Pyramid business model hampers potential

financial-planning/

15 February 2017
| By Jassmyn |
image
image
expand image

The financial services industry's progress and potential is being hampered as vertical integration models are an extension of the pyramid business model that dominates the corporate landscape, a financial services executive believes.

Connect Financial Service Brokers chief executive, Paul Tynan, said the pyramid structure had resulted in internal cultures of risk aversion with high compliance regimes, and infrastructures devoted to protecting the brand at all costs.

"Since 2007, financial institutions have operated in an environment of over regulation that quite literally drowns individualism, turns employees into bureaucrats and has killed innovation," Tynan said.

"At the frontline are accountants, financial planners and lawyers valiantly trying to address rapidly changing consumer needs whilst being hindered by disconnected institutions and government.

"We need to change these pyramid models and review education/ training practices as it will be technology and new work practices that will force change and in doing so create new jobs for the millennials. The overhaul has already started."

Tynan said that corporate Australia typically had elite boards that made CEO appointments for six years. These new CEOs would immediately introduce a re-structure and rolls out a new business plan, and any employee who did not agree with the new direction were retrenched, moved sideways, or branded ‘not a team player'.

When the CEO retired after no share price growth and poor profit returns, the cycle would start again, he said.

He said he wondered if the general population had realised that the promise of the trickle down economic benefit narrative of the past 30 years had failed them abysmally.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 4 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 5 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 3 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND