A big bang can signal the start of something, as in the theory of where the universe began, or the complete destruction of something. At this moment in time, it’s difficult to say if the big bang likely to result from various government reviews and inquiries will be constructive or destructive for the financial planning industry.
The question posed in the cover story of this edition is: Are we witnessing the end of the beginning of financial planning, or the beginning of the end? Will the reviews signal an end to some of the outdated practices and mindsets with which the industry grew up, or will it kill off the industry as the provider of an extremely important and valuable service? The writer of the cover story, Gary Fishlock, has an interesting perspective on the financial planning industry. Even though he is not involved in it day-to-day, and even though he does not usually write about
financial planning, Gary nevertheless was well aware that the industry was undergoing upheaval “something fairly fundamental”, as he puts it. I thought it was valuable to Professional Planner readers that Gary wrote this story.
His is a fresh voice and a fresh perspective. Working in the industry day in and day out, it’s easy to lose perspective; you can forget that issues within the industry do sometimes find their way into the outside world. These issues then help shape the public’s opinion about you, your business and your industry. Gary approached this story with the perspective of someone who
knew relatively little about the industry. “I found the issue of the outlawing of commission-based remuneration for financial planners an interesting one,” he says. “This is primarily because it’s about people grappling with fundamental change, and what it means for them. “It’s the age-old question: how do different people cope with change? “I was interested in discovering whether or not there are people out there in the industry who are pleased about the changes, because it closes an avenue for conflicts of interest, laziness, greed and deceit that has until now been allowed to flourish unchecked.
“I’m glad to have discovered that these people with integrity and a strong work ethic do exist in the industry, and that the greedy, tardy element is probably poised for Darwinian extinction. “My previous view of the industry as being mainly self-serving, lazy and greedy can now be re-thought.” If the industry is facing a big bang, it’s to be hoped it is a creative influence, not a destructive one. Gary’s article suggests that change may be a powerful positive force on the industry and on public opinion.
The US baseball legend Lawrence “Yogi” Berra is reported to have once said: “When you come to a fork in the road, take it.” It’s fair to say the financial planning industry finds itself at a fork in the road. With a number of inquiries and reviews currently taking place, a coherent picture is yet to emerge of how regulators and other stakeholders wish to reshape the industry. I’m not sure they even know yet. The 400-odd submissions to Bernie Ripoll’s inquiry into financial products and services, for example, seem to agree on only one thing: Change is required. But there seem to be as many views on what change is required as there are submissions (although I admit to not having read all of them).
It’s the job of Ripoll, and of Jeremy Cooper heading a review of the superannuation industry to find a common thread though all the different ideas, vested interests and opinions, and produce a coherent set of rules and principles that will inform the development of financial planning in the decades ahead. We need a crystal-clear vision a road map, if you like. It’s absolutely critical for everyone already working in the industry and trying to build or run a business. It’s just as important if the industry is to attract fresh, energetic and innovative newcomers to its ranks. Uncertainty is a killer, for any business and any industry. As Berraals observed:“You’ve got to be very careful if you don’t know where you’re going, because you might not get there.”
Andrea Slattery, the chief executive officer of the Self-Managed Superannuation Funds Professionals’ Association of Australia (SPAA) this month joins Professional Planner as a regular columnist. We’re delighted to have Andrea on board. The members of SPAA provide advice and services to the country’s 400,000-plus self-managed super funds, and influence how almost $350 billion of assets are invested. Andrea joins the chief executive officer of the Financial Planning Association of Australia, Jo-Anne Bloch, and the chair of Industry Funds Management, Garry Weaven, as regular contributors of opinion to these pages. Their opinions – whether you agree with them or not – should be required reading. Each influences the debate on critical issues to do with how your industry is structured, and how individual practitioners operate. We hope that their columns in Professional Planner give readers an insight into the thinking behind the positions their respective organisations take in public.