Destination Dallas: Everything’s bigger in Texas

There’s a well-known saying in the United States regarding the nation’s second largest state, declaring that ‘everything is bigger in Texas.’ Located in the huge Dallas–Fort Worth metroplex, the city of Dallas is the most populous city in the fourth-largest metropolitan area in the country. It’s fair to say that big is what Dallas does best.

The city’s location in the middle of the United States makes it ideally placed for travel to and from other US cities, coast to coast, as well as offering significant global appeal, with nearby Dallas Fort-Worth being one of only a dozen or so airports in the world offering service to over 200 international locations.

Over the years, the region has hosted headquarters and major company operations from a diverse range of firms, with household names such as ExxonMobil, American Airlines, Toyota, and Dr Pepper all calling the region home. The Dallas Fort-Worth area boasts 22 Fortune 500 company headquarters and 42 headquarters from Fortune 1000 companies.

Global business is welcomed in Dallas. Situated in the heart of downtown, the Kay Bailey Hutchison Convention Center Dallas is one of the nation’s largest convention centres, with over a million people passing through its doors each year to attend major national and international conventions, meetings, concerts, and much more.

In nearby Fort Worth, north of the CBD, are the historic Fort Worth Stockyards. These 98-acres of land contain a former livestock market and celebrate the area’s long tradition as part of the cattle industry. The Stockyards are now used primarily for shopping and entertainment, promoting the image of Fort Worth as America’s Cowtown.

Dallas Fort-Worth is one of only a dozen or so airports in the world offering service to over 200 international locations
Dallas Fort-Worth is one of only a dozen or so airports in the world offering service to over 200 international locations

When visiting Dallas, you won’t to miss out on sampling the region’s famous cuisine. The taste for great BBQ permeates the city, with restaurants such as the Lockhart Smokehouse on West Davis Street offering an authentic Texan BBQ experience. Equally sought after are the city’s unique Tex-Mex dishes, which can be sampled at Herrera’s Cafe on Sylvan Ave.

Heading into the Dallas Arts District will quickly quench any thirst for the city’s artistic culture. The Dallas Museum of Art, the Nasher Sculpture Garden and the Morton H. Meyerson Symphony Center are all located here, in an area offering music, performances, exhibits and tours, along with a wide selection of dining and shopping venues.

As far as sports are concerned, Dallas doesn’t disappoint. Home of the world famous Dallas Cowboys, the AT&T stadium in Arlington is the fourth largest in the NFL, offering an exciting matchday experience. If soccer is your thing, then MLS team Dallas FC is located in nearby Frisco, at the Toyota Stadium.

Dallas is most famous for the mystery surrounding the assassination of President John F. Kennedy in 1963. In downtown Dealey Plaza, the Sixth Floor Museum is extremely popular, hosting special exhibits that explore the impact of this historic event. Whether or not you believe in the conspiracy theories, the museum is a fascinating place to spend an hour or two.

Before leaving Dallas, you simply must take a closer look at its incredible skyline. The historic Reunion Tower is one of the city’s most recognisable landmarks, and its 470-foot-high GeO-Deck offers 360-degree panoramic views that will take your breath away. With a selection of dining, cocktails and private parties also on offer, the view is just the start.

Whether you are staying for a day, or a week, or even a month, Dallas promises to provide you with plenty of big experiences.

Stay Alfred - Dallas

Our accommodation provider of choice when staying in Dallas is Stay Alfred, offering short or long-term stays right in the downtown core. Find out more at www.stayalfred.com.

Destination Chicago: Winter in the Windy City

As the third most populous city in the United States, Chicago is an international hub for finance, culture, commerce, industry, technology, telecommunications, and transportation. Known around the world as The Windy City, Chicago is located on the shores of Lake Michigan, one of the area’s five Great Lakes.

Chicago’s O’Hare airport is one of the busiest in the world, offering non-stop flights to 218 destinations in North and South America, Europe, Africa, Asia and Oceania. The Windy City is also known as the railroad capital of the US, with more than 1,300 trains carrying freight and passengers going in and out of the city each day.

Chicago boasts one of the world’s largest and most diversified economies, and is a key national player in a variety of sectors. Employing in excess of four million people, and generating an annual Gross Regional Product of over $609 billion, the city is home to more than 400 major corporate headquarters, 36 of which are in the Fortune 500.

The city’s McCormick Place Convention Center on the shores of Lake Michigan is the biggest of its kind in the United States. Comprised of four state-of-the-art buildings, the centre offers 2.6 million square feet of exhibit halls, as well as two four-star hotels, the Hyatt Regency McCormick Place and the Marriott Marquis Chicago.

In 2012, the city’s Mayor launched a new tourism organisation called Choose Chicago, with the aim of restructuring all tourism sales and marketing activities under a single agency with clear objectives. In 2018, Chicago tourism saw an all-time high of over 57 million visitors, making it second only to New York City as the most-visited city in the nation.

Chicago is well known for the architectural boom that rose out of the Great Chicago Fire in 1871, helping usher in the skyscraper era. The city’s Willis Tower, formerly Sears Tower, is the second tallest building in the Western Hemisphere. The tower’s skydeck on the 103rd floor is open to the public, providing spectacular views that span four states.

The Chicago Blackhawks, one of the original six NHL teams, play at Chicago’s United Center

A highlight of any Chicago visit is a boat tour down the river. Wendella boats is Chicago’s original architecture tour, offering a range of distinctive narrated tours, all focused on the city’s rich architectural heritage and history, including a lake and river tour, sunset cruise, and summer fireworks tour.

The range of exciting tours around Chicago doesn’t stop there. Head to East Pearson Street in the city’s Magnificent Mile district and board the Chicago Crime Tours bus to escape into Chicago’s underworld on a crime and mob tour, exploring the lives of criminals such as Al Capone and John Dillinger, and visiting historic landmarks like the Biograph Theatre.

Sports are something of a big deal in Chicago. In the North Side community area of Lakeview is world-famous Wrigley Field, home to the Chicago Cubs and the second oldest baseball park in the Major Leagues. The city also homes the Cubs’ fierce rivals, Chicago White Sox, who play in southern area of Park Boulevard at Guaranteed Rate Field.

Equally important in the city’s sporting calendar is ice hockey, which sees the Chicago Blackhawks, one of the original six NHL teams, play at nearby United Center. The arena is also home to basketball team Chicago Bulls, which enjoyed a period of sustained success in the 1990s with world-famous players such as Hall of Famer Michael Jordan.

Chicago has long been at the forefront of American economic, cultural and political history, with a standing as one of the most dominant Midwest metropolises.

Stay Alfred

Our accommodation provider of choice when staying in Chicago is Stay Alfred, offering short or long-term stays right in the downtown core. Find out more at www.stayalfred.com.

Charting a course through political and economic headwinds

Companies are now operating in an environment of increased uncertainty on the global, domestic and political stage.  Now, more than ever, companies have to be exceptionally engaged to plot a steady course and manage their political and economic risk.  

As 2019 gathers pace, the outlook is for greater uncertainty as state and federal political leaders grapple with volatile and impatient voters. Understanding these changes and addressing the impacts that they have will be a business imperative over the medium term for many businesses in Australia.

National political disquiet

Currently, the Australian electorate, like the business community, is restless, yearning for a return to stability but also change for the future.  This climate has concerns about state and federal governments of any political colour. Voters have recently demonstrated their preparedness to use the ballot box to punish and even change governments, especially where they believe their elected representatives are not meeting expectations. Dissatisfied with the lack of listening to or acting on concerns, the failure to demonstrate competence and the failure to implement their mandate – voters are making their views heard through the ballot box. The rise of micro parties and independents has also provided a vehicle for voters to demonstrate their dissatisfaction. The current Coalition Government was elected in 2013, in part, on the promise of a return to stable government after the tumult of the Rudd and Gillard governments. Voters were assured that “the adults would once again be in charge”.  However, in 2019, leadership changes and repeated public displays of disunity have created increased public dissatisfaction for the government and opinion polling shows public displeasure with the leadership in Canberra. While the Coalition can claim success on implementing its key long-term election commitments on the Economy, Tax Reform, Debt Reduction and National Security, polling would suggest that many voters believe the Government is not listening to their current concerns and they are looking at voting for a change.

Budget challenges

Contributing to the Government’s troubles has been its struggle to find a rhythm in its economic narrative during its two terms. Traditionally, first budgets for new governments can be tough and used to set a solid economic foundation. However, a hostile Senate to many of the Government’s changes stalled some budget reform measures and there were questions about a true mandate for many measures from the Coalition. In addition, the public vented its anger at unpopular measures, the Government not able to effectively bank any of the economic dividends and suffered much from the polling and credibility fallout. As we move into 2019, we have had a total of three Coalition Prime Ministers (Abbott, Turnbull, Morrison) but have also had three different Treasurers with each change (Hockey, Morrison and Frydenberg). These changes meant that the Coalition lost focus and ground in the area of its core Economic narrative and focus. The Government now faces a very difficult task: does it continue driving economic reform, deliver the long-promised surplus or does it pivot to a more popular budget to improve its standing with voters? It is a challenge to achieve all three in an election year. Many commentators are unsure that the electorate will reward the government for its economic management.  A predicted Labor win, will likely see another mini Shorten/Bowen Federal Budget before the end of the year. A new Labor government would then bring in the usual May 2 budget in 2020. This would equate to three Federal Budgets in 14 months. This uncertainty about the overall future economic direction of the country is also impacting business and consumer confidence.

State lessons

It is not just instability at the federal level that is feeding voter discontent and business uncertainty. At a state and territory level, voters have changed a number of governments over the past few years while others have internal challenges and look unstable. Both Victoria and Queensland have had one term governments. In the Northern Territory there have been attempted and sometimes successful leadership coups, frequent ministry reshuffles and members switching political allegiances from one party to another. Tasmania has also faced resignations and instability.

The recent re-election of the Berejiklian Coalition government in NSW does appear to go against this trend. On a first and optimistic glance, the electorate appears to have rewarded a stable and unified administration with a strong policy and economic track record. A deeper look, however, reveals that New South Wales has also overcome a change in Premier, Deputy Premier and Treasurer three times each in the current Coalition government. Despite its success, it has only just won the election and govern.  It will need the support of a number of cross benchers in both the lower house and the upper house to ensure stability over their next term. The sheer volume of micro parties and independents in the new NSW Parliament, mostly at the expense of the National Party, foreshadows challenges ahead.

Mitigating the risk for business

So what does this mean for business? CEOs depend on stability, both within their organisation, the sectors they operate in and the wider economic and political environments in which they operate.  Many are facing difficult challenges of their own and the uncertain political climate is adding to their concerns.

This year at the annual World Economic Forum in Davos Switzerland, PwC’s 2018 Annual Global CEO survey results were released (www.pwc.com/gx/en/ceo-agenda/ceosurvey/2019).  This survey is carried out each year by PwC and gives a useful indicator of CEO thinking around the globe.  The results both on a global level and also on the Australia sub-set are quite interesting, especially looking at the variations and trends year to year.

Concerns on growth: The PwC results the previous year saw a record jump in optimism regarding global growth prospects in 2018, and this exuberance translated across most of the regions. However, this year, there was a sharp adjustment and a big jump in pessimism for 2019, with nearly 30% of all CEOs projecting a decline in global economic growth, up from a small 5% last year. This is a record shift. CEOs also reported a significant decrease in confidence in their own organisations’ revenue prospects over the short (12-month) and medium (three-year) term. If CEOs’ confidence continues to be a leading indicator, which it has previously, global economic growth will likely slowdown in 2019.

Political & policy uncertainty: Across the global survey results there was a consistent theme of bunkering down as CEOs adapt to the government responses to the strong nationalist and populist sentiment across the globe. The threats the CEOs view as most concerning are less existential (e.g. terrorism, climate change) and more related to the ease of doing business in the markets where they operate (e.g. overregulation, policy uncertainty, availability of key skills, trade conflicts etc).

In the 2019 survey business leaders considered that Over-regulation (35%) and Policy Uncertainty (35%) were the greatest threats to business growth prospects.  Also rating highly were Geopolitical uncertainty (30%), Protectionism (30%) and Populism (28%). Issues like Terrorism (13%) and Climate Change (19%) have decreased considerably in the minds of the CEOs.

Not surprising for many is that the Australian CEOs are more concerned than their global counterparts on the same issues especially Protectionism (62%) and Populism (63%). They also consider the main threats to growth in Australia to be: Policy Uncertainty (89%) and Over-reregulation (84%) and Geopolitical uncertainty (73%).  These are differences of more than 30% in some cases.

A number of companies’ have tried to adapt to this tide of change. Back in 2015, PwC’s Annual Global CEO survey highlighted that 85 percent of CEOs agreed that government and regulators have some or a significant influence their business, with only 14 percent saying that they had little or no influence. Unsurprisingly, 67 percent of CEOs said they are making some or major changes to strengthen their engagement with government and regulators.

Mitigating the downturn

Clearly, the current economic and political climate requires a renewed focus, increased communication and stronger engagement. So, with the current political and economic instability in Australia, what should smart businesses be looking to do in 2019 to mitigate their political and policy risks?

1) Firstly, business needs to closely monitor what both state and federal governments are doing, especially with reforms and budget changes. Tracking potential changes is crucial to being able to engage in a timely and pre-emptive manner and mitigate any changes. In turbulent political times, government tends to make decisions in a shorter time frame; early warning and detection systems are critical.

2) Secondly, despite the uncertainty, business should strengthen their direct engagement with the politicians and their advisers, especially around important areas of interest and concern. This should include the cross-bench parities where appropriate. Educating key political leaders on business and the impacts of policy change is the best way to protect policy stability for business.

3) Thirdly, in order to further mitigate risk of sudden political changes, companies should also spend more time with its regulators and the key departments that impact its external environment.  In times of turbulent political leadership, the bureaucracy plays an even more important role. Especially in areas where there is limited consultation with business, the public service can advise elected decision makers of some of the implications and downstream effects of policy change.

4) Finally, and probably most importantly, what is needed internally within businesses is a change in mindset, increased resourcing, and senior leadership focus to ensure success.  To many companies, government is one of their most important shapers of their business environment. They need to be treated as such.  While companies can rely some practical steps through industry associations, chambers of commerce, forward thinking companies also need direct advocacy and engagement on key policy areas or issues.

Now more than ever, business needs to be vigilant and engaged as it charts its course through the current political and economic headwinds.

Nick Campbell is the Chair of the Nexus APAC Group. He has worked across the private sector and government on Strategy and Public Affairs. Find out more by visiting www.nexusapac.com.au

 

The path to a preventative mental health program in the law enforcement environment

The Australian Federal Police Association (AFPA) represents the professional, industrial and social interest of the Australian Federal Police (AFP) and law enforcement employees across a range of agencies.  

As an autonomous sub-branch of the Police Federal of Australia (PFA), the AFPA is the only branch which proudly supports over 4,000 members drawn from police officers and civilian employees.

With a small workforce the AFPA provides a lot of support to its members, especially in the ever-expanding welfare environment.

AFPA President Angela Smith said that the mental and physical welfare of the AFPA members and AFP employees is an ever-increasing role and it’s a role that the AFPA has had to adopt and learn rather quickly.

“Traditionally the role of the AFPA, like most associations or unions, has been in the industrial relations environment, and while still an important aspect of our business, we’ve had to expand our horizons and become involved in the welfare environment.”

“Mental Health issues of employees are becoming a serious issue for management for all police services across Australia, and most likely, across the world. On the surface, there is a lot of talk and campaigning about mental health awareness, but under that, there isn’t an array of programs for members to participate in to receive the support they require from the law enforcement organisations. It seems to be this space that the associations and unions are having to play a role in.”

“A large part of the problem comes down to funding. Police forces and services have limited funding, and when financial pressures descend on the organisations, it’s the corporate areas and usually welfare programs that are first cut to find funding for operational activities.”

“The AFPA really ramped up its role in welfare role over the past two years. Four AFP police officers committed suicide within the workplace over a two-year span, and we were seeing an increase in the number of members approaching the AFPA for assistance in the mental health welfare environment.”

“The AFPA isn’t a huge union and we have limited funding available to us, but with the four workplace suicides and increased reporting we knew that something had to change, and we had to break the cycle.”

“As part of this change, we knew that we needed preventative mental health programs. The AFP had started some of its own initiatives, but we knew that they weren’t as successful as they could be. This was down to a number of factors, but ultimately the biggest thing we learnt was that police officers don’t want to talk to people within in the organisation out of fear of repercussions or outcomes that may hinder their careers.”

“We also found that police officers want to talk to people with experience in the law enforcement environment. Policing is a unique environment, you can’t replicate it and you can’t pretend to have working in it. It really is one of those environments where you have to ‘walk the talk’.”

“With all of this in mind, the AFPA commenced talking with an organisation called OzHelp. OzHelp delivers evidence-based suicide prevention, physical and mental health training and support programs to thousands of people within multiple industries across Australia.”

“We knew that engaging with OzHelp was a big step forward, but ultimately we knew that a program as significant and far reaching as what we wanted to achieve would cost money. The AFPA isn’t a huge associate or union like the CFMEU or CPSU that both easily have over 100,000 members each, we have just over 4,000 members with a limited revenue stream, but we knew that we needed to find the finance to fund the program and start assisting AFP employees and AFPA members.”

“We were lucky that we have a good relationship with the Shadow Minister for Justice Clare O’Neil MP. We were able to pitch the idea for an external mental health program to her and she saw the positives that this would bring to the AFP.”

“It was only a few weeks ago, when Shadow Minister Clare O’Neil MP made the game changing announcement, committing $5 million to a dedicated mental health program to support frontline AFP members if the Australian Labor Party can win Government at the upcoming election.”

“To receive that announcement was fantastic because I know just how much the AFPA members and AFP employees need an independent, outside the organisation, preventative mental health program. People are just holding on, struggling day in and day out and fearful of self-reporting and not seeking help they need. Fingers crossed, we can give them this option in the future.”

“The Australian Labor Party commitment has given us hope that one day, the ‘Aware and Alive’ mental health program, as we have named it, will become a reality.”

“This journey and being involved in a number of mental health welfare issues within my membership has re-enforced to me that your workforce and people really are the backbone of your business, organisation or public service department, and that as a member of management and a workplace leader, we need to look after them.”

“The costs to businesses and organisation when your workforce is injured, physically or mentally is enormous and you probably don’t know the toll until someone falls over. I really am urging the executive and leadership of any businesses or organisation to invest money and time into the mental health of their staff.”

“It’s important to give your workforce options, people aren’t sheep, they are individuals that need preventative, ongoing programs that offer a variety of different pathways. What works for one person may not work for another, and importantly, rebuilding someone’s mental health takes time. You can’t nor should you expect someone to bounce back immediately. Compassion and understand in the workplace are critical to rehabilitation.

Angela Smith is the President of the Australian Federal Police Association (AFPA), www.afpa.org.au.

 

Financial advice – who needs it?

Wouldn’t it be great if you could manage your own money yourself over your entire lifetime? Wouldn’t it be great if you never needed anyone else’s help?

The answer to both of these questions is obviously yes. But the reality is that given the complexity of savings, investments and insurance, you are highly likely to need the help of a professional at some stage, particularly (but not exclusively) when nearing retirement.

Everyone’s financial situation, goals, needs and constraints are different. People also have different levels of financial literacy – some people have a great understanding of financial concepts and can manage their own money very well while others struggle for a variety of reasons, including a lack of time or even lack of interest. Complicating this is the fact that managing money can be complex. Superannuation, for example, is a political football. The rules around how much you can tax-effectively contribute and when and how you can access it frequently change as do the rules around qualifying for social security benefits. These complexities feed consumer confusion, distrust and stress which can profoundly impact lives in different ways. Financial advice from professional financial advisers helps people to navigate these complexities, providing them with solid financial plans, the foundations upon which both individual and family needs can be met.

The Banking Royal Commission

But there’s another problem, and it’s a big one. The Banking Royal Commission (the Royal Commission) has further undermined consumer trust in financial advice. In this way, in our opinion, it has done Australia a grave disservice – because, as already established, people need financial advice in order to navigate the complexities that have been created by successive Governments themselves. The Royal Commission did expose, as you might expect it to from its brief (an investigation into misconduct, not into conduct) some examples of poor financial adviser behaviour and poor outcomes for some financial advice clients. But there are currently around 28,000 financial advisers registered on the ASIC Financial Advice Register and therefore the vast majority were not found wanting by the Royal Commission.

At the height of the Royal Commission, we commissioned research, undertaken by CoreData, which looked into a number of financial advice issues.

What’s the value of advice?

The research, which resulted in our Value of Advice 2018 report, was based on a survey of 946 people, including those who did and those who did not receive financial advice, between 14 August 2018 and 3 October 2018. We asked people who did not seek advice why they didn’t, and the top three answers were:

  • “I can manage my own finances” – Nearly half (46.9 per cent ) don’t seek advice because they feel they can do it themselves
  • “It’s too expensive” – Almost a third (31.1 per cent) thought financial advice is too expensive
  • “I don’t think financial advisers are trustworthy enough” – Just over 1 in 10 (13.5 per cent ) felt they couldn’t trust a financial adviser

However, despite these misgivings, the vast majority of people who did not receive financial advice (71.1 per cent) said they would consider it. This is interesting because it suggests that they may be struggling without it, may realise the complexities of managing their own money could (perhaps as retirement approaches) become beyond them, or they may see, despite their misgivings that there is value in financial advice, or perhaps all three.

The other interesting finding was that people who receive advice reported feeling less stressed about money. In answer to the question: How often do you worry about money?, less than a quarter (23.5 per cent) said ‘at least weekly’ compared to almost half (47.2 per cent) of those without an adviser.

Advice in action

Financial advisers see the value of the work they do every day with their clients in the outcomes they are able to achieve for them. To help others understand this value, CoreData modelled three scenarios which reflect the financial circumstances of everyday Australians, as informed by our research and by Australian Bureau of Statistics (ABD) data. The scenarios were:

  • The Big Check-Up: A couple in their mid to late 50s, approaching retirement
  • Loss of a Partner: A widow in her early 40s, beneficiary of her late husband’s insurance policy
  • Upstarts: A couple in their early 30s, looking to get a head start in securing their financial future

A highly qualified and experienced financial adviser was then asked to provide the kind of ‘financial advice’ that might apply in each of those scenarios. Finally, a paraplanner working with the financial adviser modelled the three sets of scenarios using a financial advice software program to demonstrate likely outcomes, with and without financial advice.

The research and the scenarios demonstrated that there are three key benefits to financial advice – financial, emotional and behavioural – and they all play a vital role in improving financial outcomes and therefore quality of life.

Financial benefits

Financial advice leads to better financial outcomes. In a general sense, this could mean more income in retirement and/or lower interest payments on loans, lower tax bills, enhanced net wealth and the ability to face unexpected life events.

More specifically, in the case of our Big Check-Up couple, our scenario demonstrated that even a couple who were quite late to receive advice could be substantially better off as a result of that advice – potentially having 24 per cent more money in retirement and paying 35 per cent less tax over a lifetime than if they had not received advice.

Emotional benefits

What is less known is the emotional benefits of financial advice. A solid financial foundation provided by a good advice relationship leads to greater peace of mind and greater confidence in terms of being prepared for key life events, such as retirement.

Our research demonstrated the clear and significant emotional benefits emerging from the advice experience. Eight in 10 (82.7 per  cent) of advised clients said they are well or very well prepared for retirement compared to just a third (33 per cent) of people who do not receive advice. Most (79.4 per cent) advised clients also said that the financial advice relationship has given them greater peace of mind.

Our Loss of a Partner scenario demonstrated that our widow would be better off financially if she took advice, in that she would have twice as much money at retirement and 30 per cent more income over a lifetime than if she did not. But she would also have the support of an adviser at a time when she needed it most.

One of the less spoken about roles of advisers is the financial counselling and coaching they do with clients throughout life’s journey, including marriage breakdowns, births, deaths, retirement, redundancy and other significant events.

Behavioural benefits

Financial advice also helps people change their behaviours so that they take better control of their finances. This includes helping them to control their spending, manage debt and maintain good savings habits.

More than half (54.9 per cent) of the people surveyed who have advisers said they now save more as a result and 60 per cent said they are more prepared to handle sudden one-off costs. More than half (50.2 per cent) of these people said they could cover living expenses for six months or longer if they were suddenly unable to work whereas only around a quarter (26.2 per cent) of those who did not have a financial adviser said the same thing.

While the financial results modelled for the Upstarts showed that a young couple could have 27 per cent more wealth at age 61 and a better return on investment if they took financial advice, the behavioural impact on them would likely be just as important. It would help them to take control of their finances early on and adopt longer term structural habits that ultimately lead to better financial outcomes.

All in a day’s work

Still not clear on what financial advisers actually do? Here’s a snapshot.

  • Deliver a comprehensive financial plan tailored to the individual’s circumstances, financial and personal objectives
  • Track client progress towards goals and hold them accountable
  • Adjust financial plans and life insurance arrangements in line with changing needs, goals and lifestyle
  • Help clients improve their financial decision making and behaviours
  • Enhance client financial awareness and literacy
  • Review and adjust the client’s risk profile to ensure asset allocation remains appropriate to changing needs and objectives
  • Review investment asset allocation and performance and bring asset allocation back in line with target asset allocation and strategy
  • Review and update beneficiary nominations and asset ownership structures to ensure a client’s estate intentions are appropriately adhered to
  • Identify other issues such as the need to review wills, powers of attorney, tax planning, aged care

Financial advisers not only develop client specific financial plans that help their clients grow, manage and protect their wealth, they also help clients understand the discipline of maintaining, reviewing and sticking to that plan. And importantly, financial advisers help clients by holding them accountable for their own financial future.

Philip Kewin is CEO of The Association of Financial Advisers (AFA), www.afa.asn.au.

The necessity for your General Counsel to have a “seat at the table”

In early February, the Hayne Royal Commission delivered its report on misconduct within Australia’s financial sector. The Report named corporate boards of directors and senior management as the parties responsible for ethical lapses and business misconduct, and noted the interplay between the two as the crucial weakness point.

To overcome organisational culture failings, the Report stated the board must interrogate management, and senior management must provide the right information to the board to facilitate this accountability.   Though the terms of reference for the Hayne Royal Commission were focused on the Australian financial sector, it’s important to also consider the relevance of the renewed focus on organisational governance and oversight to the broader corporate sector.

A number of the eight recently-released Australian Stock Exchange Corporate Governance Council (ASX CGC) Corporate Governance Principles and Recommendations align with Hayne’s recommendations, including an obligation on companies to instill a culture of acting lawfully, ethically and responsibly; recognise and manage risk; and lay solid foundations for management and oversight.  The Australian Institute of Company Directors also agrees that “Ethical decision making sits at the heart of director practice.  Boards must set the tone that misconduct is dealt with swiftly and visibly”.

When it comes to “senior management,” there are many accountable C-suite parties. Among them are the chief executive officer (CEO), chief financial officer (CFO), and the leader of the corporate law department: the chief legal officer (CLO) or general counsel (GC).

As boards look to ensure compliance and companies look to assure a strong, ethical corporate culture, the CLO or GC has a crucial role. Within the GC position, ethics, compliance, the law, and risk all come together. As such, he or she is uniquely qualified to spot risks before they become true misconduct – helping companies to maintain a strong ethical foundation.

GC as a board ally

In all contexts, lawyers advise clients. For the GC, this client is the company. It’s not one department, it’s not a particular officer or employee, and it’s certainly not the CEO. His or her fiduciary duty is to the company. A director’s mandate is the same. Their duty is to the company alone.

With these interests aligned, the GC is a crucial ally to the board. It is the GC who spots possible ethical quandaries before they happen, who advises the company on compliance, and who can ensure that risk is taken into consideration at every step of the way. In the Hayne Report’s recommended cycle of (1) the board challenging management and (2) management providing the necessary information to the board, we assert that a third step is ensuring the GC has clear, direct access to the CEO and to corporate directors.

Effectiveness in the GC role

To be effective – to spot issues and risks – and then to elevate their importance, the GC needs to be well-positioned. He or she must have the access needed to become aware of any potentially risk-fraught company plans, then have the ability to discuss the risks with key company decision makers.

First, he or she should report to the CEO. This way, there are no intermediaries blocking access to the company’s top leader. This reporting structure also sends the message to all employees and stakeholders that ethics and compliance are important to the company. The GC has the CEO’s ear on these matters.

Surprisingly, in Association of Corporate Counsel (ACC) research on this topic, we’ve tracked that just under eight in 10 companies worldwide use this reporting structure for their CLO. The 2019 ACC CLO Survey, which includes insights from more than 1,600 CLOs in 55 countries, revealed that only 78 percent of GCs enjoy a direct reporting relationship to the CEO. Among respondents from Australia and the Asia Pacific region, this figure drops slightly, to 75 percent. This means that only three out of every four companies follow the governance best practice of having the GC report to the CEO. One in four does not, opening itself up to possible blindsides when it comes to questions of compliance.

Second, the GC needs to have a strong relationship with the board of directors. This ensures alignment in the company’s prioritisation of ethics and compliance. These crucial issues are addressed at board meetings, so ACC also tracks whether the GC or CLO is present at meetings of the board of directors. Just over two-thirds (68 percent) of all GCs who responded to the 2019 ACC CLO Survey state that they regularly attend these meetings of the board of directors at which key ethical and compliance issues will be discussed.

Notably, ACC tracked a correlation between these two indicators of a GC’s effectiveness. A GC or CLO who reports directly to the CEO is much more likely to “almost always” attend board meetings versus those who do not report to the CEO (75 percent versus 46 percent).  In the case of the Hayne Royal Commission, which points out the disconnect between the information the board knows and what the board should know when it comes to risk, it is unwise not to have the GC or CLO present at the board meetings.

We tracked similar figures when measuring how the CLO is viewed by fellow members of the C-suite. While 76 percent of all CLOs who report to the CEO stated that they are “often sought by the executive team for input on business decisions,” only 48 percent who do not report to the CEO answered affirmatively. Similarly, 79 percent of CLOs who report directly to CEOs say they “frequently meet with business leaders to discuss operational issues and risk areas,” compared to 62 percent who do not enjoy a direct reporting line to the CEO. This drop off could very well be the difference between a crisis averted and a crisis exploding.

A “seat at the table”

It certainly makes sense. Those who report to the CEO have more influence within the organisation. A CLO who reports to the CEO will have a “seat at the table” when it comes to executive team debates, boardroom discussions, and other events that shape a company’s strategic direction. With this ability to communicate risk to the CEO, C-level peers, and the board, the CLO also gives these leaders the information they need: a better understanding of how risk will affect the company. This is exactly what the Hayne Report said needs to happen more often. As written in the Report, “the evidence before the Commission showed that too often, boards did not get the right information about emerging non-financial risks … and did not do enough with the information they had to oversee and challenge management’s approach to these risks.”

With a more open dialogue, which is permitted through open access to the CEO, the GC will be able to provide better strategic advice, helping the company to mitigate risk and make strong business decisions that put ethics and compliance first.

Even outside of Australia and beyond the shadow of the Hayne Royal Commission, the need for a “seat at the table” is palpable. In Europe, the Danske Bank money laundering scandal may well have been prevented if the GC had the ability to communicate ethical lapses directly to the CEO. In 2012, Danske Bank’s GC had his reporting line redirected from the CEO to the CFO. In 2014, Danske in-house lawyers urged an internal investigation into whistleblowing investigations. Other senior executives overruled it from happening, so a full investigation never took place. Just a few short years later, the scandal erupted. We will never know what could have been prevented if the bank followed better governance practices. But the thwarted investigations alone demonstrate why putting roadblocks between the GC and the CEO is a bad idea.

The age of the CLO

Because so many business decisions today have legal considerations, most companies realise the importance of a well-positioned chief lawyer and design their corporate reporting structure accordingly. As we’ve seen with recent headlines, the entire health of an organisation depends on strong governance and ethical leadership. But on the other hand, with one in four CLOs in Australia and Asia Pacific stating that they do no report directly to the CEO, the potential for information to “slip through the cracks” is all too real. Without direct reporting lines to the CEO or the board, the risk for miscommunication – or lack of communication – creeps in. CLOs today have gained a stronger ability than ever before to shape the company’s future through contributing their analysis of risk, legal recommendations, and strategic business advice. But without the right governance in place, the law department loses its ability to serve as a crucial ally to the board. With best practices enacted, directors and the GC can ensure the right tone from the top and a proactive approach to matters of ethics and compliance.

Tanya Khan is the Vice President and Managing Director of the Association of Corporate Counsel (ACC), www.acla.acc.com

The CEO Journey: Is it time to capture your legacy?

As a successful CEO, you can look back at your career journey and breathe a sigh of relief knowing that you “made it” – and now what probably matters to you most is staying active, healthy and spending precious time with your closest family and friends.

Throughout your career, you took the path of what I call a “hero’s journey” – reaching the pinnacle position of your career.

You faced down challenges along the way, that at times, seemed insurmountable — with the glimpse of defeat within your sights.

But you didn’t give up.

Through your relentless perseverance, you overcame those challenges, even with criticism from those around you… defeat turned into success, your confidence grew, and so did the development of your
hard-earned wisdom that you continue to carry within you today.

Your story of how you overcame those difficult challenges, through your personal mindset and strategies – is your core innate wisdom and your legacy – that needs to be captured for future generations to come.

Your life partner, your kids, your grandkids, your closest colleagues, many of them have been observers of you throughout your career…. but do they really know and understand, at a deep level, your trials and tribulations, the tough decisions you had to make, the sacrifices you made on their behalf and the inner strength you drew on to reach your coveted and admired position as a successful CEO?

That is a question that you must consider and address, to make sure your story is captured, memorialised and appreciated, so ultimately, your legacy lives beyond you.

What is the true value of capturing your legacy and your story, your defining moments, your struggles and ultimate successes – to pass on to your closest family and inner circle in a tangible and timeless way?

Priceless….

What is the point of reaching the top of the ladder of success, becoming financially affluent and maintaining a healthy lifestyle, but never capturing your legacy in a way that those closest to you, can respect and learn from your own “hero’s journey”.

To those who care about you, you are a hero…but without your legacy captured and presented to them in a timeless and crafted masterpiece, they will never truly appreciate your journey and defining moments that you endured and experienced throughout the life of your career.

At first your own legacy story may not feel worthy of being captured and shared because after all, you may say to yourself; “Who would really care about my story? It seems ordinary to me…”.

You may discover though, that your career journey and story are priceless to those who care about you the most: your life partner, your kids, your grandkids, your closest colleagues and those in your inner circle.


Your CEO journey of how you overcame your career challenges throughout the years is your core innate wisdom and your legacy that you carry quietly within you.

It’s important to recognise the immense value of crafting your legacy story for those who care about you, so they truly appreciate the sacrifices you made along the way.

The CEO Journey™ framework, as you see on this page, was created from my many years of experience working directly with and mentoring CEO’s from all over the world as they reached their coveted positions.

There are certain innate phases that most CEO’s experience in their careers, that can be identified as milestones, before entering the next phase of their career – on their way to the top.

The reason why only a select few make it to the top of their organisations, is because the majority of aspiring CEOs do not have the same level of resilience, courage and self-reflection that you have – often, preventing them from achieving their ultimate goal.

This framework will re-awaken your appreciation of your own journey, and help you to begin to realise your story and legacy has immense value, not only to you, but to those who appreciate you the most.

You deserve a warm-hearted congratulations for making it through The CEO Journey™. Once you recognise and understand the phases of the journey and how they may relate to your personal career story, then you will know you have finally come full circle, ready to fully appreciate and value capturing your own legacy, for yourself and those in your inner circle.

Ari Galper is the Founder & CEO of CEO Legacy Books, the world’s most sought after craftsman of CEO journey stories, expertly designed into a highly personal and bespoke luxury coffee table book, giving your inner circle of family, friends, colleagues and peers a full an in-depth appreciation of your story. To learn more, visit www.CEOLegacyBooks.com.au.

A tax or attacks?

The simple solution to the burden of constant tax increases is for Australian governments to spend less.

Among the many theories of the development and origins of government, there is one theory in particular worth considering in the current economic and political climate. In his Power and Prosperity book, American economist Mancur Olson depicted different styles of government. Olson described anarchy as a system of roving bandits where, as the descriptor suggests, bandits roamed about stealing and destroying. Olson then described tyranny as a system of stationary bandits, where the smarter bandits worked out it was better for them to protect citizens from (other) roving bandits, thus allowing some degree of certainty and prosperity.

Stationary bandits provided what looked like basic governmental functions, protecting citizens from roving bandits and encouraging some degree of economic activity. However, in return, the stationary bandits charged a protection fee. Notably in both cases, citizens were ‘governed’ by bandits and they collected what generally could be considered as taxes.

Which brings us to the Australian fake tax wars of 2018 where, at least at the Commonwealth Government level, both major political groupings are discussing where to increase and decrease tax, but all within an envelope of increased total taxation; oblivious to the words of Milton Friedman, who said that “if a tax cut increases government revenues, you haven’t cut taxes enough”.

In addition to taxation being the only form of revenue legally permitted to be collected through physical force, the interaction of taxation and inflation offers government finances a magical privilege. Through inflation, governments can generate increased tax revenues without increasing tax rates.

This is not a fault of the system. This is a design feature. Wage price inflation generates additional income tax, and payroll tax. Consumer price inflation generates additional goods and services tax, and fringe benefits tax. Asset price inflation generates additional land tax, capital gains tax, and stamp duty. And even when taxes do not auto-inflate, governments index such taxes.

There are not too many entities that can generate additional revenue from just standing still. Yet despite the inflation privileges of taxation, plenty of people believe taxes are not rising enough.

Since the election of the first Kevin Rudd Government in 2007, and progressively following the onset of the global financial crisis in 2008, there have been repeated calls for increasing and broadening Commonwealth Government taxes so as to “repair the tax base”.

Recently, former Rudd-Gillard-Rudd Government Minister of State and economic advisor to former Prime Minister Bob Hawke, Dr Craig Emerson, wrote in the Australian Financial Review that:

“… while Left and Right slog it out, the only prudent course for a responsible federal government is to repair the tax base, bring the budget back to surplus quickly, pay down debt as fast as possible and protect Australia against the coming global recession.”

One might have thought Government fiscal ‘prudence’ is better reflected through caution in spending rather than aggression in taxation, but we live in interesting times. Unfortunately, the views of Dr Emerson are not uncommon. The view of many—too many—is that the means to fortify government finances requires, unfortunately but necessarily, damaging the finances of households and businesses. For the greater good, of course.

To suggest Government tax bases were somehow damaged post-2007-08, necessitating repair, is grounded in rhetoric rather than reality. What actually occurred is that government tax revenues failed to keep up with insatiable government spending levels.

More specifically, tax revenues have failed to meet the cost of expanding, expensive and often ineffective government programs while attempting to maintain a facade of fiscal responsibility.

According to Australian Bureau of Statistics (ABS) data, total taxation receipts across the three levels of Australian government increased 40 per cent from $349 billion in 2007-08 to $489 billion in 2016-17. For the Commonwealth Government only, total taxation receipts increased from $286 billion in 2007-08 to $390 billion in 2016-17. That’s a 36 per cent total increase, or a cumulative average annual increase of 3.1 per cent.

While the quantum and rate of growth in taxation receipts is high, it should also be considered in the context of population with the total number of Australian residents increasing by 3.4 million persons over the same period. Yet over the same 10-year period, the average amount of taxation collected by all levels of government per resident (man, woman and child) increased from $16,449 to $19,888 per annum, or 21 per cent.

The average two-adult, two-child household is paying an additional (roughly) $14,000 per annum in tax since 2007-08. Not to mention more in other Government fees. But are households $14,000 better off?

Lessons not learned

The view that Government fiscal prudence requires increased taxation seems also to reflect poor learnings from earlier Australian government debt and deficit predicaments.

Whereas once the lesson of government deficit crises was to constrain government spending, it appears current thinking is that taxes need to be increased so as to never interfere with Government spending.

When it comes to spending, Australian governments are addicted, irrespective of their political flavour.

Our political masters have a cognitive bias to action which—paraphrasing HL Mencken— translates that for every complex problem, there is a government program that is grand, expensive, yet ineffective. Seldom does a government voluntarily propose a withdrawal of funding or reduction of regulation in response to a public policy challenge. And all too frequently, governments propose interventions when there is no public policy challenge or otherwise grounds for government involvement. Consider, for example, the nationalisation of metropolitan broadband internet infrastructure.

The only visible difference in the spending patterns of different political parties seems to be the speed of expenditure growth. When it comes to trajectory, spending is always increasing because Australian governments always seem to find new and better ways to spend other people’s money.

Based again on ABS data, in the 10 years to 2016-17, total spending across the three levels of Australian government rose from $387 billion to $624 billion; an increase of $238 billion or 61 per cent. The Commonwealth Government, never satisfied in coming second in any spending race, increased its spending by $172 billion or 62 per cent over the same period. This is a cumulative average annual increase of 4.9 per cent; faster than inflation, and faster than average wage growth.

More concerning is that Government spending grew faster than GDP over the same period; demonstrating the government sector grew faster than, and at the expense of, the non-government sector.

As a proportion of GDP, total Government expenses increased from 33 per cent to 36 per cent, and Commonwealth Government expenses increased 24 per cent to 26 per cent.

Yet despite this strong increase in government spending, it is argued the actual problem for Australian governments’ finances is tax-base erosion.

Where all this additional spending has gone is not entirely clear. But according to the ABS data, one area that has done quite well has been the public service, whose ranks have increased by 200,000 nationally, and whose salary costs have increased by some $50 billion over the 10 years.

Interestingly and concerningly, the total number of Australian public sector employees—excluding permanent defence force members, overseas embassy and consulate employees, and employees on workers’ compensation—is greater than the population of Tasmania, and also greater than the population of South Australia.

Budget deficits burden

In his 1964 A Time for Choosing speech, Ronald Reagan said, “No nation in history has ever survived a tax burden that reached a third of its national income”. The only reason tax authorities in Australia don’t collect 36 per cent of national income is because of miscellaneous pseudo taxes, such as fines, levies and licences, and because in aggregate, Australian governments run budget deficits.

As noted earlier, over the 10 years to 2016-17, cumulative average annual increase in total government spending was 4.9 per cent, whereas the cumulative average annual increase in taxation revenue was 3.1 per cent.

This gap can be explained through other government fees and, significantly, through debt. This contributes to explaining why, according to OECD analysis, since 2012 the only advanced countries that contracted more debt than Australia (Commonwealth and State governments) were Spain (one of the PIIGS), Latvia (a former Soviet satellite state), and Slovenia (a former Yugoslavian province).

If Australians were to ask how we got here, a possible explanation might be offered by Albert Nock. In 1939, writing in American Mercury, Nock noted that:

“… like all predatory or parasitic institutions, (Government’s) first instinct is that of self-preservation. All its enterprises are directed first towards preserving its own life, and second, towards increasing its own power and enlarging the scope of its own activity.”

Nock’s words, some 80 years ago, need to be considered in the context of governments of his day, which were much smaller in size and much narrower in focus. Basically, the parasite did what parasites do. And our own very special parasite also did what it does because our political system incentivises and rewards bad behaviour. Mix in poor civics and economics education with social media and sprinkle a touch of virtue-signalling dust, and you get a system of asymmetric budgetary costs and benefits. Increased spending plus increased taxing has a higher political payback than decreased spending plus decreased taxing.

These asymmetric returns are due, not insignificantly, to the distribution of taxpayers and Government spending beneficiaries.

In a recently published analysis, The Centre for Independent Studies (CIS) showed the bottom 60 per cent of households received more in benefits than they paid in taxes, including GST and excise taxes. And 60 per cent of households translates into more than 60 per cent of voters. As the CIS noted, Australia has a cohort of citizens who “vote for a living”, causing significant challenges for public and fiscal policy.

Perhaps it is time for a new system. People respond to structures and incentives, so perhaps that system should be based on the Code of Hammurabi.

Hammurabi was a Babylonian king who reigned from circa 1810 BC to 1750 BC. He implemented a legal code based on the principle of retaliation, an eye-for-an-eye or lex talionis. Hammurabi’s Code ensured many things, but certainly it ensured skin in the game. People advocating for government action should not be insulated from the consequences of that action. But our system of government relies on a clerisy of advisors and bureaucrats who provide frank and fearless advice.

That is, advice disconnected from the consequences of taking that advice. This is somehow considered virtuous and desirable.

Applying Hammurabi’s Code to construction would mean that if a builder built a house poorly that resulted in the death of the owner, then the builder would be put to death.

Similarly, if the building owner’s son was killed from bad construction then the builder’s son would be put to death.

Using these principles, it should not be permissible for people to advocate for taxes on other people, or that disproportionately affect other people. For example, in increasing taxation on private superannuants when the advocate is a recipient of a public superannuation should not be permissible.

Similarly, government spending should not be funded through debt, a process by which someone else at a later time pays for the spending.

Australian governments’ fiscal trajectories are heading in an unsustainable direction. The solution to budget deficits and government debt is not more taxation. It is reduced government spending.

More importantly, Australians need to understand that the default to any issue or challenge is not government. As American economist Thomas Sowell said, “Politicians can solve almost any problem—usually by creating a bigger problem.”

Dimitri Burshtein is an Australian financial services executive and company director. This article was originally published by the Institute of Public Affairs: ipa.org.au.

Novita Healthcare (ASX:NHL) MD Glenn Smith podcast

Glenn Smith is Managing Director of Novita Healthcare, a medical technology company listed on the ASX.

Novita is focused on the development of innovative TALI technology through its subsidiary TALI Health, with the aim of becoming a leader in the assessment and treatment of childhood attention difficulties by pioneering digital solutions for children across the world.

In this podcast, Mr Smith discusses the company’s commitment to developing research-driven software, its growing line of exciting products, and the significant returns on offer for investors in a number of global markets.