Appearing on Netwealth’s podcast, Between Meetings with Matt Heine, former commissioner of the Australian Securities and Investments Commission (ASIC) Danielle Press argued that following the 2019 royal commission, the advice profession appears to have reverted back three decades.
“I think the outcome of the royal commission was predictable. Big banks went, ‘This is all too hard. We haven’t actually priced risk properly. We can’t manage this in a way that is profitable. We’re out’,” Press said.
“The industry now looks like it did 30 years ago, actually, where there were a whole lot of independent financial advisers, and the big guys but … there was a lot more choice around where you could get your advice from, what type of advice you got.
“So, it feels to me a little bit like back to the future.”
She explained that super funds have taken over the role previously played by banks and insurance agencies, working their way into advice, but that they do have a role to play in the future of advice as long as consumers are adequately informed about the service they provide.
“In this future, it’s the super funds that are taking the position of the banks, right. They don’t look unlike the old, tired insurance agencies, particularly when you start looking into and facing into the retirement space and thinking about longevity products, which are truly long-term lock-in products in a completely 100 per cent vertically integrated business,” Press said.
“I really hope that as an industry, we’ve learned some of our lessons and we don’t go back to some of the poorer behaviours that we saw before from that tiredness, and the vertical integration doesn’t worry me, vertical integration for me is absolutely fine actually, as long as you understand what it is, manage the conflicts, and your customer knows what it is, right?
“What worries me is when you go into Ford, and you’re given a Toyota, but you think it’s a Ford, right? That doesn’t work. It’s got to be, you’ve got to be really clear about what you’re selling. I do think we’re a little bit back to the future.”
Regulatory changes over recent years, she added, focused too heavily on consumer protections, and recent efforts to roll back over regulation have benefited the profession overall.
“I think the pendulum on the regulatory side swung too hard, right? And I think it’s gone to, ‘We’ve got to protect the consumer at all costs. These big, bad, terrible financial advisers. The industry is broken’,” Press said.
“I don’t think the industry was ever broken. I think there were parts of it that were broken. But again, I think it was predictable that it was going to swing that hard. And I think some of the unwinding that we’re now seeing is pretty important.
“I think the Quality of Advice Review, again, that feels a little bit like back to the future to me, you know, ‘Let’s replace an SOA with a record of advice’. Well, before [the Future of Financial Advice reforms] isn’t that what we actually all did?”
Furthermore, Press explained that the advice profession seems to have gone in a cycle, now resembling it as it was decades ago when it was more respected within the wider Australian community.
“Let’s make sure we’ve got the interest of the client but it doesn’t have to be ticking off all of these very specific duties. You know, I think all of that stuff is important and I think there’s a balance here,” she said.
“I do think the industry is professionalised and I think that was really important. But again, if you cast your mind back 30–40 years ago, financial advisers were absolutely pillars in our community. They were people that could sign statutory declarations, they were clearly being thought about as professional people.
“Somewhere we lost our way and I think we’re now getting back into that. The biggest concern for me is, are we ever going to have enough advisers to service the country? The answer is probably not, which means we’re going to have to rely on technology.”
“The biggest concern for me is, are we ever going to have enough advisers to service the country?”
If you are so concerned Danielle, maybe re-visit grade 6 mathematics.
15,000 advisers x 3 appointments per day x 4 days per week x 40 weeks per year = 7.2 million appointments per year.
As at June 2024 there were 14,402,500 workers in this country. Some don’t need advice, some don’t want it, and the majority are couples. I would argue that a ratio of one appointment per year, for every 2 workers is entirely adequate, in fact quite a lot more than needed.
The only reason we can’t handle a perfectly reasonable 3 appointments per day, is because we are tied up with excessive red-tape that no other profession has to put up with. Most of the red-tape excesses were forced on us by ASIC, or legislated in large part thanks to ASIC’s shamefully biased and mis-sold REP413, their lobbying of politicians, interference with FASEA etc. all during Danielle tenure at ASIC.
I’m not saying all of our problems (or even any of them) are directly attributable to Danielle’s behaviour at ASIC. But she was a senior leader in that organisation and they have a lot to answer for. So it is a bit rich to now come out with such nonsense comments. I’m guessing there will be a flood of former ASIC and Treasury bureaucrats popping up to line their pockets as senior managers at industry funds leading their (un)qualified adviser sales reps. What a stitch up.
Well said.
Very disappointing that NetWealth is broadcasting the views of the totally discredited Danielle Press. She played a major role in persecuting professional licensed advisers, and pushing consumers towards scams and dodgy products. The only thing anyone wants to hear from her is an apology for the damage she caused, and an undertaking to pay every last cent she was paid by ASIC to the victims of unlicensed advice.
“The industry now looks like it did 30 years ago, actually, where there were a whole lot of independent financial advisers”
Is she deliberately baiting us with this remark, or has she actually forgotten that ASIC banned the vast majority of us from using the phrase ‘independent financial adviser’ during her tenure.
For many years I thought ASIC were hellbent on destroying the careers and small businesses of financial advisers because they are callous and hateful. Turns out they are just complete morons.
No idea then & no idea now.
For someone who had fingers in the Robo advice space, this commentary is utterly irrelevant.
I don’t know which world Danielle Press is living in but pretty sure it is not the same one that most current advisers are living in…!
Her views are so off the mark it is laughable.
30 – 40 years ago ‘Pillars in Society’? A two-week course turned you into a financial adviser back then. It was all about assets under management and commission. It wasn’t a profession back then and despite some comments to the contrary it is still not a ‘recognised’ profession. I really hope we have not gone back to the future.
What do you think the Super Funds will be doing with their “Qualified Advisers”. In house staff on the payroll allowed to give personal advise to members and bonuses are allowed? Sell baby sell? You really fell for that “become a profession” story and it will all be OK? These in house “Qualified Advisers” are employed – which means they will likely be doing as they are told. Very unlikely to be selling a product of a competitor because it was better etc?
The only thing which appears to have changed is Retail Super has been decimated (Conflicts of interest and consumer detriment were the tools used) and Industry Super it appears has a dominant position in FUM terms of inflows (Industrial Awards) and now retention via “Qualified Advisers” and real Financial Planners having client numbers reduced (reducing rollovers from?) – but I could be completely wrong?
Seems Ms Press has now changed her tune – seems she now believes conflicts can be managed – consumer detriment is no longer an issue for vertically integrated Super Funds recommending the inhouse product?
Wonder what changed her mind?
Was “it was all about assets under management and commission”?
Looks to me that it is now all about FUM. Commissions are only useful for smaller market players to get market share right against the big players – and that is over – the Super War has been won.
Does Danielle Press actually think her actions and those of her ex employer ASIC have been beneficial to clients? 30 years ago clients had easy access to professional advice at a reasonable cost. The intervention of the government and regulators, together with their demonization of the advice profession by ASIC, has resulted in clients being significantly worse off. Going back to the future would mean taking the foot off the throat of the advice profession, not forcing clients to get poor quality, conflicted advice from super funds.
Gosh, this is frightening. Someone please call the Guinness Book of Records.. These comments set a new world record for the ratio of BS per words spoken.
It’s back to the future alright. Big super vertically integrated Tied Agency style of the 1980s. All enabled by Annual Fee Renewal Consent forms (that simply do not exist in any other nation on earth). Despite articles to the contrary, the “system” is happy that millions of Australians are no longer able to access low-cost independent advice, and the businesses of retail advisers are being systematically victimised as a result. The playing field is so unlevel, it’s a joke.