Internal disagreement impeding professionalisation
Disagreement on uniform professional standards from within the financial services industry due to various impediments led to Government intervention and legislation on professional standards and education, according to a professional standards body.
Professional Standards Authority (PSA) chief executive, Deen Sanders told the 2017 SMSF Association Conference in Melbourne last week that significant internal and external barriers and lack of consensus on professional standards from within the industry led to the professional standards legislation passing in both houses of Parliament recently.
"We've got to chop down some of those impediments because when we left it to the industry side it wasn't progressing at the rate it was considered appropriate," Sanders said. According to a 2014 PSA whitepaper, 'Professionalisation of financial services', the main internal barriers to professionalisation included the culture of the industry, cost, and industry resistance, while external impediments included regulatory barriers, the government and the Australian Securities and Investments Commission (ASIC).
"[The big challenge] in our space is how we navigate the partnerships in regulation both within industry but also within regulators. We've heard from the TPB [Tax Practitioners Board] and ASIC [earlier in the conference] about some of those disconnects," Sanders said.
"Getting agreements in terms of regulatory barriers, getting agreement from government, getting agreement from ASIC and getting agreement on standards will be a significant removal of barriers to having professionalism."
While he had heard from others in the conference that terms like professionalism, integrity, and trust were elusive, ambiguous terms that defied explanation, Sanders argued they were not elusive in the least.
"They're objective, they're real, and they're entirely about things that you can do but I think it's a great danger for them to say that they're somehow magic words that are difficult to apply.
"We want to be respected and valued by the people that we work with, the people we serve, the people outside of our business," Sanders said, adding becoming professionalised would enhance consumer perception about the value and credibility of an adviser.
This was especially important as the 2017 Edelman Trust Barometer showed that while 47 per cent of clients placed more trust and faith in a person like themselves in 2009, this had increased to 63 per cent in 2016, while 67 per cent trusted a technical expert.
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