The professionalization of financial planning in Australia: an institutional logics perspective
Journal of Public Budgeting, Accounting & Financial Management
ISSN: 1096-3367
Article publication date: 17 September 2021
Issue publication date: 9 March 2022
Abstract
Purpose
This paper researches the professionalization of financial planning in Australia. The authors investigate how the institutional logic of major institutions inhibits this occupation from moving toward a professional status.
Design/methodology/approach
The study uses documentary analysis of government inquiries into Australian financial services from 1997 to 2017 to ascertain the various institutional logics relating to the professionalization of financial planning. The method involves generating ideas from the data and applying an institutional logic framework to make sense of impediments to the professionalization of financial planning in Australia.
Findings
The regulator adopted a self-regulation logic that empowered financial institutions to govern financial advice. These financial institutions have a logic of profit maximization that creates conflicts of interest in financial planning. The financial planning professional bodies adopted a logic of attracting and retaining members due to a competitive professional environment. Thus, financial planners have not been defined as fiduciaries, professional standards have not increased and an ineffective disciplinary resolution system exists.
Research limitations/implications
This research illustrates the various institutional logics that need to be addressed to professionalize financial planning in Australia. However, the data used is limited to that drawn from the parliamentary inquiries.
Originality/value
Prior research on the emergence of professions such as accounting has shown that financial institutions are sites of professionalization. This research shows that financial institutions impede professionalization in financial planning. Also, where the state granted legitimacy to other professions, this research indicates that the state regulator's logic of self-regulation has not legitimized financial planning.
Keywords
Acknowledgements
The authors would like to acknowledge the excellent feedback from Dr. Michelle Cull, two anonymous reviewers and the editor which helped to improve this paper.
Citation
Richards, D.W., Ukwatte Jalathge, S.L. and Senarath Yapa, P.W. (2022), "The professionalization of financial planning in Australia: an institutional logics perspective", Journal of Public Budgeting, Accounting & Financial Management, Vol. 34 No. 2, pp. 238-256. https://doi.org/10.1108/JPBAFM-11-2020-0182
Publisher
:Emerald Publishing Limited
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