To improve innovation the industry needs looser regulatory settings in all areas bar one – the barrier to entry – according to AZ NGA chief Paul Barrett.
Speaking at the Professional Planner Licensee Summit earlier this week, Barrett said for the industry to attract more capital to innovate, barriers to entry must remain high while other regulatory settings are eased.
“Accountants, lawyers and doctors have to climb a mountain to become a practicing member of their firm. On the other side of that mountain they have a good life. In financial planning we have to jump over a speed hump and then we have a hard life.”
Barrett said adding barriers at the early stages of a career in advice will put the vocation in line with other professions.
“Young people that want to have a career right now that have ambition and want to do something special with their lives are not picking financial planning. If you want more people in then put the barriers up. Unusual, but true.”
Adapt and survive
The industry wasn’t broken and had innovated in many areas, Barrett said, with the exception being regulation.
“We just keep beating ourselves up. The conversation [during day one of the conference] blew my mind – if you were a Martian and you came into the room yesterday and listened to the conversation you would walk away thinking the industry is broken. We’ve done some wonderful things, but you wouldn’t know that from walking away yesterday.”
BT Financial Group head of platforms distribution Chris Mather said innovation has traditionally been viewed as a revolution but now the perception is on the ability to adapt.
“Adaptability is going to be the way to innovate. That’s going to be about not what you are doing, but what you stopped doing. So really focusing on target client cohort and adaptability through systems that exist.”