Practice Management

Planners are central to better standards

Advisers must be proactive on their journey to professionalism and realise their position as community advocates as they engaged the clients of tomorrow and restored confidence in the sector, a standards body has said.

Professional Standards Authority chief executive Dr Deen Sanders told the SMSF Association 2017 National Conference in Melbourne today that “conflicted loyalties” and excessive “regulatory burdens” were two key factors that jointly contributed to a systemic failure in the professionalisation of the financial services sector.

But the industry was adapting and as more financial services firms reshaped their relationship with the Australian public, the federal government’s incoming professional standards legislation for advisers would be a catalyst for “a new dynamic” in the delivery of advice, he added.

“Professions bring something quite powerful to individuals – we all want to be respected and valued by the people that we serve,” Sanders said.

“But they are not just about the people they serve, they are also about the people that serve in them.”

Sanders explored the meaning of trust in the context of being an SMSF professional and the changing landscape for SMSF advisers in light of the new professional standards legislation in 2019.

He said advisers should look to learn from the “2017 Edelman Trust Barometer Report”, which highlighted declining levels of public trust in government officials and regulators.

“Between 2009 and 2016, things have changed in our perceptions of trust, and the growth of trust in experts has been slower than growth of trust in opinion … we are seeing a real transformation of trust in terms of who we seek advice from,” Sanders said.

This meant that advisers needed to ensure they were tailoring their conversations to ensure they were engaging with clients in a “humanised” fashion, particularly in a sector where both government and regulatory bodies were increasingly being viewed with scepticism, he added.

“Professionalism, integrity and trust … are not elusive at all. [They] are absolutely measurable … there is a great danger in assuming that they are complicated concepts that can’t be quantified and don’t apply,” Sanders said.

“We know that human beings are designed to trust but … the real question then is: what stops the trusting, what is the blockage in our engagement with clients and how do we shift the policy settings in this particular space [to] fix this?”

The comments followed the passage of the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 last week, which set out degree requirements for industry entrants, while existing advisers would be allowed up to two years to pass a transitional exam and five years to meet the new educational requirements.

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