Fortune favours the bold
“To see the right and to not to do it, is cowardice”
- Confucius
Almost 5 years after delivering his final report, former High Court justice Kenneth Hayne, recently discussed his Royal Commission at a conference of actuaries. His message was clear: the finance sector still has much to learn about conflicts of interest and what to do about them.
Financial planners are fiduciaries
With financial advice there is an ‘asymmetry of knowledge’ dynamic between the client and their adviser. The adviser is an expert in their area of practice and the client is seeking help. It’s a classic fiduciary relationship, not a commercial one.
When you’re named a fiduciary and accept the role, you must manage the person’s money for their benefit, not yours.
This benevolence doesn’t come naturally to human beings. We are hardwired to be focused on the best possible short-term outcomes for ourselves. It’s like Jack Lang famously said, “Always back the horse named Self-Interest, at least you know it’s trying.”
Australians want independent and unbiased advice
Research consultancy, MYMAVINS, recently asked over 400 Australians about financial advice. The research uncovered high unmet demand for independent advice. More than nine in 10 Australians (92%) agree that it is important that financial advice is independent and unbiased.
Yet, according to the SuperGuide Independent Financial Adviser Directory, there are only 135 truly independent financial advisers Australia wide. That is less than 1% of the 16,000 advisers currently practising in Australia.
Lake Macquarie Business Excellence Awards
It takes courage to build an independent financial planning practice. Our practice in Newcastle, When Financial Solutions, was founded by Chris Keating and Rick Latimore in early 2022. In less than 18 months, with the support of their families and their communities, and with the backing of the Catalpa group, they have built a thriving practice with the right foundations.
When Financial Solutions - Newcastle has been nominated for a Lake Macquarie Business Excellence award in the Best Start-up category. It is recognition that true innovation doesn’t need to originate in Silicon Valley; with vision, hard work and a generous dose of client care, it can happen in Eleebana.
Please consider voting for When Financial Solutions in the People’s Choice award here. Voting is easy and it only takes a few seconds. Voting closes 13 July.
This article is general and does not consider your personal circumstances so it may not be appropriate to you. If you would like advice specific to you, please let us know.
