It is essential that the actuary in this situation should have the support of his or her professional body and fellow actuaries – so, for example, the client cannot simply appoint a less scrupulous alternative adviser.
The basis for this support is a professional code of conduct, which is underpinned by a formal disciplinary scheme to address breaches of the code of conduct or formal complaints.
Although Australian law contains many formal references to actuaries and their work, particularly in financial services, the machinery of the code of conduct and the disciplinary process is independent of the legal framework. It is a mark of a profession that its members are expected to operate at a higher level of ethical behaviour than that merely prescribed by law. Furthermore, the policing of this higher standard is enforced by the members themselves and is not reliant on external regulatory bodies.
In all of this, the actuary’s responsibility is to the members of the relevant institution (that is, the life company or pension fund), not to the board or executive that appointed the actuary. The value of the profession to society is therefore that individuals directly affected by actuarial advice can rely on and trust that the advice is in their best interests.
PRACTICAL IMPLICATIONS
One of the conclusions following on from this example of the actuarial profession is that it is not sufficient to leave the policing of professional standards to the regulatory authorities. The professional planner must operate to standards that go beyond the law and into the realms of ethical behaviour if the users of these services are to gain the same level of trust that extends to the established professions.
Moreover, true professionalism goes beyond clearing the qualification hurdle and complying with continuing professional development requirements. The lifeblood of a profession depends upon the intellectual contributions of its members, in education, research and administration. The actuarial profession was built on a foundation of mathematical and scientific methodology that emerged during the European “Enlightenment” period of the eighteenth century. Francis Bacon is widely credited as being the first to articulate what eventually became the modern empirical “scientific method”. He was also a practical man, and deserves to have the last word:
“He that gives good advice, builds with one hand; he that gives good counsel and example, builds with both; but he that gives good admonition and bad example, builds with one hand and pulls down with the other.”
Bill Buttler is a principal of Rice Warner Actuaries – www.ricewarner.com
