
Commonwealth Bank Australia (CBA), Privatisation (1991) and
subsequent developments, CBA, viewed 17 September
2013https://www.commbank.com.au/about-us/our-
company/history/privatisation.html

12. CPA Australia, 2013, How to become a Financial Planner, CPA,
Australia, viewed 17 September 2013
http://www.cpaaustralia.com.au/professional-
resources/financial-planning/policy-and-research/how-to-
become-a-financial-planner
Cull, M , 2009, The Rise of the Financial Planning Industry,
The Australasian Accounting, Business & Finance Journal,Vol
3, No 1, viewed 17 September 2013
http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1050&context
=aabfj
Financial Planning Association of Australia (FPA), 2013, Code
of Professional Practice, FPA, Australia
IBIS World, 2013, Financial Planning and Investment Advice in
Australia: Market Research Report, IBIS World, Australia
Kidwell, D, S et al, 2007, Financial Markets Institutions and
Money, Wiley, Milton, QLD
Liew, R, 2012, Mergers squeeze financial planning options, The
Financial Review, Australia, viewed 17 September 2013
http://www.afr.com/p/personal_finance/portfolio/mergers_squee
ze_financial_planner_LwgrKht7xsMM3AEBLnBV8O
PricewaterhouseCoopers(PWC), 2013, Future of Financial
Advice (FoFA), viewed 17 September 2013
http://www.pwc.com.au/industry/financial-services-
regulation/fofa.htm
Taylor, S, Juchau, R & Houterman, B, 2010, Financial Planning
in Australia, Lexisnexis Butterworths, Australia
The Treasury, 2011, Future of Financial Advice, viewed 17

13. September 2013
http://ministers.treasury.gov.au/Ministers/brs/Content/pressrelea
ses/2011/attachments/064/064.pdf