There is a battle being waged at the moment for the trust and the confidence of the Australian public. It might be the financial planning industry’s first real test of professionalism, and it’s a test it cannot afford to fail.
When amendments to the Future of Financial Advice legislation become the topic of major newspaper editorials and dominate the letters pages, and are regularly featured on television, it’s fair to say it’s an issue that’s gone mainstream. The message that the public is receiving is simple and effective, and it is frightening.
The FoFA amendments might well address some of the so-called red-tape issues the original legislation created, but the public does not care – and should not be expected to care – about that. All they want to know is that a financial planner will in all cases and in all circumstances place the public interest first, act in the their best interests, and provide high quality, professional advice that is not conflicted by the way the planner is. It’s as simple as that. And it does not matter to them whether a planner works in a high-end boutique, an institutionally owned dealer group, a superannuation fund, an own-AFSL firm or in the High Street branch of a bank.
A professional face
It’s easy to say that’s a professional association’s role to tackle this issue, but there is confusion amongst planners as to what a professional association even is. There are a number of groups that claim that title but lack the substance to support it. Individual practitioners need to know exactly what a professional association is, and get squarely behind one that meets the criteria. By all means participate in other groups, but do not expect them to have a professionalism perspective on the issues that affect a planner’s occupation and livelihood.
A profession should thereby present a united face to the public, and be able to say without equivocation that the public interest and consumer protection are at the heart of what financial planning stands for. And it should declare, loudly and plainly, that anything – not just FoFA – that jeopardises either of these principles must be opposed vigorously by all professional practitioners. But it has been observed recently that the representation of financial planners appears fragmented, and therefore weakened.
Bad publicity
It wasn’t necessary to be even half-smart to see this coming. In January Professional Planner wrote that the industry would have to deal with the bad publicity that would arise from looking like it was opposing measures designed to improve consumer protection. The reaction was predictable and pointless and can be summarised as follows:
• I do not need the law to tell me how to treat my clients or how to behave as a professional.
• I always put my clients’ interests first.
• It is insulting to be told this by someone whose own occupation falls well short of being a profession itself.
No longer surprising
It’s perplexing, though it long ago ceased to be surprising, that so many still simply do not understand what being a professional means. They think it means wearing a nice suit, having a nice office, and just behaving like a professional – doing things like putting their clients’ interests first. But it’s not about you.
Being a professional means a hell of a lot more than that. If you cannot right now state clearly what those things are, and if you do not understand and believe in them with every fibre of your being, then you’re the major part of the problem. If you cannot take a genuinely professional perspective on this and lead, then get out of the way. Or just get out.
If you find it insulting to be told all this by the media, then that’s frankly too bad. Clearly, the message isn’t getting through by other means. It’s time to deal with the fire now before it becomes a conflagration that engulfs the entire industry – the good women and men as well as the bad – and sets back the cause of professionalism by years. That is, if it is not already going up in smoke.
