There are parallels between resistance to cultural change in police departments and the current transformation the advice industry is going through, according to one industry body.
In a recent blog post, Profession of Independent Financial Advisers president Daniel Brammall said the recent Black Lives Matter protests that had begun in the US after the death of Minneapolis resident George Floyd could be seen as “a reaction to a character flaw that is allowed to persist in the profession of law enforcement”.
“People make mistakes. That’s a fact of life and we as humans need to forgive mistakes because everybody makes them,” Mr Brammall said.
“But we should only forgive mistakes where the person who makes the mistake (a) takes responsibility for it, and (b) learns from it so that the mistake isn’t repeated.”
Mr Brammall suggested anger at the behaviour of police sparked by the protests was not dissimilar to current consumer distrust in financial services, where it was perceived that serious misconduct against clients had in a number of instances gone unpunished.
“People seek the aid of the recognised professions because their members have specialised knowledge and they act as fiduciaries on behalf of their clients. That means clients are in a position of dependency, relying just as much on the professional’s skill and knowledge as they are on the professional’s character,” he said.
“Consider the character of a professional who refuses to recognise his or her mistake. Consider the character of a professional who tries to cover up what he or she did wrong. Consider the character of a professional who prioritises his interests at the expense of the client who relies on him.”
Mr Brammall said that another similarity could be drawn from resistance within some parts of the advice industry to cultural change in the form of the FASEA standards, and resistance to reform within police departments.
“There’s an expectation that FASEA’s 12 ethical standards are going to professionalise the financial planning industry. But a functioning profession comes about when a community of like-minded people with shared culture and values [joins] willingly together to codify higher standards of ethical and professional conduct in the interests of the public,” he said.
“When viewed through the ‘character prism’, there’s a big difference between a community coming together voluntarily for the good of Australia, and a government body enforcing ethics on people who say they shouldn’t be interfered with because they’re just trying to make a living.”
Mr Brammall added that in order to restore “full confidence in the financial services sector”, it was important for the advice community to embrace the transition to professionalism, “now more than ever”.
APRA-regulated super funds could create better member outcomes by taking the sam...
Australian high-net-worth investors lost more money than their global counterpar...
The negative impact of COVID-related market volatility on clients’ super inves...