Doctors, lawyers, accountants and engineers do not have any difficulties being recognised as professionals, both by their peers and their clients. The recognition of being a professional does not automatically extend to the area of wealth management and financial advice. Arguably, the treatment of the very rich by financial advisers most often has been of a professional nature, but for much of the general public, their experience of wealth management or financial advice has been limited to the often grudge purchase of an insurance product, with a generous commission payment the bitter pill to swallow.

The reality is that the wealth management industry in South Africa has been built on the back of the distribution of insurance and investment products. It has not been built on the back of consistent, high-quality professional advice. There is, however, a growing need for financial advice to be delivered on a professional basis that is recognised as such by clients and peers alike.

In this edition of Blue Chip, we explore what a shift to professionalism means for financial advisers and wealth managers. We do this at three levels: firstly from a macro-perspective; secondly at the level of the relationship between client and adviser; and finally at the nuts-and-bolts level of financial advice.

From a macro-perspective, Charles Pillai, the FAIS Ombud, outlines what it means to be a professional and charts the progress within the financial services industry to this new destination. Nigel Scott, a highly regarded South African financial adviser, considers the role of the financial adviser and how being a salesperson is very different from being a professional adviser. Antony Gevisser, from a UK-based wealth management business, considers the evolution of the profession internationally, while another international contributor Kevin Bailey (a top Australian financial adviser) looks at what is required to run a professional advisory business.

At the relationship level, Bill Bachrach, a leading coach of financial advisers in the US, provides some practical insight into how a professional relationship between a client and an adviser can be established. We also explore the relatively new phenomenon of life-planning, an approach to wealth management which suggests that appropriate advice can only be given after a client has developed a plan for his or her life.

At the advice level, we consider, amongst others, issues such as the possible dislocation currently occurring in investment markets; the role of speculators in the rise of the oil price; the challenges of managing risk on a professional basis; and the succession planning that advisers should be doing for themselves. Each of these issues is complex, and this emphasises why the world of the wealth manager is about understanding and managing complexity. It is also about continually dealing with future uncertainty in the face of client demands for certainty. These are not simple challenges. But professionals are not meant to have simple challenges.

The medical bias in this edition is not coincidental. Global demographic trends, with people living longer, suggest that the medical profession and that of wealth management will be the two most important vocations of the 21st century. The medical profession is long established as such. It is now time for wealth managers and financial advisers to stake their claim to the professional label. May this edition of Blue Chip be one small step in helping and encouraging this to happen.

Rob Macdonald

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