Ann: Investor presentation - IOOF FY 2018 results, page-147

I may be wrong in my prognosis. I've been wrong before (once before, if I remember correctly, ha ha ha)

Sorry, I’m a bit slow today, which one was that?

However I feel there is something unique about the financial advise business. It is a business that depends crucially on trust, and that trust is crucially dependent on real and percieved independence.

What's more, there is generally a lop-sided nature to the relationship. The receiver of the advise being generally much less resourced/savvy than the provider.

You’ve made two good points here, which can actually be synthesised into one. The most basic conflict of interest I see, when it comes to paid financial advice, is that the best financial advice that can be given is for customers to become financially literate enough, so they won’t need to pay an external adviser anymore.

No professional adviser has an incentive to recommend that, of course, because they work for profit and they want their customers to come back. In fact, they also (understandably) want to maximise their profits, which creates a constant trade-off between what is best for them and what is best for their customers.

This inherent contradiction is never going to go away, unless financial advice becomes a not-for-profit activity only, which doesn’t sound like a great idea to me. What I see as being more reasonable is that professional advisers will continue to have a degree of self-interest (best if within a robust regulatory framework), the average person will continue to have an aversion to becoming financially literate (as it has always been the case), and therefore paid financial advice will continue to be required, accepting the fact that there is a degree of conflict of interest inherent to this profession.

This applies irrespective of the RC, FOFA and everything else, wouldn't you agree?