We can’t fix the industry from the bottom up
Without a unified approach at the top of the financial advice food chain we’re never going to have a profession, Michelle Hoskin tells ABR editor Rob Kingsbury
The financial advice industry is never going to become the profession to which it aspires unless it can be managed that way from the top down, argues Michelle Hoskin, managing director of Standards International.
Talking to the comment from the FCA’s Rory Percival recently published in ABR – Percival: Financial advice not yet a profession – in which he expressed a personal opinion that the financial advice industry could not yet be recognised as a profession, since “a profession improves itself… [it] doesn’t look for someone externally, like a regulator, to tell [it] how to do things to improve standards”, Hoskin says, “At the moment we’re working from the bottom up. We’re trying to fix an industry that has years of baggage by putting in measures like Treating Customers Fairly, like minimum qualifications, as a means to bolster the industry and plug the holes. And that’s happening, as Rory Percival pointed out, mainly through regulation. We’re treating the symptoms – we need to go back to the source and analyse the root cause of the problem.”
For the industry to become a profession it needs to be run like a business, she argues. “If we step back and take a look at financial services it is just a business, where management should set a clear vision and the culture then flows down from the top.”
Expanding on that analogy, she says: “What we have at the top is a number of directors – FCA, IFP (now CISI), PFS, APFA, etc. – who don’t agree. At the moment everyone is focussed on their own interests. And if the people running the business can’t agree what a profession looks like, what chance has the industry got of getting there?
“We should be stepping back, taking a clean sheet approach and designing financial services as a profession – and then working towards that. Because that’s the only way I see the industry we work in achieving the professional status it wants. It needs to come from the top and cascade down.
“What we need is for the industry to come together and say, ‘What’s best for the industry?’ A profession needs a shared vision and a shared set of goals.”
She adds: “Imagine if all the interested parties came together with the Regulator and agreed a shared vision for financial advice as a profession and then every single one of those bodies pushed that mantra down through their ranks and their memberships, think how powerful a catalyst for change that would be.
“But at the moment the people with the most influence have massive conflicts of interest – and that is incredibly frustrating.”
Asked what individual adviser firms could do to help position themselves as professional businesses, in lieu of that united front amongst the trade and professional bodies, Hoskin says: “I think the best way for a firm to tackle it is to focus on what professional means to that business, what’s the standard of professionalism they want to deliver to their clients. Then start to design it from a clean sheet perspective, working from the top down. It’s the management team that has to set the standards and the professionalism within the business. When they do and when that’s followed, it’s amazing what can be achieved.”