The ethical image of accountants and tax agents have continued to hold firm despite a dramatic drop in confidence in the banking, finance, and insurance industry in light of the ongoing royal commission, but the same is not true of financial planners.
The latest findings from the Governance Institute of Australia’s annual Ethics Index found that the banking, finance, and insurance sector has scored the lowest in the index, falling 15 points from the year before.
“For the third year in a row, banking, finance and insurance was the lowest category in the Index. Its net score has dropped dramatically from last year with a score of -15. It has never before scored this badly — 55 per cent of respondents consider the sector unethical and only 28 per cent view it as ethical,” the Governance Institute’s chief executive Steven Burrell said.
However, accountants and tax agents continue to rank as the top two ethical occupations within the sector, scoring a net score of 31 and 18 respectively, down slightly from 34 and 19 in 2017.
Their scores ranked favourably when compared to financial planners and mortgage brokers, who scored -5 and -12 respectively.
“The Index suggests numerous high profile scandals, and the alarming corporate breaches being revealed on a daily basis by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, are undermining confidence in the sector,” Mr Burrell said.
Speaking to Accountants Daily, Institute of Public Accountants (IPA) general manager of technical policy Tony Greco said the continued high standing of the profession reflected the trusted image that has withstood the test of time.
“It is not surprising that the public at large perceive that relationship as reasonably solid even when you have breakdowns in the banking royal commission in relation to other professionals, in particular, financial planners where they've been the subject of all manner of criticisms,” said Mr Greco.
“Any profession has its bad apples and we wouldn't be saying we don't have any of that in our profession, but it is a case of how widespread it is and the regulation of our profession is governed by very strong ethical and professional standards, and that has stood the test of time, and the government allows us to self-regulate our members, and that's the model that seems to work [when] you compare that to what's happening in the financial services sector.
“The strong ethical and professional standards have a lot to do with it as well as the trusted role that accountants play. They don't seem to disappoint their client base anywhere near the extent of those other sectors have. We don't expect massive changes there, but that's not to say there's no room for improvement.”
Further, Chartered Accountant Australia and New Zealand (CA ANZ) tax leader Michael Croker believes the time is ripe for accountants to take advantage of the public’s perception and increase market share in the advice field.
“The royal commission is both a huge challenge and a huge opportunity for our profession,” Mr Croker told Accountants Daily.
“There is an opportunity for the accounting profession to revamp itself as the foundation stone of good advice and reclaim some territory where accountants may feel has been lost over the years. I think it's a strike-back opportunity.
“The opportunity is ordinary Australians who are seeking advice from someone who will help them prosper, resorting more to those trusted accountants and financial planners who they feel are in their corner, working for them rather than the financial institution's product.”
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