During an interview late last year, the term “the year of professionalism” was used in relation to 2016. The more I’ve thought about it since then, the more the phrase seems appropriate and timely.
Let’s here and now declare 2016 to be The Year of Professionalism.
In coming weeks and months we’ll see the foundation for a financial planning profession set by legislation.
We’ll see how the so-called standards body will be constituted, and who will be appointed to it. We’ll also see the work this body does on developing a single code of ethics for all financial planners; and the work it does on developing further the minimum education standards for both new and incumbent financial planners.
Both of these things are absolutely central to how financial planning will develop, and they have to be done correctly.
For the record, Professional Planner believes the standards body must be headed by someone who is independent and independently minded, and other representatives must bring to it a clear commitment to creating a profession that first and foremost serves the public interest – not the interests of institutions
or financial planning businesses; the code of ethics must not dilute the code already developed by the Financial Planning Association (although it’s fine to build upon it); and the minimum education standards must not undo the comprehensive and high-quality work already done by the Financial Planning Education Council.
Outside of government, we’ll see the associations that represent financial planners continuing to lead their members towards standards of professionalism that exceed the lowest common denominator requirements set by law. And they’ll start to explain to the public why members of a professional association are genuinely different from financial planners who are not.
And for our part, among the other things that we’ll be focusing on in 2016 is tackling head-on an issue that remains a serious impediment to financial planning being taken seriously as a profession: asset-based fees.
If a profession should be free from conflicts then it should be free from all conflicts. Asset-based fees remain a blight on a fledgling profession – a remnant of the industry’s past that is both inconsistent with pretensions of professionalism and, frankly, just unnecessary.
These are big issues, but this is the year when it could all finally come together.
