There will be a superannuation business that will need to be bigger and lower cost than it is today; scale, George says, will clearly be vital.
There will be a more prominent role for AMP’s small bank; George sees a big opportunity to grow a small digital-based bank into a much bigger prospect, not unlike what Macquarie Group has been able to do.
There will be a platforms business that may also be larger; George suggests AMP is likely to take a look at Westpac’s Panorama platforms business, should it come up for sale.
And yes, there will be an advice business. But there, George’s view of the future is a little more hazy.
“I vehemently believe advice is so important for consumers in Australia. And I think good advice is the difference between a great retirement and an OK retirement. But as an industry, we’ve got to get that model right and I don’t think we have it right yet.”
George isn’t alone in this view. IOOF chief executive Renato Mota is similarly searching for the answer to what financial advice looks like in a post-Hayne world.
“I think the current model is a binary model, where you pay a very large fee and you get everything or you pay nothing and get nothing,” Mota says.
“There is no question the value of advice and certainly all the research we’ve done and other organisations in this room have done, demonstrates the value of advice for those who get it. But too, for too many. It’s just not accessible or attainable. I think there’s a tremendous opportunity to change that.”
The question, of course, is how.
Post-Hayne policy shifts have meant financial advisers need to be much more qualified than in the past, but this has raised the entry cost of advice for a basic financial plan to $5,500. And as George says, many mums and dads simply aren’t prepared to pay that much.
Using technology to help automate parts of the advice process has been seen as a possible solution and George floated this on Monday, albeit without much in the way of detail.
Mota says the solution is less about the creation of a product and more about how to structure conversations with people about what he calls their financial well-being.
A couple in the suburbs with a mortgage and insurance might be best served starting with a conversation about cashflow management for example: how much do they spend, how much can they save? Technology may help with that conversation, but it also may not require a licensed financial planner.
The next step along the pathway might be a form of financial coaching; not holistic advice, but something that allows an individual to get a sense of their financial position and the next set of things they need to think about – insurance, basic estate planning and savings goals might also be examples.
Mota’s point is that a graduated approach is vital.
“Yeah, you don’t wake up one morning and go from not understanding anything to wanting to spend $5,000 with a financial adviser,” Mota says. “I think a glide path allows them to dip their toe in the water as opposed to jumping off the 10-metre diving board is something that we will benefit from.”
How regulatory settings might need to adjust is an interesting question. Currently, personal and general advice need to be separated; may this need to change? It’s one of the many fascinating questions Treasury’s Quality of Advice will need to tackle next year.