Financial Advice Isn’t a Profession
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Let me clarify something. Many (if not most) of the advisors I meet are true professionals. They are fiduciaries to their clients. They are caring, thoughtful and very knowledgeable. Their clients are fortunate to have them in their corner.
That doesn’t mean that rendering financial advice is a “profession.” Here’s why.
It doesn’t meet the definition
Here’s how the Cambridge Dictionary defines “profession”: Any type of work, especially one that needs a high level of education or a particular skill.
We typically associate “profession” with occupations that require significant education. No one questions that term being applied to doctors, lawyers, engineers, teachers and dentists.
You can become a financial advisor without a degree from a college. You can even be a high school dropout. You simply have to pass a basic, three-hour examination to become certified.
Many advisors have qualifications that far exceed this minimum. They hold a Ph.D., MBA, CPA, CFA or CFP degree or designation, each of which takes thousands of hours of study. These advisors, and others, render a highly professional service.
Absence of trust
The financial services industry is plagued by a lack of trust. According to a 2016 poll by the American Association of Individual Investors (discussed here), “65% of respondents said they mistrust the financial services industry to some degree. In fact, only 2% of respondents claim to trust financial professionals ‘a lot,’ while 15% say they trust them ‘a little.’”