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Posted 1st November 2016

Insuring Longevity Risk

Founded in 1978 by David Orford, Financial Synergy began life as an actuarial firm in Albert Rd, South Melbourne.

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Insuring Longevity Risk

Founded in 1978 by David Orford, Financial Synergy began life as an actuarial firm in Albert Rd, South Melbourne. Recognising the opportunity to help shape the superannuation industry, Financial Synergy began developing software inhouse. Business flourished, and clients now include some of Australia’s leading superannuation funds and providers.

Continued growth and innovation has seen Financial Synergy grow to over 120 staff spread across four offices, setting new technological benchmarks with their market leading superannuation platform. Over 35 years later, Financial Synergy remains proudly Australian owned and operated. In a compelling interview with the founder David Orford, he helping their members to become more financially secure – so they actually have a risk free, relaxed retirement free from worry.”

What products and services does your firm provide? Financial Synergy delivers a fully integrated registry and online solution, helping our clients to drive efficiency and deliver a superior service. An ever-changing work environment has led to a re-imagined back office and straight through online solutions, with our company Financial Synergy widely recognised for ongoing technological innovation and the proven ability to deliver.

Can you tell us about what your company specialises in? Financial Synergy offers a leading edge pension administration software products and member engagement tools to the world, as well as leading edge administration. With our products – the work is all carried out by the initiator of the work – so there is no multiple handling or mistakes that occur at later stages in the process. This reduces cost and risk and helps increase the engagement of stakeholders.

How would you define the nature of your client base? Financial Synergy covers many of the larger pension funds in Australia, and the most innovative platforms as far as financial advisers are concerned. We have a totally online bank with whom we have developed and administer a totally online pension fund – which is relatively low cost and low risk – and is marketed to early adopters and those people who need as much control over the insurance and investment of their pension fund investments as possible. It continues to win many industry awards, including the most rapidly growing pension fund in Australia.

To what extent do you think that corporate success often depends on the innovation and creativity of those in leadership? Financial Synergy has finished roughly 15th in BRW’s list of most-innovative companies in Australia over two consecutive years. The ranking is determined by what our staff say about the culture of our company. New ideas are encouraged and good ideas acted upon – irrespective of their position in the company. Clients and staff are attracted to our company because of the interesting nature of the work we do. We do not advertise in industry magazines as most of our new business comes from word of mouth from existing highly satisfied customers. Similarly, people are interested in joining us, but we have high standards.

Why is strong and decisive management key to ensuring ongoing success? Financial Synergy’s managers are technically competent in what they do – so have the respect of their staff – who enthusiastically participate in problem solving exercises. Leadership is about extracting the best ideas from the people you work with and implementing them efficiently and effectively.

How do you approach leadership – exactly how have you been an effective leader in your industry? Many of my ideas have been translated into pension legislation, for example allowing people to contribute after age 65 years. The latest idea translated into legislation results in removing the costly and underappreciated guarantees from annuity products, so that the annuity income provided is roughly 25% higher than the traditional annuity. Potential new clients of Financial Synergy are attracted to us as we are the only company with the annuity administration software required to efficiently and effectively administer this new annuity product.
Can you tell us how the business is going and the challenges you face at the helm of it?

Financial Synergy grew at more than 30% last year in revenues and even more in profit. We have launched several major new initiatives in data analytics, managed services and member engagement. The major issue facing us is finding sufficiently talented people who fit in with our culture in order to do the work.

What was your career background prior to attaining your current position? I qualified as an actuary in under three years and obtained a Special Distinction in my MBA. I am also a qualified financial planner – so I understand what the ultimate customer needs – as well as the financial planner that advises them. As an example of where my education and experience has led, our robo-advice product now makes financial planning information and tools available to the person in the street, for almost all of their financial needs.
I have been involved in significant changes in the life insurance industry, mainly due to new product design. I have been leading my company for decades, so that is second nature to me now. The company runs exceedingly well so I still get to do some product innovation.

What vital contribution do staff play in the success of your firm? Shareholder value is derived from Financial Synergy’s staff. We continue to regularly receive unsolicited notes of thanks from our clients in respect of staff that have performed well about their duties, for example by working all weekend with clients to get them up and running. We do not ask our staff to do these things – they just do them. Each one is worth their weight in gold.

What are the ambitions of your firm for the future? I would like each of Financial Synergy’s recently launched new products to be successful. Not only will this increase our revenues and profit, but it will help ordinary people by reducing the cost of providing their pensions, reduce risk and help them plan manage and enhance their financial security (the latter of which is the core purpose of our company). As a CEO, managing the growth and handling international expansion brought about by our business partners is a definite challenge for me.

Do you have any further remarks to make? All around the world people have not saved adequately for their retirements. They cannot rely on governments which are inappropriately dealing with ageing populations, but need to become self-sufficient. ‘Adequacy’ is the major issue. The second major issue is that people do not insure their longevity risk and they are living longer. By not insuring longevity risk, they fall back on the government, which finances their benefits from tax revenue which is what other people pay. Financial Synergy will continue to play its part in reducing cost and risk in the system, and helping pension plans and other entities engage with their members to help them become more financially secure, so they can have a risk free and relaxed retirement free from worry. Everyone deserves that.

Company: Financial Synergy
Name: David Orford
Email: David.Orford@ financialsynergy.com.au
Web Address: www.financialsynergy.com.au
Phone: +61 407 206 457

Categories: Finance

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