Financial planning as a profession: where do you fit in?

These three terms mean different things to different people. When I hear the word broker, I think of somebody from the era before the Financial Advisory and Intermediary Services (FAIS) Act who will try to get the best financial product deal for the consumer. The word adviser reminds me of somebody who is qualified to give advice on a financial product, and a financial planner somebody who can give financial advice on a product but his/her main focus is rather on assisting clients to meet their financial objectives by way of process driven financial planning. At the end, it does not matter what we call ourselves, as in the eyes of the regulator, we are all financial services providers.

It is unethical for brokers and advisers to call themselves financial planners when they do not meet the qualification, ethics, experience and certification requirements set for financial planners. A true profession cannot be built when consumers are confused about who and what we are. More and more are embracing and understanding the words profession and professional, but there still is a misunderstanding, misuse and complete ignorance of what professional financial planning means.

So what is a profession then? A profession will be a profession if it meets the following six criteria:

• It has an intellectual base. The competence of a financial planner must be acquired not only by practical training, but also by way of intellectual training.

• It must be present in a practice. The professional person practices his/her profession in a practice where he can advice his client on a one-on-one basis.

• It has a tradition of service to clients. Rendering a service requires a high amount of objectivity and integrity, especially whenever a personal judgement is made on behalf of a client. The motive to make money must be subordinate to the requirements set by the public interest and the direct personal relationship of trust must be upheld.

• It has a representative professional body or institute. This body or institute must supervise over the competencies, capabilities, standards and professional behavior of the profession.

• It has a code of conduct. The FAIS Act not only introduced a regulatory environment for financial advisers and financial planners, but also a code of conduct. The FPI has also a code of conduct which his members, financial planners, must adhere to.

In the case of Die Prokureursorde van die Oranje Vrystaat v Schoeman 1977 (4) SA 588 (O), Judge MT Steyn accepted these six requirements as the requirements for a profession. We can make out a case that an attorney and a financial planner differ quite a lot but nobody can argue against the logic and principles behind the above six requirements. It is clear that the six requirements can be applicable.

This said, we still have a way to go especially if the FAIS Ombud determination of Jacqueline Bekker v Edward A Carter-Smith is something to go by.

In this determination, the following was said: "highest qualification available in my profession is that of a Certified Financial Planner (CFP™).”

It is clear that neither the respondent in the determination, nor the Ombudsman, is aware of the fact that CFP® is not a qualification, but a globally recognised professional designation for certified financial planners. It is also not TM but ® meaning it is a registered trademark. What is in a name? Not a lot, but it shows that we are still a long way from a profession if consumers and regulators do not recognise it as such.