Watching and listening to the webcasts of the Royal Commission over recent weeks, I found myself becoming quite stressed at what was unfolding. The very fabric of the industry that I have been devoted to for the past 30 years was being ripped apart! It was like watching a scene from the 1987 movie Wall Street where the catch-phrase was “Greed is Good”.
The examples of misconduct that have been uncovered have made it clear that this is the Royal Commission that we had to have. It has been difficult to watch it unfolding in front of us. After all, if I feel like this, what must the consumer out there be feeling? What message must we be sending to those who have not sought advice and may need it in the future!
Who do they trust?
The issues facing consumers before the Royal Commission will be the same issues they are facing after it.
Consumers still need someone who can facilitate and navigate the trade-offs between their current lifestyle and the wealth they need to accumulate for the future. They also need help to prepare for retirement – having someone to have the hard conversations suggesting that they need to work longer and pay off their debt before they can retire.
Consumers need a coach who can work with them to reduce debt and reign in their expenditure; navigate them through the complexities of different investment products and how they differ from one provider to the other. They need someone who can tell them what is right for them and the strategies that meet their financial and lifestyle goals, preventing them from making financial mistakes. A guide to hold their hands through financial complexities and most importantly through life issues with children, health and the death of a loved one.
This is what good advisers do, they act in the best interests of their clients. I know there are many financial advisers out there that are possibly feeling the same as I have over the past two weeks.
Without a doubt, the relationship between an adviser and their client is one of trust; this is at the heart of what we have seen throughout the Royal Commission.
Trust is not something you can regulate or legislate. It is earned and not bestowed.
We have seen many changes in regulation over the past number of years, some of these changes we are yet to see the full effect of. Our target is to be identified and recognised as a profession but there is still much work to be done until we reach that point.
The advice community has the same responsibility today as it did prior to the Royal Commission. Now more than ever we need to educate consumers about the value of advice. We need to build trust and demonstrate the benefits of engaging with the right adviser by showcasing the great outcomes that clients have achieved.
As uncomfortable as it has been, the Royal Commission was something we needed for increased consumer protection. We are all responsible for the raising of standards in our industry to ensure that Australians get the trusted advice that they deserve; now is the time for us all to step up to ensure the future of our industry, and earn the right to be recognised as a Profession.
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