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One of the founders of the financial planning industry has given it the equivalent of an E grade for its performance over the past 10 years, describing its efforts as pathetic.
Graham Rich, who was instrumental in establishing financial planning in New Zealand, told the Financial Planners and Investment Advisers Conference in Auckland last week that the advisory industry has been "pathetic".
"As far as the advisory industry is concerned, in New Zealand it has been pathetic.
"In my view the advisory industry in New Zealand has failed to influence New Zealanders anything like what the potential has been," he says.
Rich's criticism isn't restricted to advisers: it extends to product providers such as funds management and life insurance companies.
Of the investment savings and insurance industry he says: "it's just as pathetic as the industry association for advisers."
Rich says the advisory, funds and life industries fail to co-operate and work together. In some cases the product providers sit on the sideline and don't participate in the issues. Also they have failed to learn from their foreign counterparts.
Rich says blaming the environment, such as a lack of compulsion or tax incentives, isn't a good enough excuse for failing.
He's also critical of the leadership of the industry: "The leadership within those two groups (advisory and funds management) is poor. For some reason we fail to grasp the opportunities which are in front of us."
Yet, Rich warns that the changes of the past 10 years are nothing compared to what lies ahead for the financial services industry.
"The Internet is the single biggest challenge that the industry faces. That will reshape the value proposition that every single one of us faces with determining," he says.
"Overall my challenge is that the funds industry, the life insurance industry, the financial advisory industry in a net sense has not done a good job in the last 10 years, not created the kind of results that should be being created from the kind of brain power and energy and billions of dollars of resources that are here (at the conference) could bring together and achieve if we wanted to achieve."
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