Tuesday, 22 November 2011

The price of professionalism

 by Tony Vidler.

It has been fascinating watching and following some industry debate recently regarding the outcome of a recent court case against a NZ adviser.  

By all accounts the adviser had largely done the job expected of him, though the office paperwork was a bit footloose some years ago.  Then upshot was that a client sued, the adviser was partially found against, in essence (it seems) because his documentation didn't substantiate his recollection of the client instructions.  Nothing terribly surprising in all of that, and most NZ advisers if they were honest about it would say "there but for the grace of god, go I" at some point in their own careers.

What has been remarkable to hear and occasionally see in print is the ill-informed commentary from some other industry participants, who clearly do not recognize what professionalism is, or at what price it comes.

The adviser in question had a complaint laid against him with his professional association by the same client, in addition to the civil proceedings.  The professional body upheld that complaint also, for essentially the same reasons it seems - he hadn't followed the expected process.

Now the idiots enter the fray....bashing the professional body for upholding its own standards.  I note that most of the bashers do not actually appear to be members of the professional association, nor have any clear understanding of what the professional body holds its members to account for.  I note also that the adviser on the receiving end of the verdict (and subsequent public dissemination of it) made a public statement endorsing the actions of his professional association.  He went further by also publicly stating that he would remain a member for the duration of his career as he believed that strongly in the goals and aspirations of professionalism.  So, a ringing endorsement for the professional association by the affected professional.

He is a man of principles, integrity and strength of character it seems.

He is also a man who understands the price of professionalism.

There are many elements that must combine to eventually form a profession, one of which is the ability to self-regulate to high standards.  Regulate beyond the minimum standards of behavior prescribed by law, and apply the higher duties of care and objective process that is expected of a professional.  It follows then that the professional, who voluntarily subscribes to higher ethical standards than the law demands, is a person willing to pay a price for the betterment of society.

The NZ financial advisory industry largely does not understand what a profession is.  Apparently, many of today's advisers simply don't care about it either.  Those people have no future in the long term as financial advisers.  They may well have a future as product salespeople - but may just as well be selling cleaning products as financial products.

I would suggest that for those who value their existing businesses, and either want a future working within them or to exit at a healthy price, then some thought needs to go into whether they are willing to pay the price of becoming professional financial advisers, rather than mere sales people.  There is already sufficient critical mass inside the industry for the profession to evolve.  Perhaps 20% of the financial advisers out there are willing to pay a price for the privilege of becoming respected professionals in their field.  Those who will enter the industry in coming years with an eye on carving out long careers are already people motivated by professional ideals.  Perhaps one of the barriers to recruiting business successors is the very lack of professional standards and reputation by some of those advisers looking to exit in the short to medium term?

There are laws governing what medical professionals can and cannot do.  For example, it is illegal for them to willingly assist intentional suicide.  Whether one believe that is something society should allow or not is a moot point here.  Of relevance is that those professionals impose standards of behavior upon themselves that are higher duties of care than prescribed by law, and then police and enforce those standards themselves.  And the laws of the land also apply.

If as a profession they have sufficient doubt as to the merit of those standards, or laws pertaining to them, they debate vigorously and rigorously within until they find the right balance of ethics & legal standards, and consumer (or market) demands.  Paramount though, is what is best for the profession and its consumers.  Then the process is that they seek to change the rules relating to their entire profession within the boundaries of, and working with, the laws of the land as required.  If society wants euthanasia, and the medical profession collectively believe it to be beneficial to society, then they work to change the law relating to it.  In the meantime, despite their own belief as to what is right, they maintain standards internally that reflect the minimum expectations of the law at the very least.

The provision of financial advice within New Zealand remains an "industry" today.  It is evolving and moving down the path of professionalism slowly.  You can sense the momentum will accelerate in the next few years though, as more incumbents and new entrants understand what the price of being a professional is, and are willing to pay it.

Like this?  Then share it with others...or visit www.strictlybiz.co.nz for loads more useful and interesting information.

No comments: