Has advice achieved professional status?

A study from the University of Southern Queensland has examined whether advisers have the attributes associated with professionalism.

Based on four key professional attributes derived from literature and applied within a financial context using a tool designed to measure progress over a period of 12 years, the study surveyed 1,093 advisers over a four-month period in 2022.

What the researchers found is that while financial advice had made strides towards professionalism, it still remained an ongoing process.

Namely, the study concluded that while a majority of respondents operate as professionals supported by heightened levels of professional membership, ethical adherence, and levels of education, “it is a challenging and ongoing process, which is often reduced by the dubious acts of others”.

“Financial advisers demonstrate conformance with professional attributes supported by heightened mean outcomes recorded on each category of professional attributes,” the paper said.

“Positive correlations were found between demographics such as age, education, and business size, on that of increased mean results across professional attributes. Positive correlations were identified including interdependent relationships found between each of the professional attributes. Positive correlations were located between increased mean on professional attributes and professional progress,” it continued.

“Combination of the above attributes when put into public practice suggest that financial planning is evolving into a recognised profession”.

The researchers also touched on recent regulations in financial advice that, they said, reflected an adviser’s professional status like other conventional professionals such as qualified lawyers, doctors and international financial advisers.

However, in order to iron out the challenges and continued moving towards concrete professional status, the researchers said “it is imperative that Australian financial advisers, offering professional input, commit to being involved in shaping the professional policies, governance, [and] processes so that financial planning becomes a true profession run by advisers like other established professions run theirs.”

Interestingly, the study also found that the biggest area of improvement for advisers over the reviewed period was ethical responsibility, particularly regarding responses to education, client focus, remuneration, ethical direction and conflicts — each of which showed significant mean increase.