Melinda Houghton’s initiative to counter negative public perceptions of financial planners is admirable. But does Houghton’s “Positivity for Planners” campaign seek to treat the symptoms before the disease has been properly addressed?
The last couple of years have seen the financial planning industry cop a larger than usual amount of negative press. Some of this may be unwarranted, but much of it is justified.
For instance, few could sensibly argue against the merits of the Senate inquiry into Commonwealth Financial Planning (CFPL) and the Australian Securities and Investment Commission (ASIC). Certainly, the media exposure of these large scale, high profile events captured public attention in a way that financial planning rarely does.
As a result, many truly professional financial planners who always strive to serve their clients’ best interests are unfairly judged by some consumers. However, many financial planners – some with decades of experience – believe the increased scrutiny will ultimately be a good thing for the industry.
So when news emerged earlier this week of a campaign to bolster financial planners’ collective reputations, mobilised by Aon Hewitt-aligned practice Houghton Financial Planning, Professional Planner greeted it with some skepticism.
Crowd funding
Practice principal Houghton has launched a new crowd-funding initiative, despite being unsuccessful in an earlier Kickstarter campaign. The first questions are: what is the point of the crowd-funding campaign? And what is the money actually needed for?
“We need the finance for the professional production of marketing material and copywriting,” Houghton says. She explains the campaign is aimed at generating positive stories for financial planners, rather than a consumer targeted approach.
Another obvious question, and one central to the overall approach of Houghton’s campaign, is: does it attempt to gloss over the problems?
“We’re leaving the problem of addressing these to the professional associations,” Houghton says, referring to the Association of Financial Advisers (AFA) and the Financial Planning Association (FPA).
While Houghton emphasises the campaign is not about brushing aside the real issues, it’s hard to see how it can achieve the aim of telling good stories about the industries without itself becoming just another kind of spin.
Bad news sells
It’s certainly true that, particularly in much of the mainstream media, both print and online, bad news is viewed as more compelling than good news. Perhaps this is partly a result of non-specialist media outlets over-simplifying issues so the broader general public can understand. Or maybe it runs to broader philosophical questions around the human appetite for gory details.
But no amount of fluffy good news stories about how much financial adviser W saved client X, or how happy client Y is with the long-term service received from planner Z, can change the fact that the industry needs to change.
This is happening, but it is a gradual process, and it is being driven by a combination of factors, including the Future of Financial Advice (FoFA) legislation. The Financial System Inquiry (FSI) is the broadest-ranging, most comprehensive studies of Australia’s financial sector in decades; and the recent Parliamentary Joint Commission’s inquiry into professional standards, ethics and education is the most comprehensive report of its type – ever.
Effective fixes
Sure, reports and inquiries are uncovering a lot of dirt, and this is uncomfortable for anyone involved in the industry. However, by dragging these issues into the light, the industry is finding constructive and effective ways to fix them.
The life insurance sector is also undergoing intense structural scrutiny, particularly the way advisers are remunerated.
Again, it’s a case of short-term pain for long-term gain.
Houghton says, “financial planning is a new profession”, and says she believes this is part of the reason why people don’t hear the good news stories.
Even though financial planning hasn’t yet earned the right to call itself a profession, real significant progress towards this goal is being made.
But trying to counter bad press by pumping out good news stories from inside the industry misses the point and attempts to short-circuit the process of meaningful, long-term change and growth.
