Why Australia’s financial services industry must come together | Publications | PwC Australia

Why Australia’s financial services industry must come together

Australia’s financial services industry must unite around a shared focus on the interests of customers and the community.

By Craig Cummins, Superannuation and Asset Management Leader, PwC

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Australia’s financial services industry has never been under more pressure but I’m convinced that we can overcome the challenges before us – and that the real winners will be our customers.

My optimism stems from the conversations I had at the Financial Services Council (FSC) Summit in Melbourne this week. I spoke with representatives from investment managers, superannuation funds, life insurers, financial advisory networks and trustee companies. Among them, there was growing recognition that we need to unite and focus on the one thing we all share in common: we have been trusted with the financial futures of millions of Australians.

We need to focus relentlessly on our responsibility to the community. That is the lens through which we should look for solutions to every challenge we face.

Change has to happen

We all know that good regulation supports sustainability, protects investors and enhances trust. But we can’t leave it all to the regulators. It is time for us to step up and accept that some of this change is within our control and our influence.

We also know that:

  • More effort needs to be directed at improving the financial literacy of the community we serve.
  • Customers need better access to appropriate and affordable advice.
  • The superannuation system doesn’t always cater for lower income earners or for people who don’t follow the permanent, linear, full-time career path.
  • Some financial services business structures and products are too complex.
  • There are problems with legacy arrangements.
  • We are still solving issues like duplicate accounts, erosion of account balances from insurance, and fee and cost disclosures.

In short, it’s clear that we need to make changes and move forward. Otherwise we will fail to keep pace with the evolving needs and expectations of the community.

Remember our customers

One of the reasons that we’ve failed to make enough progress to date is that the financial services industry is divided. There are too many vested interests which is leading often to organisational needs getting in the way of customer needs.

We must put aside those vested interests, and focus on the people who trust us with their hard-earned money. That will allow us to identify the most pressing issues and remediate them; to lead on policy change and regulatory reform; and to engage with a broader range of stakeholders.

We won’t make progress unless we accept that some short-term pain will come before long-term gain. That means we will have to compromise somewhere along the way. We should expect to see fewer legacy arrangements, fewer superannuation accounts, fewer superannuation funds and more targeted “needs-based” insurance.

The long-term reward for these compromises will be significant. We’ll have a greater sense of purpose and relevance to society, because we’ll be meeting the expectations of our customers. We’ll enjoy the loyalty and engagement of our people who crave meaningful and valued work. And we’ll be participating in an exciting industry that contributes to the financial wellbeing of Australians.

All this can only be made possible if we in the financial services industry unite on the issues and move forward. At the FSC Summit, I think we saw the start of the necessary momentum. Now we must follow through and keep this momentum going.

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Contact us

Craig Cummins
Partner, Superannuation, Asset and Wealth Management Leader, PwC Australia
Tel: +61 2 8266 7937
Email

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