It’s been a few weeks since legislation setting out new professional, educational and ethical standards of financial planners passed both houses of Parliament and became law. Any day now, we’ll start to learn who has made it onto the board of the much-vaunted standards body that will oversee the creation, development and implementation of the new standards. It may not be a pretty sight.
Professional Planner understands that a so-called consensus group of board candidates, drawn up by the industry’s various stakeholders, contains only four or possibly five names.
Irrespective of whether it’s four or five, it means that only about half of the standards body’s board positions will be filled by candidates who have the full and unequivocal support of the entire industry. The remaining four or five positions – including, it is suggested, the chair – will therefore be compromise candidates, to a greater or lesser extent. Someone, somewhere, will object to these appointments.
It’s appropriate that the Minister for Revenue and Financial Services, Kelly O’Dwyer, should consult widely and extensively. And it’s understood that nominations – including those who nominated themselves – numbered something like 100. But the minister and Treasury face an almost impossible task trying bring the parties together. It speaks volumes about the fissures, fractures and vested interests that continue to cleave the financial planning industry that its key stakeholders apparently came up with fewer than half a dozen names on which they all agreed. Turf wars and personality clashes could be fatal to the standards body as it begins the onerous task of winning support for its upcoming work.
It is difficult to believe, and deeply disheartening, that arguably the single most important entity ever to be created in financial planning could start its life hobbled, or at least without the full-blooded support of every significant industry participant.
The names that Professional Planner has heard have made the consensus list are without exception top-drawer individuals, with the right blend of experience, gravitas and skill to lead the standards body competently and impartially. And it’s possible that the prescribed composition of the board – practitioners, a consumer rep, an academic, an ethicist – as well as gender-balance issues and the like, have made the selection process more protracted. But it’s pretty likely that there are a few more than four or five individuals in the industry that fit the required bill.
Let’s make no mistake. Getting the standards body right is critical. Nothing else that follows – education standards, professional standards, ethical standards – will mean nearly as much if the work of the standards body is not carried out at the highest level, and with the greatest possible support of the industry.
The body also cannot be captured by industry. Overstock the board with, for example, banking industry representatives (current or former), and its credibility will be shot.
The benefits that would flow to all participants in financial panning if the public begins to trust and respect its practitioners would far outweigh any personal or organisational gain that might flow from short-term politicking. Is it too much to hope that the warring factions bury the hatchet and get behind the standards body? Let’s hope not. But don’t hold your breath.
TOPICS: Kelly O'Dwyer, standards body, standards body board appointees