Thursday, August 04, 2011
Who thinks financial planning should be an industry? Or a profession?
The Financial Planning Association's (FPA) Mark Rantall kicked of his remarks with this question in an afternoon session at this week's Financial Services Council Conference.
Session attendees unanimously agreed it's a profession we're after, not a "financial planning industry".
Second only to medicine, said Rantall, is the importance of a strong financial planning profession. If you have your health, and your finances in order, you're in good shape he reasoned.
Key elements of a profession, says Rantall, include professional membership, rules around conduct, and accountability. On that note, from 2013 entry standards to the FPA will step up another notch.
Proof points supporting higher standards in these areas include the fact that recent research showed higher ethical reasoning among CFPs than other advisers.
Build it and they will come? Having built the framework for a profession, Rantall believes they (being planners) will come.
Rantall was clear on this: the FPA is, and will remain, the central professional body for financial advisers.
Colonial First State CEO Brian Bissaker focused on policy settings. The key reforms he reminded attendees of included:
- Increased fiduciary duty
- Ban on commissions and volume rebates
- Ban on soft dollar remuneration
- Increased training and minimum standards
- Increased ethical requirements
- Scaled advice changes
- Stronger Super
- New accountants licensing regime
A long and hard road but a journey worth taking, says Bissaker. In the heat of the debates Bissaker is concerned the totality of change might be missed. In particular he called out opt-in as being potentially a bridge too far at a time of great overall change in financial services.
Bissaker railed against government setting pricing mechanisms for planning, or any other professional service.
Community standards are increasing said Bissaker, and the risk of reputational damage looms large as a result.
Adviser versus adviser columns in media are not helpful he says. A more professional tone would be appropriate - suggesting advisers think about the greater good (overall reputation) and leave adversarial approaches in media at the door.
The end of the journey, according to Bissaker, will be when all universities offer financial planning degrees as part of their commerce faculty.
BlueChip Communication Group's Paul Cheal, Bruce Madden and Carden Calder are attending the Financial Services Council annual conference on the Gold Coast