The evolution of advisers’ status and recognition

The Financial Planners and Advisers Code of Ethics 2019 declared financial planners and advisers as “members of Australia’s newest profession”.

“As such, while they formerly provided a commercial service, they should be committed to offering a professional service – informed by a code of ethics intended to shape every aspect of their professional conduct,” the code reads.

This detail gains added significance in the context of the longstanding debate within the industry about the professional standing of advisers, a discussion that has persisted for years.

In October, Financial Services Minister Stephen Jones told ifa that the “professionalisation of the industry” requires an “acknowledged qualification framework” – something he said he plans to tackle once the Quality of Advice Review (QAR) has been squared away.

“We’ve got a problem here to solve. Let’s work together on it,” the minister said.

This quote implies that advisers are not quite there yet.

However, during the same interview, he said: “You’ve got a minister who gets it, who’s keen on working with the profession”.

Two months later, while presenting the government’s final QAR verdict, Mr Jones, once again, referred to advisers as professionals.

When discussing the government’s proposal for the creation of a two-tiered advice system, Mr Jones said: “The exact level of education will be determined in time, but a minimum standard of a diploma may be the right balance to be less onerous than the requirements for professional advisers.”

His reference to “professional advisers” implied that that’s the designation that those currently operating as relevant providers will be known as to the public.

Professionalisation as a term

The concept of professionalisation was also highlighted in the government's efforts to establish a pathway for experienced individuals.

Namely, in its 2022 consultation paper, the government said: “Without compromising the progress that has been made towards professionalisation, the government wants to ensure that the standards for financial advisers strike the right balance between valuing formal education and on-the-job experience, whilst continuing to ensure consumer trust and confidence in the advice they receive”.

Yet again, the implication was that professionalisation had not yet been achieved.

In August, the ABS recognised the financial advice profession with in-principle acceptance of the Financial Advice Association Australia’s (FAAA) recommendation to use the protected terms “financial adviser/financial planner” as the principal title of its occupation unit.

A couple of months later, the CEO of the FAAA, Sarah Abood, told a room full of advisers that the financial advice industry had graduated into a profession following a period of strenuous work which saw it shed over 40 per cent of its ranks.

Speaking at an event, Ms Abood said: “We would be the world’s newest profession”.

“We have all the education, the ethical, the experience obligations, and we are living up to these obligations. And something I’ve seen shifting in my short time in this role is a recognition at all levels of government and within the regulators that financial advice is a profession.

“We’re not people who sell financial products. We’re people that advise clients in their best interest and that is a very profound shift. We’ve earned that, we’ve worked really hard for that and we’re starting to see the outcome, at least that’s been my observation in my time in the role.”

Ms Abood’s words echoed the sentiment in the industry – that advisers have, for a long time, felt they are deserving of the title professional – and ifa agrees.

According to the Oxford Dictionary, a professional is “a person who does a job that needs special training and a high level of education”. Financial advisers undeniably align with this definition.

As such, ifa, from this moment on, will only refer to advisers as professionals.