The Whitehouse, Washington DC, USA.
Recently, I was reading a biography of the late US President Ronald Reagan, which aptly described him as a synecdoche of America.
In this one man was a wonderful sample of the American character, and he managed to be an exemplar of all that is American, not only to his domestic audience but to the broader world. What you saw was what you got, and whether you determined that to be good or bad, it is rare that any one mortal can be an exemplar of an entire nation.
Indeed as a young American living in Australia, I recall the derision that resulted from his election. What sort of country could have one who acted with chimpanzees as a leader? Or who joked about dropping nuclear bombs? Or who was married to a lady who consulted psychics? The laughter diminished somewhat as he re-established American authority for peaceful means, restoring the US economy (and all the world-wide economic benefits that flowed from that) and brought a decisive end to the cold war. History continues to be much kinder to Reagan than his contemporaries were in 1980.
There were two apposite characteristics of Reagan’s personality: the moral authority he obtained from his adherence to his personal values; and his ability to bring opposing parties together as a peacemaker. His deeply held values, combined with a pragmatic political sense that the perfect should never be the enemy of the good, meant that he achieved far more and for a greater audience than anyone ever suspected.
Reagan’s experience has many lessons for the nascent profession of financial planning as it emerges, inchoate, from its origins in financial product sales. And haven’t we faced some obstacles in this journey? For a start, even the law under which we are governed does not recognise financial advice other than that which is directly related to the recommendation of a product.
Whilst our system of licensing has an inherent bias favouring scale, recent laws have worked against individual practitioners taking advantage of this – economies of scale for administrative services is a practice that is encouraged in every other enterprise but is prohibited to financial planners.
No wonder it is difficult for our prospective clients to sometimes understand what we do.
Despite these structural challenges, I am amazed that we are often our harshest critics of each other. And not in the positive sense of constructive criticism, but in the destructive denouement of fellow planners. Often their only crime is to have a different capital structure or business model to that of the critic.
Too often I hear or read – and usually in the public arena – planners panning professional colleagues, whose primary affront seems to be that they are taking a different approach to that of their accuser in pricing or packaging their advice. Or sometimes, they transgress through sourcing the capital for their business from impure shareholders (read: banks, fund managers, industry super funds).
It is quite right to examine suspect advice strategies in the cause of peer accountability. But it another altogether to bring opprobrium on those who are pursuing an entirely legal approach to business. To attack simply because they operate differently to you is not only immature, but short-sighted.
Friends, there are many of you who are excellent financial planners but lousy businessmen. The single most important strategic issue facing advisers today is increasing the number of Australians who wish to engage a financial planner. Anything that promotes consumer engagement with advice professionals is good for all of us.
Welcome diversity and competition because it will grow your own market. The need for quality advice in Australia is increasing every day, and we have not come close to saturation.
The success of your services or the attractiveness of your fees should be a matter for the market to determine, not an arena for proselytising.
Too often I see practitioners forgetting the long view and denigrating each other in the scrabble for the moral high ground. But, there are many roads to this peak. Just as each client is unique, so can the business model of a professional planner – and these differences are to be celebrated.
There is only one moral summit, and that is to put our clients’ interests first.
This is why I am proud to be a member of the Financial Planning Association. It is the only adviser association in Australia that puts the interest of the consumer first – before their members, before themselves, always holding their members to this proud calling.
The FPA is the only association, against much opposition, seeking to have financial planning acknowledged as a profession. It does this because it will improve the lives of all Australians, not because it will bring more members to the FPA, or more clients to its members. The fact that the FPA has grown dramatically in membership and influence since taking this stance again demonstrates the resonance of a movement that has found its time.
Three years ago, FPA members overwhelmingly voted for an association based on individual practitioners. By recognising the need, and then acting to remove corporate support, the Financial Planning Association lived the moral courage to do what was necessary to become a true professional association. It decided that the strength of united individual practitioners, sans corporate patronage, was an essential quality of a professional organisation, despite the existential risks this embraced.
From these actions comes the moral authority, like Reagan had, to bring disparate groups together for a common cause. The Financial Planning Association does not prescribe the business model of its members. It doesn’t care if they are self-employed or work for a bank. No matter if they charge by the hour or bill asset-based fees.
Rather, it calls each individual practitioner member to be accountable for their ethical behaviour. It is the only adviser association that does this, and in doing so fills the gap for professionalism in a way that legislation and regulation never can.
In doing so, the FPA moves closer to being the synecdoche of professionalism in Australian financial planning.
