The road to professionalism never did run smooth

Daniel Brammall, the Independent Financial Advisers Association of Australia’s (IFAAA) president, says the conversation around the future of financial planning has evolved since the organisation launched in 2010.

“It’s no longer a conversation solely about independence, but a bigger conversation about professionalism,” he says.

Brammall is talking ahead of the IFAAA’s national symposium in Brisbane on October 28, which is focussing on the drive towards professionalism in the financial advice industry.

The symposium will feature speakers on professionalism, including the chief executive officer of the Professional Standards Council, Dr Deen Sanders, and the past president of the Royal Australian College of General Practitioners, Dr Claire Jackson.

Brammall says that independence is the first and biggest step, without which ‘professionalisation’ of the industry isn’t possible.

Gold, gold, gold for Australia

“Without that foundation – a Gold Standard of Independence as your platform – I don’t think the industry has a chance to professionalise.”

The symposium will explore just what it really means to be a professional, independent financial adviser.

Brammall says that when planners become truly independent and divorce themselves from transactions, it raises the question – what is it we do? What does a professional financial adviser actually do?

In Brammall’s view, they become strategic advisers.

“You’re a source of consulting knowledge; the interaction is one of trusted adviser,” he says.

That role includes raising issues that “might not be top of mind for clients,” and less emphasis on exciting issues like Brexit and commodity price crashes.

“These world events are absorbing headlines but beyond the control of our clients,” Brammall says. “There are issues that clients can do something about, like preparing for the accommodation needs of their 70-year-old parents and dealing with the complex area of sibling interaction over succession issues.”

“These are enormous opportunities for the independent financial professional [to] add value,” he adds.

Brammall says symposium attendees will “walk away with new ideas of where they can take their practice, get new clients, and look after existing clients in a way they hadn’t even thought of – that don’t require hiring five new paraplanners or buying new software”.

Aside from an exploration of what it means to be recognised as a professional, the symposium will be a chance for members to reflect on where the IFAAA has come in its six years of existence.

‘Constrained’ ability to effect change

Reflecting on the reasons for the birth of the IFAAA back in 2010, Brammall says at the time the existing industry associations were promoting to the public that financial planning was a good idea. But those organisations existed principally to advance the interests of their members.

“The overwhelming majority of those members were perfectly content to operate with big conflicts of interest,” Brammall says.

“By contrast the IFAAA was formed in the public interest – to educate the public and advisers on the value of independent financial advice,” he adds. “The other associations’ ability to effect change is constrained by their membership who are still largely associated with insurers and banks.”

Since its inception in 2010, has the IFAAA made progress in achieving its mission?

“Absolutely,” Brammall says. “The Gold Standard of Independence exists now and the public is well aware of it. So are advisers.”

The future is bright

But in addition to the chance to reflect on the role of an independent, professional financial adviser and the IFAAA’s achievements, the symposium will also be a celebration.

Brammall says the future is bright both for financial planning and for the advice-seeking public.

“Our members are the early adopters of something that is inevitable. It has its own momentum now,” he says. “And these guys and gals aren’t just advocates, they’re evangelists. They’re really inspiring and it’s a reminder of why we do what we do.”

“I asked a new applicant the other day who had been practising financial planning for over 15 years why she now wanted to become a member of the association and she said ‘I don’t like having to answer the question: are you acting in your clients’ interests? I mean, of course I am’. But being able to say that she practices the Gold Standard of Independence – the hallmark of a professional – means she doesn’t have to have that conversation anymore.”