How could this such gross financial misconduct have happened and what effect will it have on those who give sound financial advice in the future?
The gross misconduct of a few and the lax mismanagement of the mighty many has tainted Australia’s biggest — and most lucrative — business sector, finance. If you’ve watched any of the videos of the Royal Commission Court hearing, it sounds very much like a case of school yard blaming. The footage is riddled with pitiful retorts by top level executives defending themselves with feeble excuses along the lines of: “It’s not my fault,” “I didn’t quite mean that,” “Yes, we could have taken that approach,” and “We should have done more”… You almost feel sorry for them! Almost...
I started following the Court hearings at Module 6, Day 58 and worked back, hearing evidence: ranging from Robert Whelan, CEO of the Insurance Council of Australia (ICA), to actual case studies of complete misconduct.
The Executive summary takes pains to identify the flaws in the culture of this industry to be:
- The pursuit of short-term profit at the expense of basic standards of honesty.
- Conflict of interest when selling and advising customers on certain products and services.
- The lack of responsibility for third-party actions when on-selling products.
- Little to no consequences for misconduct.
- A culture and focus on sales over service and honesty.
- Taking advantage of consumers by selling them complex products that they neither need nor want.
But what will be the outcome once the loopholes have been closed, the code of practice has been tightened, processes and procedures have been created, compulsory advisory codes have been introduced, unmonitored third-party sellers have been stopped and so on?
Based on the number of workshops I’m running for Financial Planners, I’ve seen an entire profession crumble under the clouds of misconduct by the banks.
What will be the outcome for people still working in the finance industry — the financial planners, superannuation advisors, insurance sectors and the banks themselves?
My sympathy lies not with the banks, but I do note that the hefty reimbursements will be painful for them. The ABC news reports that the cost of bad behaviour sits currently at $3.8 billion, but could reach almost double that at an appalling $7.4 billion.
I empathise with the financial planners who are being forced to go through the process of working out what their future businesses look like while also figuring out the difference it would make to not be under the banner of a large bank tainted by this profit-mongering scandal.
The gross misconduct of a few has been plastered all over the news, but left behind are many professional, passionate and highly ethical financial planners who have been inadvertently caught up in the middle of this seething turmoil. Across the banks, decisions are being made about how to manage their financial planning services and the ‘conflict of interest’ that applies to these services (see the links below for more information):
But what does this mean to those financial planners who are soon-to-be small business owners?
The collapse in trust and credibility in the financial planning sector leaves alarmed customers desperate for reassurance and honesty. It’s therefore essential for financial planners to launch their new brand from day one, reinforcing integrity and transparency at every customer touch-point. But how can they do this?
The answer is by pre-empting customers concerns, reinforcing positive results while also offering transparency upfront for every fee and ongoing expense, all wrapped up in authentic customer service and the best, personalised advice for every situation.
Starting a small business is tough enough under normal circumstances, but when stepping out from under the banks’ collective cloud of shame — there’s no room for settling in — TRUST needs to be the focus from the onset.
Where to from here?
It’s important to understand the change this scandal has made to the market, address public perception and concerns and take decisive, positive action to reassure and build confidence with those customers from day one. It’s also critical that these financial planners endeavour to leverage the benefits of a professionally set up business and a strong brand message that builds confidence. I’ll be running Brand DNA and Strategy Workshops specifically for financial planners caught up in this chaos to ensure that their unique and authentic brands are set up ready for a smooth launch. With our extensive experience and capabilities, we’re able to take care of all things brand, design, digital, print and installation… Meanwhile, the business owners’ can focus on taking care of their customers and building on that all too critical trust I mentioned earlier.
We work with teams of financial planners and would be happy to include others who are travelling on this financial rollercoaster. We’re here to make the ride easier...
To find out more on how to build an authentic brand from day one and the structure of our tailored two-day workshops click the LINK below.
For examples of our happy clients and design work, take a look at some of the case studies from our financial customers: https://www.livinglines.com.au/finance/
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If you’re at a crossroads in your business and you’d like to have a chat about the potential opportunities within your business — or you’re ready to stand out as the expert in your field,— please contact us – we’d love to hear from you…
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