“And I was a bit sceptical of that, of whether there was genuine support for this or whether arguably the Government was using this as leverage for change and the regulation.”
Klipin agrees and says that advisers “are not well understood by politicians”.
“[Thus] one of the roles of an association is to absolutely put that on the table, front and centre; and next time there’s change, be in a position where we’re actually owning the change rather than it being imposed.
“If you take a different profession, let’s say the medical profession, and the Government wanted to change policy on the practice of how medicos operate, their first port of call would be to go to the AMA, because it’s the medical association.
“Professional bodies therefore become partners with Government and regulators to build and develop and implement policy,” Klipin says.
“When there’s an absence of that, then the Government feels that it has the right or an obligation to step in and make decisions with or without the partnership of the professional bodies.
“I think when you look at the failures of Storm and Opes Prime, and the output of the Ripoll committee, clearly the Government felt that they needed to make a decision and needed to step in.
“That doesn’t mean that they get carte blanche; and the lobbying activities, of certainly the AFA and other organisations, is ultimately about best outcomes for the community.
“It’s also, in a sense, the rallying cry that advisers need to stand together and assert their collective value.”
According to Professor Justin O’Brien’s “Accountable strategy model”, in a true utopian professional environment, a government supports a profession by giving it control over its own destiny.
Sanders says the “holy grail” is where “a profession has been supported by the Government if it has low specificity of accountable activity – so it doesn’t tell you what to do”.
“It also gives you high autonomy as an independent agent so you can control yourself, because they trust you to do so,” he says.
“That’s utopia and frankly, there are very few professions [with that autonomy]; and arguably, in most Western societies, we’re moving further and further away from this in all communities.
“Law, medicine, everybody is becoming increasingly regulated – so this utopia perspective is not really achievable anymore,” Sanders says.
“But when I look at FoFA and assess the measures and proposals…it shows quite clearly that we’re at the complete opposite end of the spectrum.
“The Government is very concerned about what we do, how we do it, when we do it, how we charge for it.”
Sanders believes FoFA has ultimately undermined the relationship between a professional and their profession.
“It’s not at all supportive of the concept of account- able space, norms and standards.
“Even when it comes to the idea of standards, the Government said,‘Well, actually we’re going to create those standards through an advisory panel’ – so arguably, they’re going to take power away from professional communities and centralise this somehow in ASIC.
“It’s clearly not a positive step for professions.”
LET’S GET PROFESSIONAL
The FPA has a strategy in place, which began with the rollout of a restructuring and a multi-million dollar rebranding program at last November’s national conference. Sanders says that one of the biggest challenges the FPA faces is how to actually fix the current membership situation, “because we can’t keep ratcheting [up] standards and keep screaming louder and louder about standards, because all that does is disenfranchise the people that you want to bring with you”.
“We learnt quite painfully that we have a problem getting our members to believe in each other – we had to start telling our members that they are inside the circle,” he says.
He says the “roadblocks to professionalisation” are the key issues they need to resolve in order to get there.
“The first roadblock is this issue of improving collective readiness – [so] improving the professional community’s view of the professional community [by] instilling members with confidence in their colleagues,” Sanders says.
“The second issue is influencing the view of Government. This is a bit contentious, because some will argue that what we should be focusing on is influencing the view of the community.
“But the community comes along with the Government, and I think the Government is disingenuous when it pretends it’s listening to the community.
“So we want to focus on Government, because if we get Government change, we get community change. If we get Government saying positive things, we get community responding to those positive things.
“The last thing is the immovable context. The media, the market, the competition, the public views of [the] profession.”
The AFA is focused on encouraging and supporting the next generation of financial advisers. Klipin believes narrowing the gap between the new and older generations is what it will take for the industry to become a profession.
“There is a disparity between the Gen Xs who are coming in [and the older planners],” he says.
“[Gen X] tend to be under 40, they have university degrees and qualifications, they’re very professional and very capable.
“What they need is life experience and consumer experience because the role of an adviser is very much [about] taking people on a journey.
“That’s contrasted with the more experienced generation who are probably 50-plus and they came out of a totally different world when they started their careers.
