Academics back advice profession over occupation

11 February 2019

The industry cannot afford to continue treating financial planning and advice services as an occupation entirely defined by market transactions, according to academics from Swinburne University.

The academics, Dr Chistina Neesham and Dr Reza Tajaddini said if some people knew more about financial planning than others, this did not give them a licence to take advantage of other people’s savings.

“There must be a social contract, and financial planning should be treated as a profession,” they said. “This means financial planning services are not just a way of trading knowledge: these services have higher aims and responsibilities too. They have a public interest to protect.”

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The pair said that just as doctors were expected to contribute their expertise to the health of patients and the community, planners and advisers were also expected to engage their knowledge for securing the financial health of their clients’ investments and, ultimately, the financial health of the economy.

“Now more than ever, ethics is at the centre of financial planning education, laying the foundations for a strong culture of professionalism in the industry,” they said.

“Everything is falling into place for a strong and healthy ethics regime in Australia: we now have legislated standards, a government authority (FASEA) mandated to develop a professional code of ethics, and clear criteria for licensing financial planning services and practices through formal education.”

“Education plays a vital, central role in transforming financial planning into a true profession. Ethics should be embedded in all programs, from single units to postgraduate courses. It is essential that graduates are able to make ethical and responsible decisions that contribute to a sustainable society now and into the future, encouraged by experiential learning, creative problem solving and interactive teaching approaches.”

“Now more than ever, professional financial planners and advisors require advanced soft skills, such as interpersonal communication, decision making and conflict management. To be able to act with integrity and act in the clients’ best interest, while upholding the public interest, they need to first understand client priorities, develop empathy, and communicate effectively to solve problems and build trust.”

“Today’s universities play a crucial role by embracing ethics in their financial planning curriculum. This is a critical space where students learn how to live together, in mutual respect and harmony, with people who hold different (and even conflicting) values. Universities’ programs should engage students with industry and guide them towards building satisfying careers in the financial planning profession. High emphasis on ethics, people skills and interactive and practice oriented pedagogical approaches is more important now than ever.”

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The academics are coming out of the woodwork because they can see research grants and many dollars in course fees coming their way....this is the way Universities survive, prosper and build their is all about the dollars coming in.
They are running a business and selling their services...plain and simple.

Now there's academics under the bed.

Now there's academics under the bed.

Agent86 Financial planning will never be a profession as it is not based on science. Financial Planning currently is the process of putting on a blind fold and throwing a dart on a dart board hoping for the best. Remember economics is not a science. Get a real job!!!! Get a profession. Do not blame the academics for your lack of intelligence

A profession is not defined by having science as its base. Take law - clearly regards itself a profession - but marginally based on science. There is scientific applications used in economics.
Here's a bit of a definition:
1. Person formally certified by a professional body of belonging to a specific profession by virtue of having completed a required course of studies and/or practice. And whose competence can usually be measured against an established set of standards.
2. Person who has achieved an acclaimed level of proficiency in a calling or trade. See also professionalism.
But I do agree with your emphasis. Financial advice can be a profession but has a way to go in changing attitudes within the industry.

Regrettably hard to see the financial advisors joining the professional ranks given the screaming protests over the proposed education requirements, the opposition by the industry's professional bodies, the inhouse employment arrangements, the opposition to professional indemnity insurance and the rest, unwillingness to let go of trailing commissions instead of service fees, etc. A pity because independent professional financial advisors are a good thing for citizens (generally speaking).

Hedware, you stated "inhouse employment arrangements". Are you taking about conflicted advice delivered via inter fund advice and funded by charging every single member and delivering the advice to only a few as is the model of Industry Super?

As I have always said - I'm after independent professional financial planners (and I know a number that do this very well). I'm not too familiar what happens in industry super funds but if it is as you say then I agree with you.

The ethical lessons should be given to the middle and upper management of the banks and the other large institutions. It is them that have poisoned the industry. Financial planning was, and never will be, suited to a corporatised setting. It was the clowns within the management ranks who designed and enforced a culture of dog eat dog selling. The financial planners in most cases were dragooned into going along with such morally bankrupted concepts.

It will never be a profession whilst the main Industry Associations (FPA) get payments from bodies that have appeared before a Royal Commission and those Associations call those companies Professional Partners helping to shape the future of Financial Advice.

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