The Business Coach Model: Executive Summary

The Standard By Which Other Portfolio Construction Systems Are Judged

The Need For Efficient Solution Making Models lacking for Complex Investment Decisions

Bus-Tec Pty Ltd. has created a design reality decision-making model regarding strategic solutions for client investment portfolios. Hence, "THE BUSINESS COACH MODEL" (BCM) capitalises on the poor Platform Providers Administrative Research that lacks statistically rich in E-commerce application with centralised database by applying landscaping with multi-functional layers and customised research analysis landscaping for personalized investment portfolios. More importantly, the process currently represents a client's needs based planning essentially to the ASIC PS 146 investment strategies criteria. The Financial Planner has educated the client, the client has made the informed decision and the Dealer Group and Financial Planners have therefore both significantly lowered their business and personal risk responsibility.

The client is not putting their money in a black box that can't be explained. "THE BUSINESS COACH" Model helps Financial Planners to understand the logic behind investment Managers and Direct Share decisions and offers investors a range of funds that is tailored to their investment objectives for risk tolerance and their concern for more disclosure.

The important advantage of the BCM over traditional managers is that it acts as an excellent Risk Management Tool, which can deliver returns, with a much lower overall risk correlation to that of traditional shares and bonds. An investment option such as BCM can offer an independent value added stream from traditional asset class of fund managers or direct shares; therefore this makes it a powerful tool in a traditional investment model.

How BCM Takes On The Fund Of Funds Responsibility To Serve His Investor's Requirements

The Fund of funds investment vehicle continues to gain investor's dollar and adviser's support as each seeks easier ways to invest; however, the question is whether the funds are a suitable choice across the board.

No matter who the provider of the choice of funds is, whether it's the fund of fund manufacturer or the dealer group, if they were to engage the services of BCM as their asset consultant to manage this activity, the objective will be to identify the best of a breed of fund managers and to continue with them in such a way as to satisfy the stated investment objectives. BCM, as asset consultant, whether the task is outsourced or transplanted into Platform or Dealer Group, will be responsible for hiring and firing fund managers, blending investment styles, deciding asset classes exposure and relative weighting of fund managers.

Consistent with this has been the proliferation of specialist investment houses focusing purely on delivering investment performances and nothing else. Financial Planners are attracted to the funds of fund approach for the same reason it allows them to exploit their core competencies but the recent decline of the bull market and the fading capacity of some of these managers to deliver excess returns is putting the traditional selection process under pressure.

The life of the typical dealer principal is increasingly complex. Their responsibilities include the provision of professional advice compliance, due diligence, administration, business management and marketing. It is not surprising that some are now conceding to Business Coach Model's statistically link "black box" for their solutions for active selection, monitoring and re-weighting of asset classes of fund managers.

Does The Current Concept Of Internal Fund Of Funds Serve The Interest Of Investors

Financial Planners and investors have already adopted the popular Master Fund and Wrap Account concept (85% acceptance rating), realising the value of diversification over several different business sectors and migrating from one fund option to another but this all important shift in relation performance differentials between product options and asset classes is not quantified against the investors risk profile which remains the same.

Obviously the inherent problem with external fund of funds managers, ie. Core Satellite Approach is it doesn't suit all investors. Many of us know exactly who is managing our money and how. The flip side of fund of funds simplicity is that the investment objective process and performance of the underlying fund manager is far from explicit and this may lead to investor frustration.

Our approach may be to utilise part core satellite approach and to surround it with high performance specialists. This is where the user friendly Business Coach Model would be controlled by the Financial Planner, thus allows acceptable risk return outcomes within the clients acceptable risk profit.

Beating The Mind Trap

Overcoming your natural negative emotions of another seemingly complex piece of software will become the key to investment success. One thing is for sure, the Business Coach Model is such a powerful tool yet so user friendly, it makes the Financial Planner feel the power lies within them.

The first stage is where Financial Planners are looking for tips, like looking for a guru who will tell them what to do and are they seeking a solution to an investment problem. What they need to progress to the point where they realise that the questions they ask are trivial and that they are most likely to do well if they make their own decisions.

The second stage is where the neophyte Financial Planners come to realise the need to learn to make their own decisions or what they need to realise is that they are like Don Quixote tilting at the windmills because this search for the perfect method is still looking out side themselves for the solution. This is when they begin their research for the holy grail or the perfect system. Most of this research revolves around identifying the fund mangers that consistently outperform their sector specific peer group over a medium to long term of 3 to 5 years.

The third stage is where those Financial Planners who have stayed the course learn the holy grail lies within them. They appreciate that the investing results in what they do and some external system. In other words, they realise that their profits or losses are created by their actions and that they can change what they do to improve their performance.

So investing success depends on the way we make decisions. To make good decisions, we need a set of rules in the form of investing planning and the discipline to follow those rules. Our investment plan will have rules for when to buy, when to cut losses, when to take profits and how much money to commit to a single investment. How well disciplined we are in following these rules, depends upon our beliefs, emotions and skills in making decisions. This suggests that investing is really a mind game. Our investment results flow from how well we deal with many emotional biases, decision making biases, personality flaws, beliefs and attitudes that we all have to some extent.

Overcoming them is first a matter of coming to a realisation that they exist and that they apply to us. Most beginners do not even know that these problems exist. As they become aware of them, they also have to get to the point when they admit that these issues apply to then personally. Until they get beyond the denial stage, investment success will remain outside their grasp. There are many common ways in which we all sabotage our investment success through the way we think about investing and this is not due to low intelligence because the smartest investors are just as susceptible to them. Instead, they flow from the way we naturally experience emotions, tackle likes challenges, deal with information and make decisions. A good example of a psychological mind trap is called framing. The idea that we mentally put things into categories so that we can deal with the complex world we live in which can lead us into bad decisions blinded by the way we defend things.

The Ever changing Client Base Environment

History does not repeat itself. Business cycles, market trends and business opportunities, if missed 10 years ago, do not represent themselves for a second bite of the cherry.

The master fund phenomenon of the late 1980s and early 1990s was a watershed for the industry. It changed the way the industry functioned by invoking a major power shift from the fund managers that held the retail client base to the portfolio administrators.

Now the wheel is turning again - this time in favour of the Financial Solution Service Provider. Market consolidation will further hasten this shift and lead to even more rapid changes in the future. This is bad news for industry participants locked firmly in the past. In other words, if you are still using the business models that worked a decade ago, you cannot hope to compete in today's radically different environment.

Does this mean we will see a reduction in the number of market players? Not necessarily. Instead, the market will likely experience exactly the opposite effect. Just as the focus of the industry shifts towards advice and planning - and away from product and administration - dealer groups, stockbrokers and accountants will become branded providers of wealth management solutions to their customers.

A further effect of industry consolidation and the high capital barriers to entry that will impact on the wealth management area will be a decrease in the amount of platforms that are used to build and provide wealth management services. Platforms that survive the 'market-place make over' will be those that deliver the goods to the evolving 'new look' industry.

A Lego Planning Approach To Planning

Over the past 20 years, the role of financial advisors has changed from helping investors select a ready made financial solution to helping them construct that solution from basic building blocks. Two decades ago, most investors selected a single manager to control a balanced portfolio comprising all asset classes; equities, property, bonds and cash. Most institutions did everything from managing the money, to administrating the fund and providing advice and education through tied in-house advisors.

The past 15 years has seen massive changes to this model. Many institutions now focus on either financial advice and distribution or investment management, while naturally there are others that continue to do both. Investment managers are increasingly required to provide the building blocks rather than the entire solution. Financial advisors use these building blocks to build solutions for their clients in much the same way as LEGO allows people to construct various objects using a small number of basic pieces.

The trend towards specialisation and away from the single manager has been driven by a number of factors. The emergence of Financial Planners that are independent of the asset managers has been one reason. Another has been that as performance reporting became more public, 'manager risk' - the potential for underperformance by individual managers - became obvious.

Initially this caused investors to select two or three balanced managers, but later contributed towards the move to specialist managers. An inability to manage all asset classes, particularly by institutions for whom investment management was not their core business, caused them to outsource some asset classes (eg. International equities). Finally, dealer groups, advisors and consultants recognised that they could add value for their clients if they could select high performing mangers in each asset class and customise the asset mix to their clients' specific needs.

Where does this all end? The ability to use the basic building blocks of portfolio construction increases the flexibility of advisors and increases the possibility of tailoring the portfolio exactly to the needs of the investor. However, it also increases the responsibility of dealer groups, and in turn their advisors. They now become responsible for determining the strategic mix, exposure to active management, selection of managers and controlling implementation, rebalancing and tactical asset allocation. Now with BCM, many dealer groups can provide 'model' portfolios for their planners, constructing diversified portfolios using sector specialist managers.

Almost every building block in the over-all financial solution can be purchased separately; the trick is knowing when to use the basic component and when to access a ready-made solution.

For example, without balanced managers responsible for actively managing the mix of asset classes, positive returns can be eliminated and portfolios can be left to drift away from the desired mix according to the performance of each asset class, or be rebalanced periodically to the desired strategic mix. The alternative is for the dealer group or advisor to actively manage the mix of asset classes or hire a specialist tactical asset allocation (TAA) manager. Increased choice creates the possibility of a more successful outcome but also increases the risk of failure.

However, those who are now finding that their clients are shocked by recent market events, should not only be rethinking portfolio construction principles but whether low risk, profiling methodology has continued to do this.

BCM's Superior Gap Analysis Modelling System

BCM approaches this matching process of client's risk tolerance with the choice of appropriate stock selection by scenario testing for the client' expected marginal utility risk which provides the building block solutions necessary for appropriate efficient frontier model.

When markets are choppy and unpredictable, BCM has the ability to shine. The BCM's first aim is to preserve capital (ie. not to be subject to losses with the rest of the market) and only then do they deliver some profits to investors. This superior preservation of capital and returns is possible because the BCM can strategic budget its exposure to the following asset class risk.

• Top performing fund manager over asset class or sector.
• Style mix of fund managers measure overall co-efficient correlation of Risk Management.
• Comparison of chosen fund managers investment against traditional investor type benchmark.
• Multi scenario testing of asset allocation to refine the desired risk factor or benchmark.

With the advent of Modern Portfolio Theory in the 60's, came the notion of a broader macro review of investment portfolio to fund the right mix of investments, concluding that asset allocation represents over 90% as to the degree of portfolio volatility; hence the importance of asset mix cannot be overlooked. The size of your allocation will generally be determined by your objective in making an investment, increase your portfolio returns; reduce your portfolio volatility or a combination of both.

The Financial Planner needs to determine what risk/reward position they are seeking for their client. If the client were risk averse, it would be appropriate to adjust the overall risk of the portfolio according to empirical guidelines benchmark of typical moderately conservative type investor with drop down income performance. However, if the investor is a reward chaser with an equity-like volatility with no regard to associated risks, then little or no tactical asset allocation for risk but still probably appropriate for some sector diversification amongst high return products.

I suggest that for the non-institutional investor of funds, the fund of funds manager approach generally makes sense. A portfolio of multiple managers utilising multiple strategies can be very difficult to achieve the desired client's outcome without BCM's powerful tool that monitor and benchmark and as long as you have done your homework and fully understand the fund manager's selection process as outlined in this Paper, you should be able to sleep well at night in the confidence that the manager is monitoring your investments. The fund of funds manager becomes an expert in both selecting and monitoring individual fund managers and it is their job to both hire and fire managers where appropriate.

This manual monitoring process on 1000+ Fund Managers and ASX 2000+ Direct Shares, without the BCM software takes a certain level of skill and a significant amount of time. The BCM is designed to provide the Financial Planner with a daily, weekly or monthly investment performance report which breaks up the funds in Growth and Income performance over periodical time spans on each strategy employed and any particular change to the portfolio.

Does The Industry Appear To Be Doing Their Job In Delivering Value To Their Clients

Financial Planners who don't know what their administrative platform can deliver are ill equipped to choose the right desktop platform for their business. Desk top functionality starts when back office ends and there is a range of services many Master Trusts and Wraps don't deliver like a scenario testing or risk management for a client's investment portfolio. Your desktop system should be able to defend you against the loss of business to another licensed financial service adviser. Your desktop system should provide adequate support facilities such as modelling and objective based planning. Therefore, Financial Planners are regarded as high-value resources so anything that can be done to take administrative tasks away from them to give them more client-facing time to make them more productive, the better scope for client's profit.

Financial Planners do not know everything, but they should know the basis about the Australian investment markets and the tax system. However, their broad-spectrum knowledge doesn't ensure that they can answer questions about diversification of the Yen or the latest tax ruling on thoroughbred foals. A Financial Planner is going to be an honest professional and tell you I don't know. Be realistic, the Financial Planner is there to help you make decisions and if you are interested in specific subjects, you are going to have to do a lot of work for yourself. The best way to use a Financial Planner is as a second opinion on you financial plans. Institutional Dealers and Independent Dealers don't see making profit as their reason for existence. In some cases, all the money is ploughed back into making advisers better able to operate. Typically, Financial Planners have more client-facing time and can generate more revenue and therefore more profit for the dealer group.

Financial Planners Looking For A Lifestyle

There are many demands placed on Financial Planners, enormous workloads, working 80-hour weeks. The future today is in practice management, looking at design and implementation of system processes, extricably linked to be a value chain to support Financial Planners.

Platforms that operate on this basis, those that innovate rather than replicate, and those that invest heavily and successfully in technology, have a better chance of success than the rest. The smaller master fund or wrap account operators will seek out these providers and out-source their platform development and operation to them. This saves them the massive cost of the required technology development in this competitive market, while allowing them to focus on their core competencies.

It is against this background that the number of platforms will consolidate while product operators proliferate. But these operators will be running their products and services from fewer and more sophisticated platforms. The way forward for wealth management services lies with the advice givers and their organisations. They will own the product, own the asset and they already own the client relationship. Wealth management providers that are unable to adapt their business to this paradigm will lose the battle and those that are busy replicating current or past business models have already lost the war.

The Noble Planner

Financial Planning will become the most important profession in the 21st century because it's dealing with money and money is at the heart of everything.

Money is embedded in everything we do. It's a powerful, perverse and unilateral force on the planet. Its what helps us understand what is important and what is critical about money. People even today are being called to financial planning, the way doctors, lawyers and theologists are called to their profession - it is a real strong sense of calling.

As a profession, its calling requires a specialised knowledge, minimal education curriculum, enshrined in the legislation by the Financial Services Reform Act (FSRA). PS146 is strong evidence that the public watchdog authority (ASIC) has set minimum standards requiring specialised knowledge, often long and intensive academic preparation.

It's not only a changing business landscape as Financial Planners, who have to be a business person as well as a financial planner and have to support their own infrastructure, are looking to a Platform Provider or Dealer Group to provide the efficiencies on a larger scale that helps them run their own practice.

This is pushing Financial Planners to position their business for future success to a niche market that they differentiate between holistic or wealth management.

Risk Associated With Accumulated Retirement Plans

Until two decades ago, most Australians with Superannuation were covered under defined benefit plans. Since then, the move to accumulation plans in Australia has been massive representing currently approximately 90 per cent. Although accumulation plans provided access to diversification providing risk sharing across classes and individual securities for any one investor and pooling funds providing economies of scale, thereby reducing the cost of individual investors and providing access to a wider range of investment possibilities - the accumulation plans retirement benefits are uncertain, being dependant on the level of contribution and financial returns earned by the scheme the member invested into.

The risk of poor investments performer is carried by each member. With people changing jobs more frequently, a reduction in the life of corporations, greater participation in Superannuation and the demand for portability accumulation plans have many advantages. Accumulated fund members with market-linked returns will receive benefits determined by investment returns over their specific investment horizons.

Members of Accumulation funds should consider the following management practices of risk sharing across generations:

• You should reduce the risk of your investment mix so your investment horizon gets shorter and your investment horizon should be measured relative to your life expectancy, not your date of retirement.
• You can carry greater risk of investment underperformance while you are working if you defer your age of retirement and/or increase the level of saving.
• The risk of investment underperformance can be reduced through choosing a less risky mix of investments; however, this will reduce the expected return and increase the risk of not having sufficient funds in retirement.
• Risk of investment underperformance after retirement can only be compensated for through spending less.

There is a rational reason why accumulated fund members together with their Financial Planner must pay even greater attention to risk management than the traditional defined benefits plans. Members bear all the risk of investment underperformance but nobody really wants to relay in the intergeneration risk sharing offered by the Age Pension which provides the basic benefits level (25 per cent of average weekly earnings) for those whose personal savings are inadequate for a variety of reasons, including investment underperformance. If the overseas trend is any guide, deregulation of industry Superannuation funds represents a huge opportunity for Financial Planners with special Risk Management software, like the BCM.

D.I.Y. Investor Very Much An Amateur Player

The democratisation of investment is a powerful factor in Australia but it can present dangers in turbulent times like the present. Given people's ability to buy shares in privatisation or to select their own mix of managed investments or to make the investment choice in their own Superannuation fund has been the fashion referred to in approving terms such as empowerment and freedom of choice.

No one queries this when the stock market is rising and even investment novices can appear to be geniuses but when times have been tough, who wants to grapple with investment discussions. What the advocates of Do It Yourself investments don't tell the participants is that over time, such amateurs make less on the upturns and lose more on the downturns than the professionals. This is part of the reality of the zero sum game in investment markets.

In recent down markets, some amateur investors will have been scared into selling out of shares, which have fallen, or managed funds which have under performed. Thus amateur investors may have bought on the way up and sold at the bottom.

Several studies of managed investments have found that the average investor under performs the theoretical performance of a fund up to 50%. This is critical when it involves Superannuation savings.

Financial Planners Made To Use Portfolio Risk Modelling Software As A Compulsory Requirement

How to assess the investment needs of clients - knowing the client before settling on the right investment portfolio for them is of course a statutory requirement for Financial Planners for pre-planning risk profiling.

Assessing the client risk thoroughly is one way for Financial Planners to safeguard themselves against future claims by a client. Clients are taking a more aggressive approach than they did a few years ago and are looking for someone to blame when their investments don't perform as well as expected. The real risk for Financial Planners is that they are responsible for explaining the risks a client may come across even though there is no way they can explain them all.

Even if you have made every effort to explain the risk, there are smart lawyers out there who will say the client didn't really understand it. To overcome this problem of assessing risk tolerance, firstly a client must acknowledge and sign a document at particular stages in the planning process such as acceptance of the proposal and receipt of the privacy statements and document acknowledging potential risks. Unfortunately, we are forced to lumber the client with reams of paper. Bureaucrats have no idea of what it costs to be compliant and getting the client to sign documents at every stage makes them suspicious and gets in the way of the client relationship.

The client is also shown the mix between the asset sectors in their portfolio and the way in which this mix can be used to maintain balance in the portfolio through an investment cycle. While most financial planning companies appear to have some sort of risk management strategy in place, a recent survey showed that while there is a superficial agreement to knowing your client, many planners are confused about definition of risk profiling. Some Financial Planners saw risk profiling as an investment management lead to an asset allocation strategy. Others saw risk tolerance as distinct from client investment goals.

Whilst the Financial Planning Association (FPA) has developed some standard definitions, there is some work to be done in developing benchmarks if the financial planning industry is to keep its insurance premiums down, avoid law suits and more importantly, maintain the trust of clients.

In general, when we look at the clients -

• It's not a question of emotions and subjectivity
• Quality income streamline needs
• Assess their risk tolerance to a set of investor style risk types
• Quantitative analysis tools so people don't get big surprises in their portfolio.
• Do they feel comfortable with negative returns?
• How do they feel with a range of returns between 1-19% pa., 2-12% pa., 4-8 % pa.

Legally, Will Risk Profiling Protect You?

Risk profiling is a necessary component in liability management. Does this mean that profile investors will never complain about their portfolio volatility because they are tailored to their personality, according to a risk-profiling tool but how accurate is this risk-profiling tool. The interesting question is will the planner (or his insurer) pursue a claim against a promoter of a risk adverse tool ensuring that all recommendations would be appropriate to a client's personality are legally defensible.

However, one of the dangers of risk profiling is that it can lead one to think if a client can cope with risk, should they be given it. The planner's problem in defending a claim is that it must be acknowledged that the advice has not been based solely on the client's financial position and the advisors view on the markets but also on the client's purported risk profile. If might not be a comfortable position for a financial planner to explain that he chose to invest heavily in the stock market on behalf of a client not because he necessarily thought that it was an exceptionally good time to enter it, but because he believed that all people of a certain type should always invest heavily in the stock market, irrespective of the market conditions.

My belief is that if the volatility inherent in that advice could be too challenging, then it needs to be explained to the client, including the extent to which the advice has been composed to accommodate that. On the other hand, if the advice that is considered most appropriate to the client's circumstances involves relative low volatility, then it should be given even if the investor is a real adrenaline junkie.

The BCM Software Recognises The Intent Of The Financial Services Reform Act (F.S.R.), Promoting Risk Management Systems, Product Understanding And Disclosure Principles And Outcomes

As a general rule, Financial Planners don't undertake a rigorous enough risk analysis of a client's portfolio after first determining what risk means to the client and the definition of risk from an investor's point of view, is quite different to that of a fund manager. I think what investors really mean in terms of risk, is the risk probability of losing their money against the risk probability of expected return.

Risk, Return and Time are the three key factors at the heart of every successful investment strategy. Although their importance is easily recognised, it is often a difficult task to illustrate the interaction of these variables with each asset class.

It helps to make a realistic assessment of the clients time horizon and if their appetite for risk is probably quite high, you can put up with fluctuations in investment returns on the basis that growth assets like Australian and International Shares and special hedge funds will provide the highest return. If, on the other hand, you have a short time horizon, say one year, then you have a low appetite for risk and will probably wish to be in more defensive assets.

As investors, we can choose to invest our savings among a multitude of different asset classes with the underlying desire to generate a return. Ideally, this return will exceed inflation and maintain/grow the purchasing power of our savings. The form of this return, whether it is income capital gain or distribution of income in the form of dividend income, interest or rent or a combination, depends on individual objectives or circumstances.

One of the main influences on the expected value of your return is the risk you are willing to take. To this extent, it is therefore important to understand the relationship between the risk and return. In general the higher the expected return, the higher the associated risk. If you are risk averse, you are more likely to invest in low risk/return assets such as cash or government securities, while if you are more comfortable with risk, you may choose to invest in assets such as shares, which typically have a higher risk/return profile.

Historical evidence suggests that higher risk assets have outperformed their lower-risk counterparts over the longer term (minimum 5 years) though over the short term, significant volatility in capital value can be experienced. It is therefore recommended that higher risk investments are generally suited to investors with long-term investment horizons.

The Old Law on Risk When Formulating Appropriate Investment Strategies

PS 122 and S851 of Corporations Law - Financial Planners have implied general standard of care obligations when making full needs analysis.

Rule III - F.P.A. Rules of Professional Conduct - Financial Planners shall provide an explanation of the nature of investment risks in terms clients are likely to understand.

Financial Planners role is not to avoid risk altogether but help clients embrace and manage reasonable investment risk to achieve desired investment goals over realistic time frame.

Studies have shown there is no single dominant methodology used in the financial planning process to assess a clients risk tolerance other than the industry uses several ways of qualifying risk tolerance.

• Clear description rather than quantification of potential risk
• Education process
• Diagnostic questionnaire
• Comparing and contrasting appropriate one in five risk asset allocation
• Tolerance testing questionnaire are specific which allows gap analysis, ie. The clients current position, financial goals and how the goals can be met, given their time frame and risk tolerance.
• Pick a point on a line indicative of their risk tolerance
• Lifestyle questionnaire; care should be taken - each investor has some unique needs and attitudes

Under The New ASIC PS 146 Compliance Regime

The Federal Government ministers have taken the view that people ought to be capable of buying the right Superannuation product but that doesn't guarantee anything, just like they shop for a house or a car. Superannuation funds and other investment products are not something most people regard as a need that they want to budget for such as a house for shelter or a car for transport. Therefore, to overcome this apparent lack of interest to desire Superannuation as a compulsory product for retirement, the Government came up with the ingenious and cost effective plan known as PS146 Compliance Solution that would abridge this information gap.

In other words, there is a mismatch of knowledge when a financial product is being sold to the general population; such as the seller knows all the information and the buyer knows a lot less. For example, in "Accumulated-Type Super Funds" as compared to the "Defined Benefits Superannuation Scheme" the investment risk is carried by the fund members, therefore no one can forecast precisely what they will receive in the end or how long the product will support income in retirement.

So how can the public be sure that when they consult a Financial Planner they are going to receive independent impartial financial advice; easily by the extension of the new ASIC PS 146 compliance regime for Financial Planners, this could become part of Canberra's argument that it doesn't need to spend money educating Australians on this matter.

PS 146 Knowledge and Skill Requirements

Generic Knowledge

PS	Topic	Demonstrated Competency Requirement
146.119	The economic environment	Broad understanding of economic environment and impact on markets, including economic and business cycles, interest and exchange rates, inflation and government/fiscal policy,
146.120	Operation of financial markets	Broad understanding of financial markets, including roles played by issuers and intermediaries, structure of markets and inter-relationship of industry sectors.
146.121	Financial products	Broad understanding of financial products, including product concept and risk factors, investment classes and sub-classes, types of product; and correlation, similarities and differences between products.
146.122	Taxation	Broad understanding of the taxation issues relevant to products and markets subject to advice.
146.123	Disclosure and compliance	Broad awareness of disclosure and compliance obligations, including legal principles, ethical and regulatory requirements; complaints resolution; industry codes of conduct and practice and regulators' guidelines.
146.124	Integrity	Broad understanding of ethical advising in relation to the relationship with the client, disclosure and conflict of interest.

Specialist Knowledge

PS	Topic	Application of Knowledge Requirment
146.126	Financial Planning	Apply knowledge of investment theory, portfolio management and investment risk; advisory functions; taxation and estate planning.
146.127	Securities and futures markets	Apply knowledge of equities, derivatives and futures; operations of securities and futures markets; types of products; client risk profiles and investment strategies, taxation and disclosure/compliance.
146.128	Managed Investments	Apply knowledge of underlying product knowledge; concepts of collective rights; taxation implications and regulatory/legal obligations.
146.129	Superannuation	Apply knowledge of the operation and management of Superannuation markets, taxation implications and disclosure/compliance.
146.130	Insurance	Generic - apply knowledge of operation of insurance markets; insurance products; taxation; advisory functions and disclosure/compliance.

Skills

PS	Topic	Application of Skill Requirment
146.131	Skill Requirements	Apply skills applicable to establishing client relationships; identifying and analysing client objectives, needs and financial situation; developing, presenting and implementing appropriate strategies and solutions; maintaining records; ongoing service and compliant resolution.

Integrity

PS	Topic	Demonstration of
146.132	Integrity requirements	Observance of ethical behaviour in relation to disclosure and compliance; compliance with professional obligations in professional/industry guidelines or Codes of Conduct.

Finally, The Business Coach Model Adopted As An Entire Package For Desktop Interface

The BCM finely tuned Investment Portfolio Construction process endeavours to introduce a thorough, easy to understand and user-friendly information of technology that would produce concrete measures to bolster research and discipline framework of in-depth benchmark filters to improve technological education for the client and kick start a new industry development for reducing fee structure for the clients at a time when the Financial Planning industry needs to be more professional and the investment sectors have been hit by a global downturn.

The advantage of BCM is you don't have irate customers or problems associated with the market because the system places great significance on educating the client so that you don't have difficulty down the track.

However, at least the Financial Planner will be able to justify his fees by having at his disposal the utilisation of the due diligence analysis according to our quadratic (4) filter disciplined process for risk/performance, results in an upward/downward pressure on fund managers or shares which generates tactical asset allocation for long/medium and short term decision.

Because the client perceives that the planner does not have a systematic, transparent value-added disciplinary portfolio valuation mechanism in place, they see this as a failure and therefore the level of fees as a failure.

Research is invaluable as the Dealer Group's responsibility is for advice given to investors and the commercial well being of all authorised representatives.

Our statistical landscape Portfolio Construction Interface System offers access to an exclusive or customised list of wholesale Managed Funds and ASX Listed Securities, (1000+ and 2000+ respectively), Sector Specific (41 and 27 respectively) with multi fundamental filter disciplines (80 and 47 respectively) and together with one of the most comprehensive array of Practice Management and Strategic Calculators that provide a much needed comfort zone to the ever-increasing complexities associated with investment consultancy and holistic financial planning practices.

The performance and feed back from clients and select Financial Planners has been really good. In fact, our system outperformed its peer group has become something of a habit.

BCM can be installed as a bolt-on or web-based client centric business process and automation system within the practice as well as providing the intranet and Directors console for visibility over the delivery of services to the client.

The system also works with a third party client investment platform to allow total control to the Financial Planner. Additionally deploying the workflow automation has allowed BCM to gain huge efficiencies, an example being the reduction of the time taken to complete the construction of a client' portfolio from analysing a client risk tolerance to gap analysis of appropriate asset mix stock selection, together with an income statement and market watch schedule requirement print out.

Savings like these cannot be gained by mere quality control systems tied to one application.