The proportion of people who say they trust financial planning as an industry has almost halved since January, as the Hayne royal commission has continued its public dissection of the financial services industry.
Research by CoreData before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry public hearings started put the level of trust in financial planning at 60 per cent. In April, after the inquiry completed hearings into consumer lending and as it embarked on its hearings into financial advice, trust in financial planning held steady, at 59 per cent.
But by July, the public had witnessed the resignation of the AMP chief executive, several board members and chair; the literal collapse of Dover Financial Advisers’ Terry McMaster; and the figurative collapse of the licensee; and the merger of Sam Henderson’s financial planning business. Trust in the industry collapsed to 35 per cent.
Trust is measured by asking people how much they trust an industry on a scale from zero to 10, where zero means complete distrust and 10 means complete trust. A score of 6 or higher denotes trust in an industry.
Running a financial planning business has rarely been as challenging or uncertain but there are things that good businesses do – and will do in the future – to make sure they grow and flourish.
CoreData is undertaking new research to identify characteristics of the financial planning businesses that are best positioned to prosper in the transforming financial planning world. It will examine practice structure and size and explore some of the factors expected to underpin growth and profitability.
And as the royal commission prepares to release preliminary recommendations on the nexus between product manufacturers, platforms and advisers, the research will also examine how these relationships are evolving, and how advisers and fund managers will interact to the ultimate benefit of clients.
When attendees at the Professional Planner Best Practice Forum in Sydney and Melbourne last week were asked to nominate a word to sum up the current state of the industry, adjectives such as “unsettled”, “uncertain”, “conflicted” and “over-regulated” were prominent.
But there was also considerable optimism about the outlook for the industry and for financial planning businesses, once the transition to new education and professional standards has been negotiated, and recommendations of the royal commission are made concrete. It was also clear that not all financial planning businesses are equally placed to capitalise on the changes.
PP readers are invited to participate in this research by completing the online survey. When the work is complete and the responses analysed, CoreData and PP will start to feed the results to readers in a series of articles outlining what the best businesses are doing and what others may learn from them. It will provide important and timely pointers during what is a particularly challenging period for advisers and their businesses.
To take part in the CoreData survey, and to be in the running to win one of four $1000 Flight Centre gift cards, please click here.