Single, and loving it.

 by Tony Vidler.

I'd best let you down gently right at the beginning - this is not a gleeful little tale of a single persons interesting life. It is about the possibility of one type of "singledom" for an industry, that can result in more people loving it.

With all the change and raising of standards in financial services in recent years there is a mood that finally financial advice is becoming a profession in NZ. When you drill down into the reasons why people think that is so it becomes obvious that there is a wide range of views on precisely what a profession is.  It seems to be a bit like the Yeti....no-one has actually seen it, and everyone has a slightly different mental picture of what it might look like, yet everyone agrees that they'll know it when they see it.

This begs the question:  How will we know when financial advice has become a profession?

The answer is "when consumers believe it to be".  That may be many years after a profession has actually been created though - attaining market acceptance and associated prestige only happens after the high standards have been adopted and demonstrated continually and unfailingly.

We should acknowledge (and to a degree be pleased with) the fact that in the last 10 years the industry has evolved incredibly swiftly.  In the last 3 years the rate of change and elevation of advice quality, ethical behaviors and fiduciary standards has been remarkable.  Big ticks to everyone involved for that. It is premature for us to claim professional status on an industry wide basis however.   While full professional status has not been achieved yet, the shape and form of the profession IS becoming clearly visible.  That in itself is progress.  But is it yet enough?

Of the many definitions of a profession that one can find, I quite like this:

"A profession is a vocation founded on specialized educational training, the purpose of which is to provide disinterested counsel and service to others, for a direct and definite compensation, wholly apart from expectation of other business gain. This definition implies that, for a profession to be recognized as a profession, it first must be organized within a professional body".

This comes from a paper entitled "The Professions in Society", by Clare Bellis (a senior lecturer in actuarial studies).

If this is correct as I believe it to be, then clearly the industry still has further evolution to work through. Consider the key points, and then assess them against our world today.

Specialized educational training.  Well, to be a profession clearly this area cannot be something which is voluntary.  It is a "ticket to the game".  Everyone has to be at the same standard to be allowed entry to the profession.  We aren't there yet in NZ.

Disinterested counsel. Let's not even go here yet....but as an industry we remain some distance away from universally providing disinterested counsel to all comers.  In time, many issues surrounding potential conflicts, contrasting remuneration models, blatantly vested self-interest - all have to be addressed, and removed or resolved.

Direct & Definite Compensation.  Hhhhm....another one we maybe shouldn't go near yet.  Definitely cannot tick this box as an industry though.  Too closely tied to the "disinterested counsel" issue I'm afraid.

Organized within a professional body.  Aaaah, one of my soap box issues!  How can any profession have a multitude of "professional body's"?  Surely if it is truly a professional body then it exists for the entire profession.  The same standards of behavior, ethical standards, practice standards, educational expectations and so on would apply equally if it is genuinely a "profession".  Once again, in NZ we cannot tick this box at this time.

Yet this last item is the one box that the industry could tick if it chose to.  It is within the control of the industry itself.  Of the 4 core elements to becoming a profession there is one clear path forward - organizing a single professional body.  Any adviser who cares about their professional standing, aspires to have a valuable business in years to come, and wants to contribute to creating better results for consumers generally should be working within their own spheres of influence to bring this cohesion to the industry. 

It makes no sense to leave your own professional standing and brand entirely in the hands of other people.

It makes enormous sense though to work towards "singledom" as an industry.  There is not one adviser out there who wouldn't love it if they were held in full professional regard by the community - even those consumers who had never met the adviser, but respected them simply because of their profession.  Get the industry single, and (folks) loving it.


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