The royal commission inquiry into misconduct in the financial services industry is different from other inquiries the industry has been through and addressing the issues it has exposed will require a different response from the industry.
Madison Financial Group chief executive officer Annick Donat says that for the first time the results of bad advice and poor practices have been given a human face, and a human problem demands a human response.
She says the industry has traditionally addressed its perceived shortcomings through a product lens. But “solutions” that have been proven not to work in the past won’t address those issues in future.
“Every response we’ve had since the royal commission has been a product-led discussion, with CEOs coming out and [saying] it’s going to affect my bottom line by this much,” Donat says.
“Do you think any Australian cares? So my first point is it’s a human problem and we need a human response.”
The human cost of advice failures has been laid bare for the world to see, and Donat says each licensee will find its own way of helping advisers to respond. She says success for Madison and its advisers will rest on three pillars: encouraging advisers to self-govern; encouraging advisers, licensees and clients to share responsibility for clients’ financial affairs; and finding ways to provide clients with access to advice how and when they need it.