Who to trust in the 2019 financial year?
2018 was an eye-opening year for the financial services industry. As a member of the financial services industry, the findings of the Royal Commission were expected, but the level of distrust now surrounding the banks and their related professionals have shocked the regulatory bodies, politicians and customers alike. We have seen this awaken the public’s misplaced trust that has rested within big branded financial institutions for so long. Interestingly, other financial professionals have not been pulled into the Royal Commission as well. With past scandals revealing conflicted recommendations of forestry schemes, undisclosed referral fees from financial institutions, unnecessary establishments of expensive self-managed super funds and capital raisings for highly speculative companies. All under the thin guise that wholesale clients should have been able to recognise the difference between good advice and advice that has in some cases caused a major loss of capital, one can only think that, in hindsight, the community needed someone to give them advice about the advice. At each level, the marketing machines of these financial institutions and certain professional bodies have been able to build an implied but unjustified trust from people.
The problem – Product makers (aka Banks et al) offering advice
Through the Royal Commission, it became apparent that these companies and professionals are in the business of manufacturing products (whether that be insurance, debt or investments) and creating those products without a direct link to outcomes for the individuals they were being marketed to and, more specifically, not remunerated on the outcomes that will improve the lifestyle and financial wellbeing of their clients. What is more surprising, and the reason I set up Cashel House some ten years ago, is that the average consumer (like myself) does not realise that the financial industry has morphed in to an industry that creates products and finds people in the community to sell them to, rather than having people as their clients and finding the right products for them. All resulting in the fact that both interests rarely align. Cashel House was established when I found the same obvious issues when engaging professional advice suppliers, investing in investment products and sourcing debt. At each level, none of these professionals were remunerated to improve my financial wellbeing. Rather, they were remunerated to recommend products (or undertake unnecessary work) in some cases that were not in my best interest.
The solution – Improve financial literacy by educating and engaging with consumers
What needs to happen is simple. Consumers need to be educated further with simple, straight to the point language, not more financial jargon. By people who are willing to sit with them through the journey, not opposite them with the latest commission generating product that has just hit their desk. Consumers need opportunities to engage with responsive educated professional groups who can give advice and fight for the client based on lessons learnt for themselves (not text books or sales manuals), with true sincere empathy for the client. Unfortunately, as learned in the Royal Commission, this empathy won’t always come from the Financial Planners operating within the various bank owned product manufacturing groups. In fact, it won’t come from those sections of the Financial Industry who are struggling to meet the modern basic educational requirements of the profession. The basics being a university degree. However, I am glad to say Cashel House will and can. As a privately-owned Family Office, we have zero ties to the big banks or their products, and act only for your best interest. Family Offices exist for this very reason, to act for one party, not the Accountant or Lawyer charging hourly fees, not the Insurance Broker selling insurance, not the Stock Broker raising money for companies. They exist for their clients. To protect the client’s wealth, to grow their lifestyle and to protect against conflicted interests. Cashel House is trusted by many families to protect their wealth. We organise their information so they can make accurate choices, not spend unnecessary hours briefing a myriad of providers that provide a single service without looking at our client’s overall picture. We are here to ensure people get straight forward advice that they can rely on that isn’t disclaimed to the point of uselessness. We look forward to 2019 and the opportunities that are afforded to all our current and prospective clients being inside a mutually beneficial family network.