Earlier this month PIFA hosted a ‘Fireside Chat’ online, where members and directors gathered to share ideas in a friendly and informal setting. Lots of good things came out of these conversations but the most popular topic was about the benefits of professionalising …. basically: what does it mean to be a founding member of a new recognised profession in financial advice?
Another way to ask that question is what is the point of striving to be more than just another industry Association, and instead organising ourselves into a Government-Recognised and Statutory-Certified Profession? Is it a waste of money? Is it taking attention away from other member benefits?
In this series of articles we’ll explore what’s in it for you, the roadmap and our progress on it, plus we’ll answer the most frequently asked questions. Let’s get started: what are the 5 benefits of being recognised as a member of a profession?
- Unbeatable Client Value Proposition
Even with a fall in practitioner numbers, consumers still have a sea of financial planners to choose from, and many of them call themselves independent – whether they are or not. Adding to the noise, there are now individuals who don’t like PIFA’s high standards and so they’re setting up their own copycat organisations … (everyone seems to have their own spin on what independence actually means). The market is getting busier and busier … any Tom, Dick or Harry can ‘certify’ themselves as ‘special’ but it’s a different game altogether to have Statutory recognition bestowed by the Crown. The public knows this – your value proposition as a member of a real profession stands you head and shoulders above the imitators.
- Guarantee of quality, affordable PI coverage
A key reason Professional Standards Legislation was originally enacted was to protect the public through assured standards of professionalism. One of those protections is provided to consumers via professional indemnity insurance. Many financial planners have noticed steep increases in premiums over the last few years, a trend that is expected to continue, and more insurers leave the market each year making insurance expensive and difficult to obtain. Being a member of a Professional Standards Scheme means that legal liability is capped by the government, and this will always mean that insurers want to compete to win low-risk customers like the members of the recognised professions.
- Benefits unavailable to the rest of industry
What would life look like if your clients could claim a tax deduction for your fees? What about doing away with SoAs and instead giving short letters of advice like your lawyer does, or even giving your advice verbally like your doctor? The industry has been lobbying for less red tape and more tax concessions on fees for years, with zero success. The irony is that the government wants to make quality advice accessible … there’s definitely an appetite for both these ideas, so what’s the problem? The government’s challenge is to restrict the ability to give verbal, tax deductible advice only to career practitioners who have demonstrated they’re trustworthy. Members of the professions undertake significant commitments – much higher than the rest of industry – and in exchange the government is entitled to trust the performance of those individuals.
- Attract and retain quality talent
One of the great problems in business is attracting quality people and then retaining them to earn a return on all the training you’ve invested in them. Survey after survey shows that – although a competitive salary is appealing – staff are vitally interested in their ‘why’. In short, what does their work stand for, what does their employer believe in? An employer who takes a leading role to stand head and shoulders above industry as a committed professional provides a much more appealing and stable option for career advancement than an employer who is simply looking to do the minimum required by law. It’s certainly a more inspiring place to come to work than a fee-for-no-service, cut-corners, cookie-cutter FUM shop.
- Be a Surgeon, not a Barber
Your average ‘corner store’ barber has something in common with a surgeon … The College of Surgeons was actually born out The Barber’s Guild, which was a community of monks who used to cut people’s hair (you can hear the full story here: https://pifa.org.au/the-origin-of-the-professions/). The point in time when the two groups split boils down to a decision about whether to operate out of self-interest (and run a Barber Shoppe) or act in the interests of the consumer (assuming the role of trusted professional). Both occupations are in high demand (the barber accepts walk-ins, but the surgeon is exclusively available by referral only) but only the surgeon is recognised as an authority and a sought-after expert. The lifestyle enjoyed by your average surgeon – where they live, where they holiday, the car they drive, where their children go to school — reflects the extra commitment they have made to act in your interests rather than out of self-interest. Do you want to be in the Barbers Guild or would you prefer to a member of the College of Surgeons?
Your Association has bigger ambitions than just being another cog in industry’s wheel, lobbying the government for nickels and dimes. You, as a member of PIFA, are in business, for sure, but it’s your commitment, your long term view, your desire to be better … that makes PIFA the community that will always be a leader in industry. Your clients will recognise you for that.
Your next article explores the Roadmap to Professionalism and charts where PIFA is on that journey. Stay tuned …