And all Accountants are boring, and all Footballers are thugs, and all Politicians are liars, and all Real Estate salespeople are ummm, creative, and all Car salespeople are untrustworthy, and all Dentists love inflicting pain, and all of the Media are egotistic, and all IT staff are geeks, and all builders eat pies, and, and…..
…And apparently all Financial Planners are rich and get that way by ripping people off.
Now obviously, none of the above statements are true. In the same way that we can’t generalise about race, gender, colour, religion, hair colour, skin colour, or any other personal aspect guaranteeing a certain behaviour, we certainly can’t assume that everyone who happens to be in the same occupation has the same history, background, business type, ethics, or business practices.
If we look at the first paragraph,it is easy to see how these generic statements became commonly used. It is much easier to focus on the negative aspects of any occupation or profession and categorise them in your head as all being that way.
However in reality when you meet someone you would give them a chance to explain who they are, what they do, and how they do it. You also will know some or many people in each of the above professions who doesn’t fit the “generalisation”. And that is totally true and normal.
Every so often though there are so many terrible stories out there about one occupation that it seems as though there are no exceptions to the accepted generalisations. Currently it appears that Financial Planners are the target of this type of negative branding.
It is easy to see why this has come about. Occupations that deal with money are more prone to having people who make a lot of effort to rip people off. Quite often very sophisticated strategies are thought up and an enormous amount of effort put in to obtaining financial advantage through crime/fraud or just plain greed in any industry.
I worked in a bank for four years, and there were dozens of things people did to get money out of someone else’s hands. From the ordinary old hold-up, to stealing from people using ATM’s, to false identities and fraud, to EFTPOS machine “refunds” and runs, to running a business for 3 years then getting a large overdraft and disappearing, fake signatures, fake money, fake cheques it goes on and on. The effort involved is often way more than would be needed to get a job, but that doesn’t seem to matter to some people.
And Financial Planning from its past history of Insurance sales has often seen people who wanted easy money.
However with credit to legislators, professional associations and the profession itself, it is not actually easy anymore to get “easy money” from being a Financial Planner. As a direct result of the history, financial disasters such as the GFC, and Product failures, legislation is now so heavily implemented that it is estimated that up to 80% of the work done by Financial Planners now is “Compliance” related.
This means that the record keeping, file notes, reports (Statements of Advice), research required, and justification and reporting of recommendations and fees are now so time consuming, that a lot of those wanting “easy money” have left the industry, or are planning to. It’s too hard now to do the wrong thing. And that is great news for the Financial Planning profession and most importantly the clients.
This leaves us with way more of the dedicated, professional, caring, altruistic, generous and pro-active planners who actually love what they do and help people on a daily basis. I can give you dozens of stories of the life-changing planning that this profession provides, and I fully intend to. However to break through is hard work as negativity creates scandal, which creates interest and then ultimately reputation.
Here are some facts though:
- There are approximately 18,000 practicing Financial Planners in Australia.
- You would have heard about scandals from probably a few hundred over the last few years (let’s round it up to 500 to be sure).
- That is 2.77% of Financial Planners who have been “ripping people off”.
- That leaves 97.23% (or 17,500) Planners who haven’t been in the news for the wrong reasons.
So assuming that even if only two thirds of these remaining Financial Planners are doing a good job, then that means there are 11,550 Planners who are being unfairly labelled.
So let’s say that on average, each of these 11,550 planners have 200 clients; that is potentially 2,310,000 clients who are happy with their planning relationship. And a lot of these planners actually do a brilliant job, not just good.
Next time you see a negative story, ask yourself how many stories you aren’t hearing?
Authorised Representative of Aon Hewitt Financial Advice Limited
Authorised Representative No. 290343
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