Natural Selection

Originally published | 03/02/2019

As the father of evolution theory, Charles Darwin once said that “It is not the strongest of the species that survives, not the most intelligent that survives. It is the one that is the most adaptable to change.”

If you have been in our industry for more than five minutes, I am sure you can relate to this.

However, rather than becoming adaptable and embracing change, the financial services media and some advisers would have you think that our industry is in a free fall and that there is no evolution.

Every time there are changes to legislation, we see the media and the doomsayers espousing how the end is nigh.

We witnessed it when FSR came in, we witnessed it when FoFA came in and we are witnessing it now with both the Education Reforms and the soon to be released Royal Commission into Banking Report.

All Legislative change to me is like natural selection.

Natural selection is the differential survival and reproduction of individuals due to differences in phenotype (which is is the composite of an organism’s observable characteristics or traits, including its morphology or physical form and structure; its developmental processes).

That’s what Legislation change does. It shows us what our developmental processes are and we are strong enough to evolve to the next level in the chain.

For example, you could spend your time worrying that because education standards are being strengthened, or that because of past sins, our industry needs tighter reforms, that the end is coming and that the average mums and dads will never be able to get advice again, or, you could look at it as an opportunity and decide how you can do better and be better and how to thrive in the change. As Einstein said “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.”

Let’s look at a couple of changes and potential changes;

1. Education reforms. The change to education requirements is, in my opinion, overdue. Unfortunately, I have witnessed over my 9 years running risk and compliance, advisers that should not be advising and only did a weekend course to become RG146 compliant. They have relied on selling products rather than providing solid advice over the last 15 years. For most advisers, the most they will have to do is 6 subjects of a graduate diploma to meet the new requirements. That’s six subjects over 5 years. Not that difficult in my opinion. Simply put “Education is the most powerful weapon which you can use to change the world.” (Nelson Mandela)

2. Changing rem structures. This has been happening since FoFA came in and will only be an extension of that. We will probably see grandfathering come to an end and may even see changes to being able to charge on an asset under management basis. Once again, only my opinion, but the old asset-based way of generating revenue is a tad lazy. You need to be able to prove your value to your clients. Asset based fees hide this ability.

Remember in the long history of our industry, those who learned to collaborate and improvise most effectively have prevailed.

Finally remember this – “You can’t stop the future; you can’t rewind the past. The only way to learn the secret…is to press play.” (Jay Asher)

Embrace the change and run the evolutionary race.


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