Why access to financial advice should be an election issue

Building a nation of prosperity through quality financial advice should be an election issue, argues Jan Kolbusz.

As the nation counts down to an August federal election, it will be interesting to see how the issue of creating strong, world class financial outcomes for all Australians ranks on the list of key policy announcements by the major parties.

The industry was only getting started on digesting the Cooper Review’s recommendations when the Prime Minister, Julia Gillard, announced the August poll.

The election has effectively mothballed a critical policy piece for the time being and created a sense of uncertainty about the delivery of quality financial outcomes – based on superannuation reform – for most Australians.

However, we need to keep talking about long-term systemic changes that have the capacity to positively benefit every working person. Surely this makes for a potential election policy platform that is a sure fire winner?

It would certainly be a shame to waste the momentum and debate that Jeremy Cooper’s review generated since its release a few weeks ago.

Cooper’s idealistic approach is reminiscent of turn-of-the-century industrial pioneer Henry Ford, who famously remarked that an idealist is one who “helps other people to be prosperous”.

It is hard to ignore Cooper’s underlying motivation – through his desire to further democratise super – to create a nation of prosperous, well-advised and engaged superannuants.

The good news is that future prosperity won’t end with the client or fund member. The advice industry will also benefit. Why?

The industry will invariably need to galvanise around how it meets a raft of new challenges – from the removal of commissions to tougher governance standards through to the new ‘product neutral’ charging regime, which at its heart is all about transparency and client-centric (opt in) fee structures.

But the greatest challenge (and opportunity) for the advice industry is even more fundamental: finding sustainable and scaleable ways to meet unprecedented demand for quality financial advice.

Technology holds the key, helping to unlock the true value of advice by allowing advisers to truly advise.

Industrialisation of financial advice

Reading between the lines of the Cooper Review report, the financial advice industry is now in a prime position to capitalise and move ahead to a period of what our firm calls the industrialisation of advice.

In this context, I use the term ‘industrialisation’ advisedly. It does not mean the simple automation of a complex process. Nor is it about focusing simply on the end product, often referred to as the commoditisation (read: dumbing down) of quality financial advice.

By my terms of reference, 'industrialisation' means the response by the industry to greater market demand by broadening available choices and increasing the efficiency of the delivery of services and product.

This is a key differentiator. My definition is not – to paraphrase Ford – to give customers a car painted any colour, so long as it is black. It is about giving customers a multitude of quality advice outcomes, services and scaleable delivery mechanisms that build and enhance wealth.

And it can be available in any colour you desire.

Discussion about the integration of online technology into the advice process has typically targeted the weak links.

There are many so-called software alternatives being marketed today that are simply piecemeal and often created as a knee jerk, opportunistic or one-dimensional response to a multi faceted set of industry demands.

Such responses typically limit choice – in the advice space this would mean a ‘cookie cutter’ advice model with inhibited delivery mediums.

I believe we are on the cusp of an immediate and sustainable growth period for the advice industry in Australia that can set a world standard for quality advice delivery.

And to give the final word to Ford, which also serves as a timely reminder to politicians of every persuasion: “You can’t build a reputation on what you are going to do.”

For our part, we look forward to helping the advice industry build its reputation on what it does best: deliver quality advice and prosperity for all.

Jan Kolbusz is the managing director of decimal.