“Our aim is for the SMSF Specialist Advisors and SMSF Auditor to be the adviser of choice for all consumers when they are needing advice on SMSFs or high-net-wealth [issues],” she says.
While legislation and regulation can certainly support professions, Slattery says: “If you don’t have an interest in professionals being professional and achieving professionalism, then you can’t build a profession.”
“Professionalism has to come from people,” she says.
“It has to come from leading, from the development of standards and the consumer knowing where to go for the best possible advice.
“That’s what we’re aiming for.”
THE ISSUE IS PROFESSIONALISM
According to Klipin, calling the financial planning industry a profession at this stage would be jumping the gun.
“We’re a work in process frankly,” he says.
He says the AFA is in the process of lifting standards – so until advice is “seen in the eyes of consumers as a critical and valued service”, the title should not be used.
Sanders says the FPA assumed that one path to becoming a profession was to be tougher in its approach, which resulted in a revised code – firstly in 2007, then officially in 2009.
“[We] started telling people that they’ve got to respond to the code and we’re going to be prosecuting more [but] what that actually did was have an interesting consequence on the marketplace because people started to get angry with us rather than be positive.
“And that was a bit surprising… because we said,‘Hang on, we’re lifting standards, we’re raising the bar – that’s all meant to make you feel better’.”
Sanders says the majority believe that “the more you tell us we’ve got to do things, the more we think you’re telling us we’re not professional”.
Other professions have evolved from activities that have existed for millennia – medicine, for example, has a history dating back to the third millennium BC in Egyptian times. No profession ever sprang forth fully formed; they got there gradually, over time. Financial planning cannot transform itself into a profession overnight. As an industry it has existed only a matter of decades.
Klipin says the reason it hasn’t reached a professional level is “a longevity issue”.
“Arguably, one of the reasons that we have FoFA [Future of Financial Advice] is that the profession has not yet reached a mature enough state to set its own standards, to regulate its entire marketplace and to expel or exit or discipline members who don’t display the right behaviour,” he says.
“You look at it in the legal world, the accounting world, the medical world – those systems are well and truly advanced.
“This is an issue of not intent but one of maturity, or immaturity, in terms of the use [by the public] of the financial advisory profession.”
Klipin says the financial advice associations are making steady progress to be “the thing that associations need to be, which is a very clear membership body with a very clear voice, very clear standards and a very clear education pathway”.
“I think all of us are somewhere on that journey, but we’ve got examples before us in other professions that have been doing it 50, 100 years longer than we have, and there’s a benchmark there.”
THE FUNCTION AND ROLE OF A PROFESSIONAL ASSOCIATION
According to AFA’s Klipin, a professional association embodies a number of key criteria.
“One is that it obviously represents its members,” he says.
“They have a very clear membership offer and articulate very clearly who their members are.
“You then also have a series of codes and standards – so a code of ethics and a code of behaviour – in the expectation that members apply and adhere to that behaviour.”
Clearly, a professional association must also offer professional development and education.
“That’s around both the setting of standards and lifting the ambitions of people to think of learning and development as a lifelong activity and a lifelong pursuit,” Klipin says.
“And then I think it’s got an obligation and responsibility to focus on the best practice capability within its membership, and that’s about identifying them, providing info and research [and] showcasing the talent.
“The final component is [that] associations are in fact communities and there’s a very strong community aspect in bringing like-minded colleagues and peers who do the same job day in and day out to learn together, to network together and to basically give life to what is that community.”
While Klipin regards these criteria as the core of a professional association, even the AFA cannot tick all the boxes just yet.
“I think the entire financial adviser profession space is a work in progress,” he says.
“We’ve evolved from a cottage industry heading to a profession. That journey is probably 15, 20 years maybe at best.
“We can see where we’re heading, but we’re very young in that process. Across the financial adviser association spectrum, some of those things are done extremely well, some of them are a work in progress, some of them are hitting the radar and obviously, the whole FoFA reform package is going to accelerate the development of all that.”
For the FPA’s Sanders, disregarding industry perceptions of what a professional association should look like was necessary. Instead, the FPA relied on academic research and evidence to find out what structures were in place in existing professions.
“I was brought on four-and-a-half years ago to essentially challenge the structure of the organisation in terms of how we become a profession,” Sanders says.
