Professionalism is not just about passing exams, even though this is important. It is a declaration to the public at large that the advice given by a financial planner is of the highest quality, is based solely on the needs of the client, is provided by someone who is not exceeding his or her level of competence, is governed by a code of conduct and ethics and is subject to consistent monitoring, with effective discipline applied to those who transgress. It is unfortunately still not the case that everyone has reached the levels of professional expected of financial planners.
The financial planning profession, just like the broader financial services industry, continues to face tough times in terms of public trust and esteem. It has now become ever more popular for consumers and other stakeholders to question the motives, ethics and values of those in the industry. Some of this has been self-inflicted in terms of years of bad advice, misrepresentation and the financial scandals which continue to damage public trust.
Amidst all of this, there continues to be a strong consumer demand for services offered by professional financial planners and their expectations are increasing. Financial planners must also come to terms with the fact that freedom and accessibility of information, spurred by the internet and media revolutions, will continue to threaten the information gap which exists between them and their clients. Consumers need expert advice from professional financial planners to guide them through the growing complexity, diversity and uncertainty in financial services. More specifically, the consumer needs guidance to set personal financial goals to achieve sound retirement and financial security outcomes through a well-structured financial plan.
As a community, we must work with all stakeholders to restore public trust and confidence by strengthening our commitment to professional standards, including an obligation to ethics and integrity and to continuous learning and improvement. Financial planners and financial planning companies need to go beyond the law in meeting standards of conduct, set an automatic high standard of competence and work in the best interests of the client. The FPI is determined to promote and enforce enhanced professionalism, which will be a challenge to some of our members, to the many others in the broader financial services industry who are not members of a professional body, to financial planning companies and to other industry associations.
With numerous changes we have seen in legislation over the last few years and increased licensing requirements for financial planners due to the introduction of the new Fit and Proper regulations, the financial planning landscape has also become increasingly complex for the financial planner. We, however, believe that these changes, while onerous on practising financial planners, will, over time, see a new generation of professional financial planners enter the industry.
The risk for our industry, however, is the decline in the number of independent financial planners due to the increased regulation and associated cost of compliance. While this has had an impact on markets, with the correct framework and support from the professional body, it will create a highly competitive landscape for motivated entrepreneurs who are able to embrace these changes. With the correct planning, structures and adopting new and improved methods of interacting with clients as well as the utilisation of outsourced partners or advisor networks, this will result in many viable independent financial planning practices. We believe that there is a place in the market for independent financial planners and that consumers should be given the choice.
To ensure that financial planners stay ahead of the game, the FPI, as part of its planning for 2011 and beyond, will increase the delivery of training as well as develop a focused range of continued professional development opportunities. We will also support our members through alliances with value chain partners and continue to ensure that our financial planners are challenged by ever higher standards of competence, skills and professionalism.
