Australian planners can rally from the Royal Commission’s fall-out by uniting around positive stories and flushing out weakness, according to a Dow Jones executive who saw America’s financial advice industry undergo similar cultural challenges.
Sterling Shea, the company’s global head of wealth and asset management, told Money Management that the planners who grouped together and welcomed the push to professionalisation, advocated by both the Commission and the Financial Adviser Standards and Ethics Authority (FASEA), would come out on top.
“Advisers who are vocal, advisers who are participating in industry bodies, will come through strongly,” he said. “The idea here is a rising tide will raise all boats … and that competitive aspect [of the industry] has changed compared to five years ago.”
Shea felt the media tended to focus on the “bottom one per cent” of advisers, believing there was opportunity for better advisers to secure growth by sharing positive stories as he had seen in America when the industry was faced with criticism there.
“There was a mentality [in America] that financial advisers were largely sales people – ‘a broker culture’,” he said. “But the notion has now come to light [in the public] that a talented adviser can help with many facets of their life, especially amongst high net worth individuals.”
Shea also said that events such as the Royal Commission often provided a chance to flush out weaknesses in an industry, keeping just the best.
“Change in financial services usually comes with a healthy dose of catharsis,” he said. “Now, after the Royal Commission, the industry needs to rally around the very best people.”