Last November, Professional Planner turned 10. Conexus Financial threw a birthday party, at which I gave a speech reflecting on how the publication had developed over a decade. As I put together the notes for that speech, I realised two things: the reasons PP was set up in 2007 are as valid and important today as they were then; and my time with the publication is up.
It’s time to move on and leave the development of the magazine, its website and associated events to a new team of people, with their own ideas and ways of doing things. They’ll do great things with it.
When I started at Professional Planner, I wanted nothing less than to see financial planning develop into a profession. But I wanted to make sure our readers understood what that would mean, what it would require them to do personally, and how it could affect the businesses many of them own and manage. I couldn’t see any point in sugarcoating it.
Ten years down the track, although financial planning is often referred to as a profession, it still isn’t one yet. It is closer, and it has the potential to be a great one, because it is difficult to think of many other occupations that can directly affect so many lives in such a proactive and positive way.
We all recognise the pace and volume of change in legislation, regulation, and professional, ethical and education standards – the whole box and dice – that has taken place since 2007, and there’s little point in rehashing any of that here. It’s clearly been the dominant theme of a decade, and it’s done much of the required heavy lifting in terms of restructuring the industry, identifying and banning certain types of behaviour and remuneration, and putting individuals on notice that they must act at all times in the client’s best interests. But legislation will get you only so far, and as has often been said, you cannot legislate a profession into existence.
The decade of accountability
If regulation was the theme of the last 10 years, then accountability might be the theme of the next 10. So in the last thing I write for Professional Planner, at least in my capacity as editor-at-large, I thought it worth reflecting a little on the level of personal accountability and courage that’s going to be required from individuals – and has already been shown by many – as the industry continues to professionalise. While the law states that financial planners must act in their clients’ best interests, a profession acts first and foremost in the public interest.
Being a professional means you commit to upholding high standards of behaviour, education and ethics for yourself, and that’s hard enough. But it also means you sign up to hold your peers and colleagues accountable to the same high standards, including acting in the public interest, first and foremost. That’s the really tricky bit. It’s not enough for you to see to your own behaviour and standards but turn a blind eye to others’.
Over the last 10 years, if advisers generally had taken more responsibility for insisting their colleagues and peers upheld high professional and ethical standards, even if they’d simply acted more often in their clients’ best interests, the industry’s reputation might not have been so badly tarnished. What’s that got to do with me, you’re thinking? It’s got everything to do with you.
Every time an adviser is banned, ejected from the industry, appears on A Current Affair or is in some other way highlighted as having damaged clients or broken the law, it diminishes every other adviser as well. Don’t let them get away with it. If you see something, say something.
You can take it to them directly and encourage them to do better. You can take it to the regulator. Or you can use mechanisms that already exist, including through the Financial Planning Association (FPA), to have someone independent and impartial take it up with them. If you won’t take the standards of your peers and colleagues seriously, then you can’t expect the public to do it either.
Of course, not only individual advisers need to be monitored. Shoddy supervision and poor compliance standards from so-called licensees of last resort also need to be addressed. You know who they are and there’s a professional responsibility to straighten them out. You can’t pretend it’s not your problem.
So-called professional associations need to be held accountable, too. If an association isn’t explicit in advancing the public interest and insisting that its members meet high ethical and professional standards, in other words, if it’s a ‘members-first’ association, then it’s worthless in the context of professionalism.
If you take the view that individual accountability and acting in the public interest are foundations of a professional community, then it’s a short leap from there to supporting individual professional registration or accreditation for financial planners, potentially removing the Australian Securities and Investments Commission from its licensing role and abolishing the licensee entity in its current form.
When you do that you finally, once and for all, cut product manufacturers out of the picture. No longer can banks shelter shoddy advisers, or use financial planners as glorified product salespeople. No longer can perverse incentives and sales targets compromise clients’ best interests when each adviser becomes individually responsible and accountable for their actions.
It’s not for everyone
When the discussion turns to personal and professional accountability for individual advisers, and when the pace of change is as rapid as it is now, it can feel like the world is out to get you.
Raising standards across an entire industry inevitably causes uncertainty and upheaval. Right now, there’s considerable uncertainty around education standards for existing advisers. But good minds and good people are working on it, and good solutions will emerge. The financial planning community is nothing if not creative and resilient. The entire debate is really about what will best serve the Australian public.
I believe, from observing the financial planning industry and its varied and colourful practitioners and personalities over the last 30 years, most intensely over the last 10, that professionalism is attainable if there’s the collective will to do it and the collective acceptance of what it’s going to take. You can choose to be part of that or not. You can choose to contribute to that or not.
If you opt in, then you, like every one of your peers and colleagues, will be expected to think and behave like a leader of the profession, to be accountable for your own actions and the actions of those around you. If that’s not for you, then so be it, no hard feelings. But you, like I, need to recognise when your time is up.
