While the Banking Royal Commission may have sent financial services industry members running for shelter, CFA Society President, Paul Smith, warned participants at the CFA Society Sydney gala lunch to not waste a good crisis.
In his keynote speech, Smith said financial services currently looked like an investment industry rather than an investment profession, where a profession aims to serve clients and an industry aims to push product.
Smith pointed to some CFA data, which said 62 per cent of CFA members believe adopting an industry code of conduct could increase investor trust, which is currently at 31 per cent (and has remained unchanged since 2016).
He highlighted figures which showed that retail clients of financial services valued trust over performance (35 per cent as opposed to 17 per cent), while for institutional clients it was split equally (24 per cent each).
A panel of experts also took to the stage to discuss Banking Royal Commission, specifically vertical integration, to which they showed concerns that the Government would radically push Commissioner Hayne’s recommendations rather than consult with industry members.
The panellists said completely cutting vertical integration wasn’t ideal and were worried it would significantly reduce the affordability of financial advice – something that is now prevalent in the UK following similar reforms.
