Legislation and compliance can be major headaches. Here’s how Charles Knight Finance’s George Collings stays ahead of the game.
MPA brings you advice from the industry's thought leaders on their biggest business challenge and how they tackled it. This week we speak with George Collings, of Charles Knight Finance.
MPA: What has been one of your biggest challenges in business to date and why?
GC: One of the biggest challenges would be in keeping up with the self-education and changes to legislation, plus making sure that whatever we do as a working model, we’re totally compliant.
One of the biggest concerns for me in the industry is the consequences of not actively encouraging our customers to look at the risk model of what they are doing - and that means making sure that if something was to happen to the customer, there would be a sufficient safety net to be able to remove all credit and to leave them financially secure. So these are the issues for me where I think people like brokers could be liable in the future. I can see litigation in the future where there will be a duty of care issue where brokers have not been sufficiently vigorous in recommending risk products like asset protection and income protection.
MPA: How did you overcome this challenge?
GC: How we tackle that is that we have got someone independently qualified in the office and we refer all our clients to him. And that’s a fair cost to ourselves but we feel that if we do that, if they feel that we’ve got sufficient advice from somebody else, we can ask them to sign a waiver to say that we’ve recommended assessment of their insurance exposure.
You need to make sure that whatever the policies the client has, they are going to be effective and they will stand up at the time, because it’s alright to make commissions on insurance. But at the end of the day when that claim is made you want to ensure that the clients are well protected and adequately compensated for whatever that event was. So that to me is the biggest smoking gun in the industry, I think.
MPA: What are some of the key lessons you learned from this experience?
GC: When somebody independent of that decision making process examines the process (and you see it all the time in politics where people make decisions and suddenly later there’s a royal commission) people can be made to look very silly. So I’ve always had a mind’s eye to think, well, number one, if this was ever to be assessed by somebody independent or an auditor, how would we look? It’s not about just covering your backside, it’s a duty of care issue.
MPA: How have those lessons benefited you in business since?
GC: I think if you can have that discussion with a client who might be a little uncomfortable, then you have got a clear conscience, number one. I think it’s good actual practice in business to be able to have those conversations as part of an interview and that does require some skill. It has to be done in such a way that you are taking the customer on board with you. And that’s part of the journey of discovery of what their needs are and looking at some of the things that might help you and some of those ‘what if?’ questions.
MPA: If you were to tackle this again would you do anything differently?
GC: I think I would. I was fortunate in one way, in that I came into mortgage broking as a mature person. I wish that I started earlier as a career choice. I wish that when I was younger that these career choices would be open to me.
MPA: What advice would you give to other brokers facing a similar situation?
GC: What we did was work with an aggregator that did not do sufficiently well in terms of communicating and supporting the actual broker members and so we transferred to another aggregator I felt was quite responsive to our needs and who had the capacity to educate and support in an effective way.
And of course, we’re with Outsource Financial and I find that even though it’s a smaller aggregator, at least there is support. There is mutual respect and it’s about that dialogue and about that opportunity for education and support which derives from that relationship. And that is particularly important, I think, to at least have sufficient strategic relationships surrounding you so that you cover off most of the areas.
Would you like to share your toughest test with MPA? Email [email protected].
