Beware too much focus on culture in the Justice Hayne’s Royal Commission into the banks, superannuation and financial services industries.
Blaming culture for past behaviours in the financial services industry is like blaming the seasons for our changing weather patterns.
Past corporate behaviours being exposed by Judge Hayne’s Royal Commission are more systemic than cultural.
For instance, the founder of Facebook wasn’t testifying before the US Congress recently because of the culture of his company – he’s there because the business model that has built Facebook is fundamentally about using the personal information collected for whatever means possible.
Facebook has built a culture and set of behaviours using the personal information of its users with too little care or transparency about how their fortunes are made.
So too our financial services industries.
The majority of Australia’s financial services industries are systemically conflicted.
Financial advice is not the same as financial products.
Until financial products are separated from financial advice, the reputations of financial corporates will continue to fall below the community standards and expectations they intend to serve.
Until financial products are separated from financial advice, their talented marketing people will still create strong messages of their social responsibility and ‘new directions’ whilst their revenue-making DNA is systemically driven by product sales.
Until financial products are separated from financial advice, any increase in ‘advice’ regulations will only strengthen the giant financial firms as they are better resourced to manage the adherence to further product-based compliance.
Hopefully, Justice Hayne’s Royal Commission will help unearth the systemic causes of an industry that continues to fail to meet expected and required expectations.
The 57 banking inquiries over the last decade, might be a hint not to keep going over the same ground, not to keep making similar recommendations, so we don’t continue to deliver similar poor advice outcomes for most Australians.
It won’t be easy to separate the systems, beliefs, paradigms and regulations of financial advice and product.
But it is the first step required to re-build the culture of trust.
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 leads a like-minded team of professional advisory firms seeking to create greater certainty for their clients. As an author, blogger, columnist, and keynote speaker, Jim is regularly called upon for his professional insights into the advice industry. His latest book Seeking Certainty is available now.