After attending the Financial Services Council (FSC) annual Leaders Summit last week, I made a number of interesting observations. Of course, there was the usual array of intelligent people making commentary on the state of our economy, financial advice, diversity, superannuation and our position vis-à-vis the world.
All expected and well delivered. But there was a subtext to the conference ― almost a longing, for issues that were far less tangible than the above subject matter.
When people won awards, I heard them ask for an industry united ― not industry funds versus retail super funds.
When the planner session explored how financial advice is utilised in Australia, I heard a plea for trust from the public.
When an international speaker revealed that Americans embrace financial instruments much more than Australians (only 24 per cent of American wealth is tied up in property, compared to 58 per cent in Australia,) it confirmed in the audiences’ minds what needs to change for Australian investors to really embrace what the finance industry could do for it.
While there was an acknowledgement of how successful our industry has been (it is in fact, Australia’s biggest sector as a financial contributor), the elephant in the room, were the problems we have ahead of us.
Most of them are not technical issues. Sure, further product development is needed to suit our ageing population, and life insurance frameworks are crucial to getting the best outcomes for policy holders.
But the biggest challenges our industry faces in truly being transformational for Australians in the future are not going to be solved by technical genius. Instead we need to focus on engaging people to rebuild their trust and help them to obtain a self-funded retirement.
This is emotional intelligence territory, and one that quite frankly makes most analytical, technical people cringe.
How to make people feel, how to change their actions and keep them engaged for the long-term are challenging and critical issues for our industry. Building trust takes time, and when the mainstream media makes a sport of every scandal (sometimes with good reason) it's another nail in the coffin for why people don't want to engage with, or trust us.
Unless we as an industry can create a long-term strategy of change and engagement, this problem is not going to get solved. We believe this requires telling our story differently, and in a language that people feel comfortable with. It's not a short-term campaign; it's a 10 year process that needs investment and commitment. Nothing short of this will change anything.
If we don't get it right, there is a lot at stake. My generation (Gen X) is heading towards a retirement where 50 per cent of us are supposed to be self-funded. Relying on the sale of property to achieve this won't cut it, as people still need somewhere to live.
If we don't think differently and act now, this will grow to be one of the biggest political and economic issues Australia faces. Many in the industry see it, but don't know where to start.
I suggest that it cannot be done alone. The question remains, whether we can come together to create long-lasting change.
I for one believe it can be done. Do you?
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