Mark Hanson – Minneapolis versus Melbourne
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US born and bred Mark Hanson can thank his Australian wife for his experience straddling the US and Australian financial planner scenes.
Mark worked as a financial planner in Minneapolis from 1991 to 2002 when his wife Sandra convinced him to settle in Melbourne. Mark is fascinated by the similarities and the differences between working in the US and in his adopted hometown, where he is a financial planner for South Yarra Financial Services.
The biggest similarity is that the modus operandi for financial planners is the same in the two countries — help people quantify their goals, enhance their financial efficiency and keep them informed of fresh thinking, strategies and products.
The clients have much in common too. People in the US and Australia retire at roughly the same ages, have a mentality of saving for their post-working lives and have similar goals in retirement (golf, travel and gardening).
Differences between the two countries include how clients in the US are barraged in the media with offers from other planners especially those from traditional stock brokers and life companies, which are expanding beyond single-service offerings to offer comprehensive planning services.
This fierce competition means that planners in the US are under more pressure to invest in the latest portfolio-design tools. “When a client in the US rings up and says they read about a new tool in the Wall Street Journal, you need to be able to say you have it” says Mark.
While many clients in the US may appear more sophisticated because they hold their own subscriptions to desktop asset-allocation modelling tools, Australians are better at staying invested during times of volatility, Mark says.
That’s because the majority of Australians who invest in managed funds have an adviser relationship, whereas in the US only a minority do. In the US, managed funds are more marketed direct to the consumer, so investors have more of a trading mentality with managed funds.
“In the US you can buy managed funds from a kiosk if you want,” Mark says. “In falling markets earlier this decade, the redemption rates have been close to spectacular.”
Another difference between the two countries is that planners here have more ability to assist clients manage their super. South Yarra’s clients have elected to manage their super since choice was implemented in 2005. It’s more common in the US for a client’s work-related retirement assets to be part of a large company (401(k) or 403(b)) plan.
A final difference between the two markets is that in Australia investment providers are better at reaching advisers, through regular communications, presentations at professional development days or simply through visits by sales staff. “In the US, this level of contact is nearly extinct,” says Mark.
It’s certainly a difference that Mark has enjoyed since working in Melbourne.
