Does getting clear definitions of Professionalism for financial services really matter?
If your doctor’s practice received financial support from the drug companies she recommended, would you view that as professional?
If you knew your accountant’s business would be bought for a guaranteed sum by the firm providing them with their investment products, would you change your mind about their professionalism?
If you found out that the mortgage broker your accountant recommended paid a 25% introduction fee back to your accountant, would you consider that professional?
If you learned that part of your original home loan costs funded a never-ending payment to the guy who originally arranged your loan, would you think that was professional?
Can real estate agents and car salespeople accept commissions on their sales and still be considered professionals?
Is it professional if financial advisers get paid more as investment markets rise? (And is it professional if they get paid less as investment markets fall?)
Would it be considered professional if my doctor sought higher fees as my health increased due to the benefits of the exercise regime she recommended?
Is my plumber, garbage collector, cleaner a professional?
Professionalism is like quality – you know it when you see it and you notice it when it’s not there.
Defining it is tricky.
Professionalism has boundaries. When these boundaries are transgressed, there should be consequences.
But as Professionalism means different things to different people, it’s important to properly frame up the definition of Professionalism and how it might apply to financial services.
And it’s critical that the definition of Professionalism be agreed and understood by both the adviser and the client.
Otherwise what often results is a disappointed client saying they didn’t receive the level of Professionalism they expected – they believe their adviser wasn’t acting professionally while their adviser fully believes that they were acting professionally.
So I think clarifying what Professionalism means for financial advisers does matter. The next three blog posts will also examine the question from different perspectives – advice propositions, industry change, and the “greater good”.
What do you think?
Image courtesy of Arvind Balaraman / FreeDigitalPhotos.net
About Jim Stackpool
For nearly 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. As founder of Certainty Advice Group, he leads a like-minded team of professional advisory firms seeking to create greater certainty for their clients. As an author, blogger, columnist, and keynote speaker, Jim is regularly called upon for his professional insights into the advice industry. His latest book Seeking Certainty is available now.