Royal Commission Review

Over the past few weeks there has been an enormous amount of press over the findings from the Royal Commission, the behaviour of the financial planning industry and the main licensees, the Banks and AMP.

This business group has been trusted with providing advice and services that should be unquestionable, above reproach and of the utmost benefit to clients.  Yet sadly through a series of in depth questions, the outcome and advice is again in question.

As financial advisers who have committed our working lives to providing quality solutions to clients, we take these revelations very personally, as every misdemeanour revealed saddens us that these stories exist.  At the same time, we reflect on what we do as a business and simply wonder whether there is an element of “media license” in what we are reading?   Are the issues being raised systemic or is it more a series of questions designed to provide a predetermined outcome?

Whilst in no way do we support bad practice we have always been of the view that there are two sides to all stories.

There are many advisers who do the right thing by all parties, who sweat blood to ensure their clients are given the best possible outcomes, who take it personally and who do their absolute best to make it right.  Sadly these people seem to have missed the invitation to present to the Royal Commission?

We are of the view there are thankfully more good stories where the advice given has absolutely benefited the client than there are bad ones.  Otherwise why does our business for example continue to receive quality referrals from very appreciative and thankful clients?

Whilst we are unable to call ourselves an independent firm ( as we do not hold our own license due to compliance requirements and costs), we are a stand-alone business, self-employed and founded and run by the people who you speak to when you phone up for help.

Like every true advice firm in Australia, we rely on and are required to have a financial service license to operate (in this case provided by Financial Wisdom).  However, our obligation to them does not extend beyond the mutual agreement to provide the best possible advice that is about what is best for our clients first and foremost.

We are not and never will be driven by the sales based targets underlying the Banks in house financial planning networks.

One thing we both agree on is that we can confidently put our hand on our heart and say that everything we have recommended has been in our client’s best interest at that time.

Our business’s sole focus is on providing advice that benefit’s our clients, without conflicts, this is why we elected many, many years ago to adopt a fee for service model and remove where possible ongoing commissions.

Our recommendations are based on extensive research, evidence-based investigation and knowing the finer details about our clients circumstances.

  • We believe that where a fee is paid for ongoing support and services, those services will be provided. This includes making sure we are both proactive in our communication, steadfast in sticking to the principles that underpin smart financial decision making, as well as being available when it’s needed.
  • Finally, and maybe most importantly, we only provide advice to those we believe it will benefit and, where we believe that there is no future value to be created from a course of action, we tell it straight, even when it’s not what someone wants to hear.
  • Also in the event that you should die, we will continue to provide quality advice to your dependants and family, to distribute your wealth and investments as you would have wanted.

It’s hard to write a message like this without appearing a little defensive or in seeming like we are trying to distance ourselves from the industry.  However, we have very clear beliefs about what quality advice is and isn’t.

Without a doubt, the relationship between an adviser and their client is one of trust; this is at the heart of what we have seen throughout the Royal Commission.

Trust is not something you can regulate or legislate. It is earned and not bestowed.

We have seen many changes in regulation over the past number of years, some of these changes we are yet to see the full effect of.    Our target is to be identified and recognised as a profession but there is still much work to be done until we reach that point.

The advice community has the same responsibility today as it did prior to the Royal Commission. Now more than ever we need to educate consumers about the value of advice.

We need to build trust and demonstrate the benefits of engaging with the right adviser by showcasing the great outcomes that clients have achieved.

We welcome the Royal Commission, as we believe that in order to have positive change you need to highlight what is the current status and why it isn’t acceptable.    The stories arising though are at times hard to hear, often unpalatable and all-too-often exposing behaviours that are indefensible.

However, this only strengthens our resolve that the path we’ve chosen as a business in the way we provide advice is the right one.  Much is still to be resolved and many questions need to be answered, including the future direction of both legislation and process.

If you have any questions about topics arising from the Royal Commission, or have questions about how we work with you in relation to the issues raised, we welcome the opportunity to provide more comfort that the only interest our business is built around is yours.

 

Brenton Marriott and Paul Murphy

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