Advisers need to foster behavioural and cultural change in order to survive as the sector moves from a "cottage industry to a profession", research provider CoreData has warned.
“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.
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