The financial services industry's progress and potential is being hampered as vertical integration models are an extension of the pyramid business model that dominates the corporate landscape, a financial services executive believes.
Connect Financial Service Brokers chief executive, Paul Tynan, said the pyramid structure had resulted in internal cultures of risk aversion with high compliance regimes, and infrastructures devoted to protecting the brand at all costs.
"Since 2007, financial institutions have operated in an environment of over regulation that quite literally drowns individualism, turns employees into bureaucrats and has killed innovation," Tynan said.
"At the frontline are accountants, financial planners and lawyers valiantly trying to address rapidly changing consumer needs whilst being hindered by disconnected institutions and government.
"We need to change these pyramid models and review education/ training practices as it will be technology and new work practices that will force change and in doing so create new jobs for the millennials. The overhaul has already started."
Tynan said that corporate Australia typically had elite boards that made CEO appointments for six years. These new CEOs would immediately introduce a re-structure and rolls out a new business plan, and any employee who did not agree with the new direction were retrenched, moved sideways, or branded ‘not a team player'.
When the CEO retired after no share price growth and poor profit returns, the cycle would start again, he said.
He said he wondered if the general population had realised that the promise of the trickle down economic benefit narrative of the past 30 years had failed them abysmally.