Assessing professionalism in the financial advice industry
A University of Southern Queensland study has attempted to measure the progress made towards achieving recognised professional status within the Australian financial planning sector.
Compared to an industry, which could be driven by self-interest and low ethical responsibility, the study ventured into whether financial planning reflected a recognised profession that was in the spirit of public service, with a regulatory body of professional authority, high understanding of best interest, and a legal obligation to uphold public and ethical responsibilities.
This was done through a survey of over 1,000 advisers primarily located in Queensland, NSW, and Victoria, and compared with data from another similar study in 2009.
The UniSQ study found that, compared to a decade ago, advisers today show greater awareness of professional authority and their social responsibility, and have made significant strides in improving ethical responsibility.
There had been a considerable change in avoidance of conflicts of interest and remuneration declaration as well.
“Responses to education, client focus, remuneration, ethical direction and conflicts each showed significant mean increase. Approach to ethical responsibility allow actions to align in accordance with their professional obligations and meet their ethical expectations,” the study reported.
“Financial advisers now show significant confidence in their ability to navigate ethical areas and can rely on their code of ethics to determine conduct as a basis for navigation and decision making.”
There was more emphasis on education today, with over 80% of respondents advocating for the adviser exam.
The majority (86%) were also members of professional associations. 66% believed such memberships added value to levels of professionalism.
The report highlighted, “Survey results indicate that financial advisers are becoming more familiar with the value of accessing their body of theory. All acknowledged the increasing importance of theory, levels of education and continuing professional development reflecting that most believe a systematic body of theory is an imperative ingredient of professionalism.”
According to these findings, financial planning was slowly evolving into a recognised profession, with recent regulation reflecting the professional status of financial advisers, similar to other conventional professions like doctors and lawyers.
“It is imperative that Australian financial advisers, offering professional input, commit to being involved in shaping the professional policies, governance, processes, so that financial planning becomes a true profession run by advisers, like other established professions run theirs,” the study concluded.
AUTHOR
Rhea Nath
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This is satisfying good news. Financial planners have been through a period of considerable change and adaption. but the advances are now to be seen and hopefully more gains will be realised with a stronger body overseeing professional standards and conduct and showing peer leadership. Thankfully some of the attempts to water down professional standards, such as excusing some planners from passing exams, came to nought.
The big test is a survey of clients and actual clients as to their opinion of the current standing of financial planners and advisors. I think there is still quite a journey to lift the financial planning profession in their eyes, but the results of this study underwrite the profession.
"Thankfully some of the attempts to water down professional standards, such as excusing some planners from passing exams, came to nought." Mate, have you read Michelle Levy's views and recommendations - looks to me she is well aware Product Providers are not capable of much in the way of standards for delivering personal advice - so it appears she has given them a complete pass.