Peter Attia is a medical doctor in San Diego who runs a fabulous podcast series all about the quality of our health. He contends that good health ought not to be just absence of malady, but it should translate to a long life lived largely free of pain and at liberty to productively pursue meaningful and worthwhile activities. My description doesn’t do it credit.  

Anyway, in last week’s instalment Peter interviewed his young teenage daughter, Olivia, to air some questions she and her peers had about the incredibly tragic and very public death of George Floyd earlier this month.  

What happened in Minneapolis – how did this happen?

Peter side-stepped the politically-charged issues of racism and police brutality to instead ask a question he’s very qualified to ask. His question speaks to us as financial advisers, who are looking to become a profession.

What happened in Minneapolis: was it a mistake or something more flawed?

People make mistakes. That’s a fact of life and we as humans need to forgive mistakes because everybody makes them. But! We should only forgive mistakes, Peter says, where the person who makes the mistake (a) takes responsibility for it, and (b) learns from it so that the mistake isn’t repeated. Personally I think those conditions make a lot of sense. Peter takes it a step further, though.

In medicine, he says, there are two types of mistakes:

• Errors like inadvertently prescribing the wrong meds or nicking an artery while performing surgery. He says these are technical errors or errors of judgement and they can be forgiven provided the doctor owns the mistake to see it righted, and also learns from the experience so as not to repeat it.
• But there is another type of error, one that he calls an “error of character” which isn’t forgivable because a character error reveals a character that is unsuitable for the profession of which that person is a member.

The riots in the USA are not a reaction to a mistake made by an policeman. Peter contends that they’re a reaction to a character flaw that is allowed to persist in the profession of law enforcement.

As a profession in financial advice, then, what flaws should we tolerate?

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.

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.

Right now the financial press is reporting a spike in consumer complaints (some 3200 already this year), a 25% drop in adviser numbers, and ASIC is on the hunt for financial planners who are now seeking to ‘fly below the radar’ by providing advice without a licence.

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 join willingly together to codify higher standards of ethical and professional conduct in the interests of the public. What you can see in the trade press right now, though, is a reaction to the new legislation more resembling FASEA herding cats.

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.

It is essential that the Australian public have full confidence in the financial services sector. A recognised and accountable profession in financial advice is essential for that to happen. This is the right time. Now more than ever.

Find out more about membership of The Profession of Independent Financial Advisers.