Driving the low lifes out of the financial planning industry

Financial planners have a bad reputation, but there should be a distinction between 'proper' financial planners and the 'bottom dwellers', writes Michael Dale.

Financial planners are perceived as “scum-sucking bottom dwellers by some regulatory people”, my lawyer told me during a recent briefing.

Scum-sucking bottom dwellers? That’s a bit harsh, isn’t it?

I mean, what is a scum-sucking bottom dweller anyway? Obviously, it’s not a term of endearment. I Googled it, and of the many definitions which appeared, none applied to any financial planners I know.

Whoever created the term in the first place deserves great credit. I mean, it really is a lovely turn of phrase, rolling off the tongue so easily.

One does need a vivid imagination to visualise a scum-sucking bottom dweller. How could anyone have such a low opinion of financial planners?

It seems that the lines of clarification have become somewhat blurred between ‘proper’ financial planners and some new form of low-life in our profession predisposed to engaging in lying, cheating, deceit and chicanery.

Hasn’t it been said somewhere that there is nothing new under the sun? These kinds of creatures have always, and will always, exist.

There needs to be clear points of clarification so there can be no confusion in telling one from the other.

Money attracts more than its fair share of cheats and liars, so it’s natural for people (particularly those who don’t understand how professional and ethical financial planners help their clients) to assume that there are more scum-sucking bottom dwellers in and around the financial services industry than most other industries.

Unlike most professions where hanging out a shingle promoting a service is restricted by law to those who meet strict criteria (such as doctors, dentists, solicitors and engineers) the opposite applies to financial planners. Individuals with little experience and minimal qualifications are able to call themselves financial planners.

Because of this, ‘proper’ financial planners can end up being tarred with the same brush as scum-sucking bottom dwellers.

Restricting the term ‘financial planner’ to those who meet strict criteria may at least help to clarify to all and sundry what a ‘proper’ financial planner does, and the enormous value they add to the community.

The financial planners with whom I’m acquainted, and in particular those I work alongside each day, are all people I would call ‘proper’ financial planners. Integrity is something that comes naturally to ‘proper’ planners.

They are upright and conscientious citizens who are beyond reproach and instinctively act in the very best interests of their clients.

So, for those who are not aware of what financial planners do, the role is very easy to describe.

It is simply an ongoing role with complete transparency and disclosure carried out to benefit the client, in which the ‘proper’ planner understands the lifestyle their clients are trying to achieve, asks questions to clearly define their financial objectives, advises them on how to achieve these objectives and assists them to implement the recommendations.

As time goes by and circumstances change, the ‘proper’ financial planner listens to the wants, needs, requirements, wishes and concerns of the client.

The ‘proper’ planner gives quality advice, recommends quality investments and implements appropriate strategies. 

As a result, trust develops — and the client is aware that they are dealing with a ‘proper’ financial planner who intuitively puts their interests first.

Together, the client and the ‘proper’ planner travel down the accumulation and cash flow road, which has many twists, turns, valleys and mountains — along with the occasional avalanche.

It could be said that the greatest value the ‘proper’ financial planner adds to the client’s world is the advice that results in stopping the client from making investment mistakes triggered by emotion and the constant noise from outside influences — during both good and bad times.

The title ‘financial planner’ should be reserved and restricted to only those who are ‘proper’ planners, with the lines of clarification clearly defined to avoid confusion.

However, the scum-sucking bottom dweller label is too good a description to be simply discarded and should be reserved solely for low-lives. They, brazen as ever, will forever pop up somewhere, maybe with a change of name here or there.

The right kind of recognition for dastardly deeds should be the mandatory award of the scum-sucking bottom dweller designation. Maybe some enterprising body could purchase the scum-sucking bottom dweller copyright and create some form of accreditation for these low-lives.

Meanwhile, the ‘proper’ financial planners can walk with their heads held high, secure in the knowledge that the service they provide is truly worthwhile.

Michael Dale is a financial adviser at Fiducian Financial Services.