It seems the news just keeps getting worse for advisers as a profession, with the announcement recently that Westpac is to cut lose advice and wealth, and 900 jobs. It’s a shedding and a shift in our industry that has never been seen before (at least not in the last 25 years that I have been around) and each week seems to bring a new piece of news that changes the game again.
With vertical integration being dismantled and every piece of the value chain remodeled it seems the world of the financial adviser is changed forever - and it’s not hard to imagine that 50% will leave.
While banks have shown that the business model doesn't make financial sense, in many ways this decision contains many losses.
For 900 people to lose their jobs is a big consequence. For many years we made high quality education for dealer groups Securitor and Magnitude - under the visionary leadership of then head of licensee education Annick Donat (now Madison CEO). The subject matter experts Annick had us work with to develop leading edge video training were highly educated, very knowledgeable and top quality professionals.
While I certainly didn't know everyone, there were a lot of quality people there, like in many places in our industry, who were passionate about helping people and giving quality advice. It seems the baby is now thrown out with the bath water, with the financial case just not stacking up against the mounting costs of compliance and reputation risk.
My hope is that all the quality people, both advisers and those in specialisations around advice find a way to reinvent themselves in the new world order. To find a place to use their skill sets to continue to deliver high quality and much needed advice to Australians.
One place I believe could be a good next step for many advisers and related professionals is align and understand our largest super funds. They are ambitious, rapidly expanding, and do value financial advice. Our After Hours series, CEOs of Super proved unequivocally that super funds believe financial advice is not only valuable but necessary, and are building ways right now to expand that footprint.
The traditional chasm that has seen retail versus industry funds has now been ripped apart. There are clear roads ahead for not for profit super funds to dominate the relationship with Australians for advice and investment - beyond retirement, for life. As one of the founders of the Fund Executives Association (FEAL) over 20 years ago, I look with pride and amazement at how far these funds have come, and the high quality businesses they have developed into. And it’s no accident that they have developed these businesses, without the constant pressure to make a profit to shareholders.
The kind of short term scrutiny on profitability and performance that our listed companies go through is not conducive to building the best and most robust business in the interests of the member or customer. The business with 2 masters will often be conflicted when delivering.
But there is an every growing and expanding superannuation industry that is going to need more advisers, more communication experts and more technical team members to help them grow. I can only encourage those who are passionate about advice and want to help build the future to understand them more, and see if they can become part of that future landscape.
I do feel for people losing their jobs and the fear and uncertainty in our industry in general. While those outside and in the media may highlight the absolute worst, there are a lot of good people undergoing a lot of anxiety and worry about their own families’ future at this time. I find that focusing on where to next for the individual, rather than the whole big picture which is constantly evolving, is the best way forward.
Until next time,
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Just as important as the problems in our economy is the solution.