So, life is pretty crappy right now in the land of financial advice. Between the Royal Commission, the Dover implosion, ASIC’s ongoing war on compliance issues, the court cases and the new education standards, you could be mistaken for thinking that we are seeing the beginning of the end of financial planning.
While I agree that the industry is in the middle of a pretty tough time, I really believe that the long-term future for financial advice, and financial advisors, is excellent. And here’s why…
Firstly, technology. Now, we have been promised that tech will save us all for quite some time, and it’s generally been complete bullsh*t. The incumbent systems aren’t that great, and many of the new ones are just ‘building a better mousetrap’, and not thinking deeply about the problem. But there are signs of hope. The user experience for Airb’n’b, Uber and a bunch of other new apps is fantastic. These apps are easy to use, do their job really well, and deliver on what they promise. This ethos will eventually get around to financial services software as well, it’s just a matter of time! (Spoiler alert, I’m working on a little something myself, stay tuned for future updates)
Secondly, the need for advice just isn’t going away. Now, this isn’t the same as saying that everyone who needs financial advice will seek out a qualified financial planner. And that’s where we need to think differently. How can we make it easy for people to get great advice, and how can we motivate them to get off the couch and do something about it? Both are tricky problems, but neither are impossible, we just need to approach the issues with fresh eyes.
There are more and more services popping up that deliver coaching and concierge services in all aspects of life – whether it’s life coaching, personal training, house-keeping services, errand running, dog walking, relationship counselling, meditation, self-improvement, the list goes on! We all want to be better people and we are willing to spend money to make it happen. One of the key challenges here is that getting financial advice, saving money and thinking of the long term isn’t quite as sexy as a six pack, and that’s an area that we, as an industry, need to do better. And I believe we will.
So what will this happy future look like? Here’s how I see it. Technology will be fully integrated into all aspects of the advice process, enhancing the relationship between adviser and client, and delivering on the coaching aspect that is merely a dream for most advisers. As an adviser, you will be alerted every time something untoward happens in a client’s portfolio or spending habits, and your clients will love the personalised service and advice. Plus, clients will happily pay for excellent advice, because they understand what advisers do and why it’s so valuable.
What’s more, in the future, financial advice will be a fully-fledged profession. We will get past the implementation of FASEA and come out the other side. Consumers will trust their adviser to always act in their best interests. It will be ‘cool’ to have a financial planner and to have your financial life in order. Students leaving school will want to study financial planning at university and a degree in financial planning will be admired in the same way as law and medical studies.
Now don’t get me wrong, we are a long way from that future right now. I heard a great quote, that you should be an optimist when it comes to the future, and a realist when it comes to the present. So even though I can see a great future for financial planners, I can also see that there’s going to be some serious work to get there. It’s incumbent on all of us to do what we can to support each other, support the industry, agree that some advisers really are sh*t and shouldn’t be anywhere near a client, and then put our heads down and make it work.
To sum up, I can’t tell you how strongly I believe in the benefits of great financial advice. It’s made a significant difference to my own life, and I want more people to have the same experience. Without my financial planner, I would not have been able to pay off my mortgage, which has then allowed me to start my own business, which has meant that I’ve been able to invest in developing a new technology – it’s a full circle really.
At the end of the day, we all want to be better humans. And great financial advice is a core component of that process. Onwards and upwards I say!