“There’s been a really big drive both within the industry and from government to change the [financial advice] industry in a number of ways, but the most difficult change is cultural,” CoreData Australia principal Andrew Inwood told ifa.
“Those who can evolve and change their culture are going to survive and those who can’t will just disappear, either because they’ll dip out because it’s all too hard or because they are no longer economically viable,” he said.
“You can train a team all you like but unless there is a winning culture that fosters success, they’re not going to get anywhere.”
Describing it as the industry’s “big hurdle,” Mr Inwood admitted that bringing out behavioural change is “so much more complex” than procedural change.
While many in the advice industry have embraced the regulatory and professional changes and embarked on innovative change management strategies, many are still holding on to an out-dated professional culture, he said.
The comments follow the release of CoreData’s Culture of Advice white paper, which emphasised the need for a cultural shift in the industry.
In particular, the white paper listed “history of a sales culture, not a professional service culture”, “history of an incentive culture”, and “not putting clients’ interests first” as areas of particular concern.
The white paper found that negative attitudes towards regulation are hindering positive change management, citing statistics that 53 per cent of advisers say the Future of Financial Advice (FOFA) will have a negative impact on their business.
CoreData research associate Tom Cole says advisers – and managers in the financial services industry more broadly – need to develop a culture of creativity and learning and be more “tolerant of mistakes.” They also need to provide resources for training in ‘soft skills’ rather than technical or ‘hard skills’, he said.
As an industry we desperately need to adapt a culture of change. This underlying cultural shift will then allow our industry to become more creative and FoFA will be something to use rather than worry about.
Many advisers want to be recognised as professional, they want to gain more clients, they want more profit by adding more value. And yet if statistics are correct at a time when we should have been adapting, i.e. the GFC, practice principles spent less time working on their business practices than when times were good. Soft skills for example would reasonably have been a developmental plus for a number of advisers, just because more skill means you do it better not that it was bad to begin with.
We need to be less defensive and more positive, we need to be less secretive and more open with each other and we need to be open to criticism rather than scared of it.
Would be interesting to read the report, sounds right on the money
If the financial planning industry bodies and commentators were serious about change, being professional and looking after clents for real, then SOAs would all be no longer than 10 pages. END OF STORY. The FP industry is a complete joke, you know it, clients are sick of it & its over charging of fee for service is just “commission” wrapped in rainbow / navel gazing speak.
Clients will not put up with $2000 plus SOA fees & $2000 service agreements for too much longer. Compliance and adviser cost of running an office needs to be SLASHED urgently.