When I entered the accounting profession three decades ago, it was the preserve of middle-aged white males, conservative politics and the old school tie. I remember being expected to disclose my religion and school in order to win a graduate position at one of the big eight accounting firms in Sydney. And the cleanliness of my black lace-up Oxford-style business shoes (not brogues) was also a matter of considerable significance to the interviewer.
Comedian John Cleese reinforced this unattractive image of accountants in his description of them as “appallingly dull, unimaginative, timid, lacking initiative, spineless, easily dominated, no sense of humour, tedious company, irrepressibly awful … and whereas in most professions these characteristics would be considerable drawbacks, in chartered accountancy, they’re a positive boon.”
While unkind observers might suggest that the personality traits of chartered accountants haven’t changed all that much, there is no doubt that the professional and business environment has changed a great deal. I was reminded of this when I received (circa 1985) an unusual letter from my professional body, the Institute of Chartered Accountants, about the future of our profession. The letter informed me that the accounting profession had entered a new world of technology, marketing and economic policy, in which we would become chief executives, entrepreneurs and thought leaders.
As a result, the letter claimed, traditional professional partnerships were finished. These would be replaced by multi-disciplinary consulting businesses. They would be built on the modern concepts of profitability and return on equity, rather than the quaint notion previous generations adopted of engaging in a trusted professional vocation in the public interest, irrespective of commercial reward. We were told that if we didn’t “get with the program” we would be left behind, reduced by the end of the 20th century to low-value bookkeepers and compliance officers.
It’s hardly surprising that the accounting profession jumped onto the 1980s bandwagon. Those were the days in which powerful and compelling forces of deregulation, securitisation, free markets and globalisation were transforming much of the world. Societies became economies and economics faculties became business schools. And it was into this securitised free-market environment that the aspiring profession we now know as financial planning was born.
One of the strongest political supporters of this ideology was UK prime minister Margaret Thatcher, who famously declared: “I think we’ve been through a period where too many people have been given to understand that if they have a problem, it’s the government’s job to cope with it. ‘I have a problem, I’ll get a grant.’ ‘I’m homeless, the government must house me.’ They’re casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then also to look after our neighbour. People have got the entitlements too much in mind, without the obligations. There’s no such thing as entitlement, unless someone has first met an obligation.”
Over the following decades, the dominance of these ideas, often referred to as economic rationalism or neo-liberalism was assured. Australian academic Michael Pusey describes economic rationalism as a dogma that argues “markets and money can always do everything better than governments, bureaucracies and the law. There’s no point in political debate because all this just generates more insoluble conflicts. Forget about history and forget about national identity, culture and society. Don’t even think about public policy, national goals or nation-building. It’s all futile. Just get out of the way and let prices and market forces deliver their own economically rational solution.”
This view of the world was channelled by corporate cowboy Gordon Gekko, played by Michael Douglas, in the 1987 film Wall Street: “Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed, in all of its forms – greed for life, for money, for love, knowledge – has marked the upward surge of mankind and greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.”
An improper role
So pervasive has been the influence of this ideology, especially in the Anglosphere, that many professional designations have taken on the characteristics of product brands. This has coincided with the employment in professional associations of marketing managers and customer service specialists, many of whom apply their considerable expertise in the promotion of consumer products to the selling and protection of professional designations as though they are brands of soap powder.
As a result, the focus of many professional associations has turned to image, membership retention and growth at the cost of their traditional emphasis on the articulation and enforcement of professional and ethical standards. The problem with this approach is that it leads to the conclusion that the reputation and commercial value of a professional designation must be protected and upheld, right or wrong, rather than to the conclusion that the public interest must be protected and upheld, even to the detriment of the commercial interests of association members whose behaviour has been found wanting.
This misunderstanding of the proper role of professions in society has also led to the expectation amongst members that their associations exist principally to protect and enhance their commercial interests in a free market (as would a lobby group), rather than to protect the public interest in society as a whole. I was surprised to observe this confusion in the documents supporting the creation of Chartered Accountants Australia and New Zealand (formerly the Institute of Chartered Accountants), in which the following statement appeared: “Our aspiration is for the new Institute to be recognised as the leading trans-Tasman voice for business.” The danger here is that by taking on the attributes of a vested-interests lobby group, the public will conclude that chartered accountants are hypocritical and untrustworthy. I suspect many financial planners already think that.
At the heart of any true profession must be its members’ duty to society. This is often called our duty to protect the public interest. It is a higher duty than our duty to act in our clients’ (or our employer’s) best interests and it must always receive priority in the ordering of our duties as professionals.
Simon Longstaff, executive director of the Ethics Centre, explained it this way: “The point should be made that to act in the spirit of public service at least implies that one will seek to promote or preserve the public interest. A person who claimed to move in a spirit of public service while harming the public interest could be open to the charge of insincerity or of failing to comprehend what his or her professional commitments really amounted to in practice … If the idea of a profession is to have any significance, then it must hinge on this notion that professionals make a bargain with society in which they promise conscientiously to serve the public interest, even if to do so may, at times, be at their own expense. In return, society allocates certain privileges. These might include the right to engage in self-regulation, the exclusive right to perform particular functions and special status.”
We risk being devalued
Given this unique and privileged role in society, it follows that when aspiring professions such as financial planning choose to become involved in thought leadership and the development of public policy, our commentary must not be primarily motivated by a desire to engage in a public relations exercise or a brand management campaign. Furthermore, we should never allow commercially motivated pressure from vested interests to dictate our conclusions.
Sadly, we have seen the latter occur in recent years in our industry’s compromised and misguided attitude toward the development of ethical and professional standards. In that regard, professional associations often refer to the importance of “balancing stakeholders’ interests” when, in truth, all they are seeking to do is maintain the commercial status quo of powerful members (or a section of powerful members). I accept that avoiding commercial pressures is not always easy, especially when they are sourced from our own profession. However, unless we do so, our members, government, the media and, most importantly, the public whose interests we are privileged to serve, will devalue or ignore our contributions to important debates in which our profession’s voice should be heard and respected – and they will ultimately mistrust and devalue our advice.
Therefore, as we grow and evolve the profession of financial planning we must defend without fear or favour the fundamental ethical principles on which any true profession is built: namely trust, integrity, objectivity, conflict avoidance (not mere disclosure), technical competence, due care, confidentiality, professional behaviour and uncompromising support of the public interest. Of course, as individual financial planners, we are obliged to make important contributions to our clients’ wealth and financial independence, but that must never be at the expense of our overarching responsibility as a profession to create a fairer and more equitable society for all citizens.