My Two Cents On The Banking Royal Commission- What This Industry Really Needs

I remember when I first joined the financial services industry at the ripe age of 19 when I applied for a telemarketing role with a business called ‘The Financial Advice Centre’ (no joke).

 

After months of being on a dialler system making hundreds of calls a day to unsuspecting banking customers under the guise of providing them with much needed advice around their insurance needs, I realized that something was wrong. There was something fundamentally flawed with the approach we were told to take, the culture and environment that celebrated when someone was able to close a sale and the predatory behaviour that surrounded me. I wish I could say this was an isolated event, but unfortunately it wasn’t…

Over the course of the following decade I worked my way through numerous financial services and advice businesses, ranging from big banks, independent and non-aligned firms looking for what I understood was the essence of what a professional adviser should do. In the majority of these cases, what I hoped to find was nowhere to be seen.

This is a common theme for many so called ‘financial advisers’ today who have cut their teeth in an industry built on sales and product pushing, instead of conducting themselves as a respected professional. This is the root cause of the problem Australian’s have been facing when it comes to seeking financial advice and I put it down to a few items below;

  1. Our industry is built upon vertical integration with an aim to push aligned products down the chain using advisers as a significant part of their distribution strategy. If you are aligned with any financial services organisation that manufactures products, this is almost a certainty!
  2. The barrier to entry is terribly low and has always been this way up until recently. It is scary to think that with as little as a diploma that can be obtained in a week, someone can be providing financial advice that could change someones life! Luckily there are now educational requirements that need to be achieved which will push many out of the industry
  3. There is a lack of objective and unbiased education for consumers that is engaging and easy to understand. Although there are websites such as Moneysmart, they lack the ability to attract consumers to seek them out to educate themselves prior to seeing an adviser. Although this is no excuse for the atrocious acts that have been committed, the best way consumers stand a chance of protecting themselves is by learning some basics to ensure they aren’t mislead
  4. The current compliance regime is outdated and allows far too many to fly under the radar being protected by their licensees because they bring in so much revenue for the business. Licensees and dealer groups should be doing more to protect their customers and implement safety nets to check ALL advice provided to ensure it is within the clients best interests
  5. Implementation of a standardized advice framework which ensures advisers are working with their clients to understand their goals, educate them around their options, help facilitate their decisions and hold them accountable to the journey. This is not about sales, it should be about the client first, strategy second and product last.

For all of the reasons stated above, we created Aureus Financial to try and set the gold standard for how clients get access to wealth education and coaching. It is my mission to revolutionize this industry and help more people get access to the right advice when they need it most. With less than 15% of the population actively seeking advice and with scandals like the Royal Commission further tarnishing the industry, I am proud to have binned the term ‘financial adviser’ and look to start fresh with the term ‘wealth coach’ that can be a term that clients can trust.

If you are a client looking to ensure you protect yourself against the risks of predatory advice or want to ensure you work towards what you define as financial freedom, please feel free to reach out to me and I will give you a FREE copy of my book that will give you a checklist that helps you find the right guide.

If you are a ‘financial adviser’ and you want to set the standard for what a professional adviser should be, forget all of the rubbish you learned from your peers, create a framework that allows you to play an active role in helping your clients achieve financial freedom and stop selling rubbish your clients don’t need under the guise of tailored advice!

Thanks for reading,

Jackson | The Wealth Mentor

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