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How to make advice a profession

Invercargill-based adviser Stephen O’Connor, who last week was awarded for his services to financial planning, says there is still a long way to go before his industry is recognised as a profession.

Tuesday, May 28th 2013, 6:00AM 3 Comments

by Philip Macalister

O'Connor has been recognised by the Institute of Financial Advisers (IFA) for his outstanding contribution to the financial advice profession in New Zealand and internationally.

He said that financial advisers won’t be recognised as a profession until the public views it that way.

That will only happen when advisers act like professionals and are united.

He says a number of people have asked him recently why they should belong to the institute. His response is that if they want to be considered as professionals they should join the IFA and it is that organisation’s job to be the body to lead the change in perception.

“In my eyes the institute is the professional body and it is their role,” he said.

He acknowledges getting to the professional status is a bit of an intangible thing, however it is an issue about leadership, which if the institute takes people will follow.

O’Connor says the IFA has to “constantly be engaging with members and they should get in behind it.”

One of the big issues in the public’s eye is the issue of how advisers should be remunerated.

O’Connor is clear that investment advisers should not take commission, however he has a different view about insurance.

“As far as investments are concerned there is no argument that there should be no commission involved,” he says.

“There is no reason for commission to be involved in that process.”

“When it comes to risk then it is a different question,” he says.

He said insurance advisers can charge a fee for the plan but implementing it and supporting it over the years can be remunerated by commission.

“There is still an argument to say commission is not necessarily a bad thing when it comes to insurance advice.”

“There needs to be full disclosure and both parties know what the terms of engagement are.”

Whether that is a policy of the institute he says: “I’m not sure it has been set in concrete so to speak and this is a policy of the institute.”

But the key thing is “articulating that message.”

About the Award
Each year IFA selects a single recipient to receive recognition on behalf of the financial services industry for their outstanding contribution over an extended period of time.

O’Connor was an inaugural IFA board member, served as President in 2004‐05. He has held multiple roles for the IFA’s predecessor, FPIA and chaired the College of Financial Planners, audit committee, and also served as President. Internationally, he has represented New Zealand advisers on the Financial Planning Standards Board (FPSB) Council, as Chair of the FPSB Council, and on the international Board of the FPSB.

 

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Comments from our readers

On 31 May 2013 at 7:38 pm 6ftndr said:
I use to be a member many years ago, but they did nothing for me and seemed to be an "investment" organisation, rather than "insurance".

I see absolutely no reason to join.
On 1 June 2013 at 11:23 am w k said:
I trust that all who call themselves Financial Planners are not only competent in life & health products (including structuring a buy-sell agreement) and managed funds, but also have good knowledge of fire & general (domestic & commercial), mortgages (debt re-structuring, commercial & business lending, etc), investment (not just managed funds, but also understand capital markets, options, stocks, fx trading, etc) & interpreting financial statements, basic taxation laws and Wills, Trusts, etc.
On 1 June 2013 at 2:30 pm Tony Vidler said:
Nice to see this article recognising Stephen's role in leading the industry for many years.

It is nice to also see he clearly hasn't lost any passion for the business, and remains a visionary & thinker. We need more Stephen O'Connor's!

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