Financial advisers have been reminded to consider the changes around education and professional standards from a consumer perspective instead of considering what benefit they will get personally from meeting the new standards.
Speaking as part of a panel, discussing the professionalism of financial advisers, at the Financial Services Council Summit 2019 in Sydney, Financial Adviser Standards and Ethics Authority (FASEA) chief executive Stephen Glenfield said professions were marked by key characteristics that should be present in financial advice.
Glenfield said a profession was a group of people who shared an ethical standard while also having a body of knowledge derived from training and education, and worked towards the interests of the people they served.
He said this model had been applied to the FASEA standards and education pathways and consumers should expect these things will have an impact on financial advice practitioners.
“If we think about where the FASEA standards will take us over the transition period and if we look at a consumer seeking advice from an adviser at the end of the transition period, they will know that an adviser has met a minimum level of education,” he said.
“If it is a new adviser, then they will have spent time under the guidance of an experienced and good adviser to learn practical skills and they will demonstrate an ability through the adviser’s exam to apply that practical knowledge.
“The adviser will also be committed to continual development and doing all these things under a legislative code of ethics that drives them to acting in the interest of clients they are serving, and that, from a consumer view, has to be a really good thing.”
Australian Unity advice executive general manager Matt Brown, who was also on the panel, said advisers needed to reassess what being a professional meant and check their motivations in meeting the new standards.
“We have been striving to be known as a profession for about 10 years and what has been missed is what being a profession means. Instead we have focused on the regulations and the guardrails in and around advice, but have lost sight of what a professional is and what it means to be a profession,” Brown said.
“We have to stop asking why we are on a journey to professionalism and when we do, a more fundamental question comes in which is: ‘Why do we want to be known as a profession?’
“If we want to be known as a profession for some form of self-interest – it makes us feel better or gives us some form of recognition which increases trust and gets more business in the door – that view is flawed. If the purpose is for the concept of social well-being or a greater good, and we provide disinterested advice to all people, then we are on the right track to what it means to be a profession.”