by Susan Edmunds
Fred Dodds addressed the recent SiFA conference, at which he talked about professional bodies, asking why they exist, whether they add value and whether they have any effect in discussions with regulators.
“Of course, nobody seriously argues that financial advisers should be anything but competent and ethical,” he said. “The question is whether they need professional bodies for this.”
He said an association meant advisers had individual accountability to an independent body.
Although all financial advisers will be bound by a code of conduct under the new legislation, Dodds said some needed a chance to strive for something more and have something to be proud of.
“It’s one thing to have codes, quite another for them to be seen as having a high profile. I bet doctors and lawyers really identify with their codes as being absolutely core to what they do. There is an element of professional ownership and the sense that breaching the code brings shame.”
Associations would offer professional pride, he said, and many offered practical ways to improve, such as through CPD programmes.
Co-regulation alongside the FMA should be a goal, he said, even if that was some way off. “We even currently should push for assisting with monitoring – moving from 1,800 AFAs to a far larger number just by adding 6,426 RFAs. Perhaps we might get some breathing space if we built something. But to get to that stage we need a professional body that is effective – the short answer in any industry is credibility.”
To achieve that, associations had to have authority, independence and teeth, he said. “The ability to police a code of conduct and other conditions of membership.”
Advisers were too important to ignore, he said. “To be regulated is to be respected.”
A good association should offer learning opportunities, knowledge, opportunities for members to interact, advocacy on important issues and enable members to have their voices heard, either through contributing expertise at regulatory levels or mentoring younger members of the industry."
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