Path to professionalism: Ethics and technical theory have built the foundation

Building a profession with a foundation in ethics and technical theory helped reinvent financial advice into a profession, according to research.

In academic research published in the International Journal of Economics and Financial Issues, Neilson and Co managing director Ben Neilson quantified the internal change in perception of the advice industry.

The research titled ‘Progress towards Recognised Professional Status: The Australian Financial Planning Landscape in 2022’ established four key professional attributes: ethical responsibility, social responsibility, professional authority and a base of theory that are the building blocks to professionalism.

Neilson tells Professional Planner he sought to track growth towards all attributes towards professional recognition.

“The evidence of the research rationalises the change which has been quite difficult for us for the last five or six years,” Neilson says. “We begin to see why. All that change we had to go through really changed our business and mindsets but now we’re beginning to see why.”

The paper underscores Quality of Advice Review lead Michelle Levy’s proposals which rely on the professional stature of advisers to help determine ‘good advice’.

Neilson commenced the study because there has been little systemic research done to track progress within the financial planning sector in Australia.

The research sought to provide a framework for identifying professional attributes and benchmark existing positions of progress.

The result of the study is the suggestion that financial advisers hold professional authority which is derived from industry knowledge and trust.

He compared the landscape in 2009, relying on 1,093 responses in 2022.

“When we reach professional stature a lot of things we have to do will be non-existent because there is that recognition,” Neilson says. “At the moment, we are forced to jump through so many hoops because it’s not recognised but as soon as we get there it should be easier to be an adviser in Australia.”