Regulatory changes are diverting attention from areas of impact

Speaking at the Stockbrokers Conference in Sydney last week, Maria Lykouras, chief executive officer at NAB-owned wealth manager JBWere, expressed her concern that advisers are devoting excessive resources and time to regulatory changes.

“We spend a lot of our time focused on regulatory changes. And actually, not being able to spend our money in the places that would make a difference,” Ms Lykouras said.

As a result, she emphasised that the advice industry is experiencing stagnation and a slower pace of progress than it ideally should.

One example she gave is the approach advisers have to adopting technology, a crucial aspect of their future engagement with younger clients.

“We’re very reliant on the technology that we use to support us but we’re not the quickest industry to move. I look at the way that consumer behaviours are changing and the way that they want to interact with us and particularly the way that the younger generation is going to want to interact with us. And I have yet to see that many players are really moving forward in that space and really trying to drive change in a way that is going to respond to the future needs of our clients,” Ms Lykouras said.

“I think a big part of that is because we spend a lot of our time focused on regulatory changes,” she added.

Touching on the depleting number of advisers in the industry, Ms Lykouras also emphasised the importance of allocating greater attention and resources towards recruiting new entrants.

“We know that the workforce is getting smaller and smaller. These days, we need to grow great advisers.

“We need, as an industry, to make sure that we’re finding these great young people, that we are investing in them, that we are showing them that this is a great industry to be a part of, that our senior advisers — that unfortunately these days, are not far off retirement — are spending time with them and building them and bringing them that kind of knowledge and experience, and passing that on to them,” Ms Lykouras explained.

“As an industry, we need to keep focusing on how we continue to develop and grow the interest in this industry.”

Turning to the Quality of Advice Review (QAR), Ms Lykouras said she believes it has the potential to elevate professionalism in the industry.

“I love what Michelle’s [QAR reviewer] done. I think if we can implement the Quality of Advice Review recommendations, we will go back to something where we’re relying on professionals who make judgement, who can deal with the complexity of the client that’s in front of them, that they’re able to provide good advice based on what they know, what they’ve learnt, their experience and the focus on ethics that we now have in the industry,” Ms Lykouras said.

“And if we can implement those changes, we can move away from 90-page documents that no one cares about or reads to something that actually tells the story to the client of what the true advice is that they are receiving.

“And if we can have that flexibility to do that, we as an industry will be in a much better place and so will our clients.”

Last week, Financial Services Minister Stephen Jones confirmed the government is due to publicise its response to QAR shortly.