Plenty of people will get through their lives and enjoy a long, financially secure and dignified retirement without ever seeing a financial planner. It is also true that there are more people who could benefit from advice and financial planning services than currently do.
But whether the number can or should double, or whatever, is debatable – and it’s also debatable whether that’s what the industry really wants anyway. On current evidence there is a section of the industry that is quite happy for financial planning to remain a backwater, shunned by the public, mistrusted by government and regulators and for it to continue to be the whipping boy of the media.
If you wanted to undermine public confidence in any occupation and ensure that people continue to avoid it as being untrustworthy and self-interested, there are a few ways you could go about it.
You could ignite a dispute between two groups of members of an association that at least notionally represents a profession, and have that dispute play out in full public view. That’s a really good way to convey the message that the association’s membership is divided against itself. And the actions of a minority imply that the majority of members are mindless stooges willing to act against the interests of the public. Top marks to the strategic genius that came up with that one.
Or you could call on financial planners to resign from associations that at least on the face of it are prepared to stand up for the public interest, and suggest that they instead join an association that by its own admission exists to advance the commercial interests of its own members. This one certainly ticks the self-interest box. Further, you could suggest that the other associations exist only to serve the interest of the big end of town, and then you’d tick the mistrust box as well.
A culture of denial?
Two reasons for the public to continue to shun financial planners, wrapped up in one harebrained idea. At least that’s value for the membership fee. This idea also ticks the self-destruction box, if you stop for a moment to consider upcoming legislative reforms.
There are other examples where the actions of some are undermining the collective desire of the financial planning community to advance towards professionalism.
When you sift through the underlying reasons for their actions, you quite often encounter a culture of denial. The psychology of denial is a fascinating area of study, and probably an issue for another day. But suffice to say, it often arises when an individual is forced to confront an idea or a concept that contradicts or confounds an established belief or worldview. They’re not necessarily being deceptive or misleading in their views; they simply can’t reconcile them against what they hold to be true.
Combating denial is a complex issue as well; but it requires the other side to advance better counter arguments, and to argue for them forcefully. It requires the majority to agree – and to say that they agree – that denying the need for reform of life insurance and other aspects of advice must stop. To agree that there is a real and pressing need for the financial planning community to stand behind proposed changes to education, professional and ethical standards. To agree it’s an opportunity to embrace change and to send a clear message to the public that the industry is serious about this stuff. And it requires agreement to support these issues consistently in public and in private – and to support both the letter and the spirit of the legislation.
You’ve got another think coming
Being a good person, having years of experience and treating your clients well – which really means not actively defrauding them – are all well and good but if that’s all you think it takes for financial planning to win public respect then you’ve climbed on board the wrong train.
If you think that financial planning can be a profession and still not be organised into properly-constituted professional associations, then you’re flying in the face of mountains of literature, academic research and actual real-world practice.
If you think a professional association can operate with the financial support of the industry whose products the association’s members sell, then you misunderstand what a professional association is.
Likewise, if you think a professional association should exist to protect is members own narrow, selfish commercial interests, you’re living in the dark ages.
There are plenty of people who will get through their lives and enjoy a long, financially secure and dignified retirement without ever seeing a financial planner. It would be a tragedy if anyone who could benefit from a financial planner’s services chooses not to because of mistrust or a belief that the industry continues to be self-serving and internally conflicted.
