Monthly Archives: August 2017

The comedy industry should certainly be giving thanks to Anthony (The Mooch) Scaramucci, and so, too, should the Republican Party. So, too, should Donald Trump. The Mooch might turn out to be the best thing that never happened to him.

A great day at the White House, Mr. Trump tweeted following the latest upheavals, including the Moochs rapid execution. He could be right. It could turn out, in terms of management style, to be a turning point for the White House.

At the House of Trump, chaos had reached critical mass, Mr. Scaramuccis plutonium-enriched persona being the prime cause. His smut-laden rampage in a New Yorker interview, besting even the Presidents normal ribaldry, was wrenching enough to finally and critically make real change happen, it being the appointment of retired Marine Corps general John Kelly as chief of staff.

In the scattershot, morally bankrupt Trump world, there will now be, for the first time, a chain of command. Things should get better not only because the bar is so low they cant get much worse, but because adolescence has been derailed.

As a military man, Mr. Kelly will bring discipline. Frogmarching the Mooch out the door was the perfect opening gambit, establishing his authority. Reince Priebus, the former White House chief of staff, was a welterweight. Competing power centres blossomed all around him, chewed him up, spit him out. The grenade-hurling Mr. Scaramuccis first act was to blow up Mr. Priebus before thankfully detonating charges under himself.

Not insignificantly, he also humiliated Stephen Bannon, the alt-right impresario whose clout has been shrinking steadily. Mr. Kelly is no fan of Mr. Bannon and his crew of white nationalist America-firsters, which is another reason why things should get better. Conventional thinkers now hold more sway. Rationalism has a chance.

Theres another reason why this past week should be seen as a critical juncture. It was the week that Congress Republicans finally got the message through to Mr. Trump that they are not going to take it any more. They forced him to back down on his intention to fire Attorney-General Jeff Sessions for the senseless reason of his doing the right thing in recusing himself from the Russian-meddling investigation. They put him on notice that any intent to torpedo the inquiry of FBI director Robert Mueller on Russian collusion would be suicidal. As well, three Republicans came forward to defeat his bid to repeal and/or replace Obamacare.

Mr. Trump cant go on the way he has been. He is the oddest of leaders in that while others seek to avoid controversy, he seeks to create it. He revels in the havoc and the storm. Mr. Scaramucci was viewed, given his brashness, his vulgarity, his ego on stilts, as a mini-Trump. Had his appointment as director of communications taken hold, it would have buttressed and augmented all of the Presidents seething quixotic tendencies.

Its no sure bet that Mr. Kelly may be able to rein them in. In his work as head of Homeland Security, some were dismayed at how readily he sided with Mr. Trumps attitudes on immigration. He curried too much favour, they say. No small wonder the President likes him so much.

But Mr. Kelly, widely experienced in Washington, has a mandate to bring order, which is what military men do best. Two other generals, national security adviser H.R. McMaster and Defence Secretary James Mattis, both no-nonsense individuals, will likely see their clout enhanced.

For all his madcap proclivities, Mr. Trump is sometimes capable of listening to reason. He didnt rip up the Iran nuclear deal or the North American free-trade agreement, lift sanctions against Russia, or move the Israeli embassy to Jerusalem. As for the Mexican wall, Mr. Kelly has been pushing him to back off. He may get his wish.

On all these issues, rationalists have made headway. They were able to do so in getting Mr. Trump to fire the Mooch as well. That decision, which required seeing the scars in someone with a similar persona and modus operandi as himself, may be a sign that his presidency is not a hopeless cause.

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With the Mooch gone, rationalism finally has a chance - The Globe and Mail

When I entered the accounting profession three decades ago, it was the preserve of middle-aged white males, conservative politics and the old school tie. I remember being expected to disclose my religion and school in order to win a graduate position at one of the big eight accounting firms in Sydney. And the cleanliness of my black lace-up Oxford-style business shoes (not brogues) was also a matter of considerable significance to the interviewer.

Comedian John Cleese reinforced this unattractive image of accountants in his description of them as appallingly dull, unimaginative, timid, lacking initiative, spineless, easily dominated, no sense of humour, tedious company, irrepressibly awful and whereas in most professions these characteristics would be considerable drawbacks, in chartered accountancy, theyre a positive boon.

While unkind observers might suggest that the personality traits of chartered accountants havent changed all that much, there is no doubt that the professional and business environment has changed a great deal. I was reminded of this when I received (circa 1985) an unusual letter from my professional body, the Institute of Chartered Accountants, about the future of our profession. The letter informed me that the accounting profession had entered a new world of technology, marketing and economic policy, in which we would become chief executives, entrepreneurs and thought leaders.

As a result, the letter claimed, traditional professional partnerships were finished. These would be replaced by multi-disciplinary consulting businesses. They would be built on the modern concepts of profitability and return on equity, rather than the quaint notion previous generations adopted of engaging in a trusted professional vocation in the public interest, irrespective of commercial reward. We were told that if we didnt get with the program we would be left behind, reduced by the end of the 20th century to low-value bookkeepers and compliance officers.

Free-market origins

Its hardly surprising that the accounting profession jumped onto the 1980s bandwagon. Those were the days in which powerful and compelling forces of deregulation, securitisation, free markets and globalisation were transforming much of the world. Societies became economies and economics faculties became business schools. And it was into this securitised free-market environment that the aspiring profession we now know as financial planning was born.

One of the strongest political supporters of this ideology was UK prime minister Margaret Thatcher, who famously declared: I think weve been through a period where too many people have been given to understand that if they have a problem, its the governments job to cope with it. I have a problem, Ill get a grant. Im homeless, the government must house me. Theyre casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. Its our duty to look after ourselves and then also to look after our neighbour. People have got the entitlements too much in mind, without the obligations. Theres no such thing as entitlement, unless someone has first met an obligation.

Over the following decades, the dominance of these ideas, often referred to as economic rationalism or neo-liberalism was assured. Australian academic Michael Pusey describes economic rationalism as a dogma that argues markets and money can always do everything better than governments, bureaucracies and the law. Theres no point in political debate because all this just generates more insoluble conflicts. Forget about history and forget about national identity, culture and society. Dont even think about public policy, national goals or nation-building. Its all futile. Just get out of the way and let prices and market forces deliver their own economically rational solution.

This view of the world was channelled by corporate cowboy Gordon Gekko, played by Michael Douglas, in the 1987 film Wall Street: Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed, in all of its forms greed for life, for money, for love, knowledge has marked the upward surge of mankind and greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.

An improper role

So pervasive has been the influence of this ideology, especially in the Anglosphere, that many professional designations have taken on the characteristics of product brands. This has coincided with the employment in professional associations of marketing managers and customer service specialists, many of whom apply their considerable expertise in the promotion of consumer products to the selling and protection of professional designations as though they are brands of soap powder.

As a result, the focus of many professional associations has turned to image, membership retention and growth at the cost of their traditional emphasis on the articulation and enforcement of professional and ethical standards. The problem with this approach is that it leads to the conclusion that the reputation and commercial value of a professional designation must be protected and upheld, right or wrong, rather than to the conclusion that the public interest must be protected and upheld, even to the detriment of the commercial interests of association members whose behaviour has been found wanting.

This misunderstanding of the proper role of professions in society has also led to the expectation amongst members that their associations exist principally to protect and enhance their commercial interests in a free market (as would a lobby group), rather than to protect the public interest in society as a whole. I was surprised to observe this confusion in the documents supporting the creation of Chartered Accountants Australia and New Zealand (formerly the Institute of Chartered Accountants), in which the following statement appeared: Our aspiration is for the new Institute to be recognised as the leading trans-Tasman voice for business. The danger here is that by taking on the attributes of a vested-interests lobby group, the public will conclude that chartered accountants are hypocritical and untrustworthy. I suspect many financial planners already think that.

At the heart of any true profession must be its members duty to society. This is often called our duty to protect the public interest. It is a higher duty than our duty to act in our clients (or our employers) best interests and it must always receive priority in the ordering of our duties as professionals.

Simon Longstaff, executive director of the Ethics Centre, explained it this way: The point should be made that to act in the spirit of public service at least implies that one will seek to promote or preserve the public interest. A person who claimed to move in a spirit of public service while harming the public interest could be open to the charge of insincerity or of failing to comprehend what his or her professional commitments really amounted to in practice If the idea of a profession is to have any significance, then it must hinge on this notion that professionals make a bargain with society in which they promise conscientiously to serve the public interest, even if to do so may, at times, be at their own expense. In return, society allocates certain privileges. These might include the right to engage in self-regulation, the exclusive right to perform particular functions and special status.

We risk being devalued

Given this unique and privileged role in society, it follows that when aspiring professions such as financial planning choose to become involved in thought leadership and the development of public policy, our commentary must not be primarily motivated by a desire to engage in a public relations exercise or a brand management campaign. Furthermore, we should never allow commercially motivated pressure from vested interests to dictate our conclusions.

Sadly, we have seen the latter occur in recent years in our industrys compromised and misguided attitude toward the development of ethical and professional standards. In that regard, professional associations often refer to the importance of balancing stakeholders interests when, in truth, all they are seeking to do is maintain the commercial status quo of powerful members (or a section of powerful members). I accept that avoiding commercial pressures is not always easy, especially when they are sourced from our own profession. However, unless we do so, our members, government, the media and, most importantly, the public whose interests we are privileged to serve, will devalue or ignore our contributions to important debates in which our professions voice should be heard and respected and they will ultimately mistrust and devalue our advice.

Therefore, as we grow and evolve the profession of financial planning we must defend without fear or favour the fundamental ethical principles on which any true profession is built: namely trust, integrity, objectivity, conflict avoidance (not mere disclosure), technical competence, due care, confidentiality, professional behaviour and uncompromising support of the public interest. Of course, as individual financial planners, we are obliged to make important contributions to our clients wealth and financial independence, but that must never be at the expense of our overarching responsibility as a profession to create a fairer and more equitable society for all citizens.

TOPICS:Ethics and financial planning,Market forces,Professional associations,professional standards,professionalism

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A dangerous misunderstanding - Professional Planner