Financial advisers need to knuckle down and commit to lifelong learning if they want to be viewed as professionals and trusted by their clients, according to a former bank boss.
Speaking to ifa, CFA Institute managing director for Asia Pacific Nick Pollard said helping the financial advice industry become a profession is at the heart of his work at the CFA Institute.
“The key components of that are around trust and transparency and putting your customer first. They’re around competence, technical competence. And they are about being willing to commit to lifelong learning, which is one of the core characteristics of our charter holders around the world,” he said.
While the former Coutts boss admits that some advisers will find these tasks easier than others, he says it is vital for them to happen if the industry is to shake off its commission-based sales perception and join other professions like accounting and law.
In Australia, educational reforms and ethical standards in financial advice have become politicised in recent years. The introduction of FOFA was a politically-driven agenda that in many ways fortified the beginning of the journey towards professionalism in advice. Today, it’s the FASEA reforms that are politically charged and creating confusion among advisers.
But Mr Pollard sees ongoing learning as a critical step to building trust with clients, not just a box-ticking exercise to appease regulators.
“We are entering an era where the voice of the customer will be key. If your organisation isn’t one that resonates with what customers want, then it will be very difficult to be in business going forward,” he said.
“If you try to think of financial services and investment advice as a profession, then you have to commit to lifelong learning. It would be very unusual if you went to a doctor who had finished training 40 years ago and not learned anything since.
“We seem to think that’s OK in the financial world and it isn’t. So, I think setting high standards and allowing people to demonstrate their competence is a pre-requisite to building trust and professionalism in the industry.”
Australia is now in the top five nations in the world for CFA Institute candidates. Mr Pollard is currently in Australia for the CFA Institute Research Challenge, an annual global competition that provides university students with hands-on mentoring and intensive training in financial analysis and professional ethics.
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