I didn’t hear much about value in the Banking Royal Commission reporting.
Specifically, I didn’t hear much about the value Australians have been seeking in their financial lives from their bankers and advisers.
Counsel assisting Mr Hodge QC came close to it when he asked Mr Brian Hartzer CEO of Westpac.
Will financial advice be something that ordinary Australians will ever be able to afford?
Mr Hartzer’s reportedly responded:
"I think, potentially, if it's done through technology”
That’s a logical and insightful response.
Mr Hartzer shares a common view that what we know as financial advice today, will be spread by technology.
But, it’s the wrong question.
The Un-asked Question…
The question I’m interested to ask Mr Harter is why, after decades of providing financial advice, don’t more Australians value advice.
Making advice more affordable won’t make advice more valuable.
But making advice more valuable will make advice more affordable.
But this point has potentially been missed.
Mr Hartzer, why haven’t the banks made financial advice more valuable for more Australians?
Role of Bankers...
Because bankers have never been paid to understand the value of advice, they’ve been paid to sell products.
They understand very well the value of their products.
But that hasn’t helped Australians, when they are facing situations when their own stakes are high, when significant decisions need to be made, and all they seek is advice they can value.
Consider if you were rushing an ill loved-one to a hospital emergency unit – what is your priority?
To seek affordable care or valuable care?
Like medical services, making financial services and advice affordable is an important objective, but only after making financial advice valuable.
The banks have failed to make financial advice valuable, because they have never been in the financial advice marketplace.
They are in the financial product marketplace.
That is why we have had the fee-for-no-service debacle.
The whole industry has been continually ‘clipping the ticket’ on past products bought, regardless if value is being delivered, year after year.
Australians need great financial products.
But more than that, they need valuable financial advice that’s not delivered by a group that makes its money selling products.
What do you reckon?
About Jim Stackpool
For nearly 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. As founder of Certainty Advice Group, he licenses advisory firms to the firm's professional advice standards to meet his objective of making financial advice valuable for majority of Australians. As a consultant, author, blogger, columnist, and speaker, Jim and the firm's Certainty Advisers aim to provide a benchmark for professional financial advice throughout Australia. His latest book Seeking Certainty is available now.