The point was that no matter how sound a risk plan you formulate as an organisation, unless you acknowledge the company is made up of human beings and allow for their engagement, reaction to and acceptance of the program, it is unlikely to be a success.
It got me thinking about how regulators of the industry continue to ignore the human element when it comes to the legislative boundaries they impose on the financial services sector as a whole.
A classic case in point is some of the recent changes to the superannuation rules, in particular the changes to the contributions caps.
In the 2009 federal budget the contributions caps were halved, meaning additional contributions to super now had to be made earlier in order to ensure an individual would have an adequate level of retirement savings in future years.
On the surface this would seem to perhaps be an effective method of engaging individuals to take an interest in their super at an earlier age.
This approach totally ignores reality whereby people only address an issue when it becomes immediate to them.
In this case, no matter what the powers that be do, individuals will always be looking for that last balance boost or top-up kicker as they begin to approach retirement and not a minute sooner.
It means changes like those made last year are doomed to failure from the start and need examining.
Financial advisers aren’t immune in this process either. The longevity lifeblood of any business is to have continual business coming through the door and that should translate into servicing different generations of clients.
However, generation Y, which in some way should form part of the future plans of advisory practices, still remains a largely untapped client source.
Again this is potentially due to the fact no-one is making a big effort to walk in their shoes to find out how they behave and to establish what the really important issues are for them.
Certainly one of the misnomers about financial planning is that it is all about wealth creation and members of generation Y feel they have no wealth to create.
It follows that they would feel absolutely no need to employ the services of a financial planner.
But it’s not all about wealth creation; it’s really about prudent financial management as much as anything else and this is relevant for everyone.
Of course, financial management includes debt management, something this group needs desperately.
Better communication of this concept needs to be implemented as well as more effective mediums to get the message out.
So no matter which part of the financial services industry it may be taking into account, human behaviour is a crucial element to success.
If this can be achieved, it should make for better outcomes for all concerned.
