Of the 120,000 or so people who work in wealth management in Australia, only 20,000 are financial planners. Most of the other 100,000 work for product providers - whether that is funds management, insurance, platforms, advicetech firms, etc. And nearly all of those product providers, make nearly all of their income from sales via financial planners.
So you would think that deeply understanding the advice process would be absolutely key. You might even think that the easiest way to understand the advice process would be to see a financial planner and go through the process.
But here's a nasty little secret - hardly anyone who works for a product provider actually utilises the services of a financial planner (or has worked as a financial planner) themselves. Given this, is it any wonder that financial planners are constantly bemoaning the fact that product providers just don't 'get' them? I'd say not.
Over my career, I have often asked fin services people why they don't see an adviser. They tell me that they can make their own decisions, they know the products well, they can beat the stock market themselves (!), they are smarter than financial planners (!!) and given all that, they don't understand why it would be worth paying thousands of dollars to a financial planner.
But here's the rub. In my experience, financial services employees can be the absolute worst when it comes to sensible fiscal household management! The number of people I know who overspend in order to keep up with the Joneses is ridiculous. As is the number of people who bet on anything that moves and are always chasing the latest investment idea. So the very people who would benefit from (and have the means to pay for) financial advice don't seek it.
Frankly, I would like to see it as part of the standard on-boarding for new employees into any financial services company - a full financial plan done by a financial planner. I tell you what, the innovation and new ideas that would be surfaced by that change alone would be extraordinary.
*This article also appeared in Financial Standard on 4 October 2019.