The deputy chair of the Australian Securities and Investments Commission, Peter Kell, has predicted that financial planning will achieve its ambition of becoming a profession faster than other occupations have managed as legislative reform is implemented and given a chance to start working.
Kell told attendees at Professional Planner’s 10th birthday celebration in Sydney on Monday that implemented and pending legislative changes will also benefit from “the sort of robust but balanced scrutiny and discussion you get in Professional Planner”.
“After all, Professional Planner has always been a voice in the industry that encourages, and I think at times even inspires, its audience to think beyond their immediate self-interest, to take a less reactive view of the changes that are necessary on the journey to a profession, and to look at the interests of the client they are serving and not just their own interests,” he said. “Professional Planner has done a great job in taking that sort of approach.”
Kell said it took the medical profession more than 80 years from the establishment of the British Medical Association until its practitioners were demonstrably doing more good than harm to their patients.
“I am very, very confident that we will reach a robust degree of professionalism in Australia before such time has elapsed,” he said.
Kell said the implementation of the Future of Financial Advice (FoFA) reforms has addressed the issues of conflicted remuneration and has required financial planners to prioritise the interests of clients.
The financial advisers register (FAR) now has 25,000 names on it, and “that’s a healthy industry”, Kell said. He said the register had been searched 2 million times, suggesting that there are “many, many people out there who want to look for advice”.
In addition, reforms to life insurance advice “are ultimately going to improve standards in that area”.
“And there are the professional and ethical standards that have been announced, and FASEA, the new Financial Adviser Standards and Ethics Authority, is now up and running,” Kell said. “It will be, I think, a very important step forward when we see those professional standards in place.”
He said there is also legislative reform on the way “ensuring that financial product designers, manufacturers and distributors are “responsible for ensuring the client gets the right sort of product and advice”.
ASIC has “more extensive banning powers on the way, and higher penalties,” he explained.
He said any of these reforms are still to be implemented and should be given time to work.
“But as a package, they will help reshape the industry, especially when combined with the leadership of those planners who are already committed to higher standards – the leadership of the people in this room,” he said.
The chair of ANZ Banking Group, David Gonski, said a 10th birthday is an apposite moment for individuals in the financial planning industry to reflect upon the good they do. He said striving to attain a higher degree of professionalism reflects the environment in which the financial services industry operates and he said two statements stand out for him as examples of how times have changed.
“The first was by a man called Lord Hambro, whose business was a bit older than 10 years,” Gonski said. “He said an unleveraged balance sheet was a wasted and lazy balance sheet.
“And the second [statement] was from my client, Kerry Packer, who against my advice and the advice of the present prime minister, went into the Senate and when asked about those who pay tax described them as idiots.”
Gonski said that, 40 years ago, both statements were “actually seen as correct at the time. How we’ve changed, how we’ve started to think more generally about life, how we seek to be more professional.”
He said he gets from Professional Planner “the feeling that they are aspiring and inspiring us in the financial industry to be professional, that they’re inspiring us and aspiring us [to remember] that we do [in fact] do good things, that we do help people, and we should never forget it”.
“And so my message is to simply say, it is a great honour to be here; it is a great honour to salute something that made us a bit more professional. Knowing many of you…you do, and you deserve to remember occasionally, maybe on a 10th birthday, how much good you’ve done.”