Australia is ahead of many developed markets when it comes to the education of its financial planners, according to CFA Institute managing director, Asia Pacific, Paul Smith.
It is in the interest of the Chartered Financial Analyst (CFA) community for financial planning to become a recognised profession, said Smith – and he acknowledged the role of the Future of Financial Advice reforms to that end.
The CFA Institute is rolling out a new program called Claritas for middle- and -back office financial services staff, which will provide a basic financial education with an ethics component at its core.
"We hope this will go some way towards helping the financial services industry re-gear itself and restore trust. What is incontrovertible is that our industry is banging along the bottom in terms of its standing with the general public and our clients," Smith said.
All members of the financial services industry have been dragged down by the "general malaise" that occurred over the last generation, he said.
While people at "the top" of the industry would continue to command extraordinary salaries, there is no question that compensation is declining across the industry, Smith said.
"The biggest pressure is coming from declining profit margins due in part to the global financial crisis, which has led to this period of extremely low interest rates which makes it difficult for most financial services businesses to make much money," he said.
He suggested that declining compensation levels within financial services were partly down to an "ethical rebalancing of the books", with pressure being exerted by shareholders.
But ethics is not only an issue for the finance industry, Smith added.
"Wherever you look in the world, we have become a very self-centred, driven society. And that's not good, because at the end of the day we're living in a very crowded planet with resource constraints.
"If we're to manage [the planet] successfully for future generations, we've got to learn to look at some broader goals," Smith said.
