March 16, 2012, by CRBFS Professor James Devlin
Professionalism and Financial Services
I read Greg Smith’s by now infamous letter whilst working on a project that involved reflecting on the meaning of professionalism in financial services. The picture that Smith paints of a morally bankrupt, self-interested bank is largely at odds with what we understand to be the essence of professionalism. As many will know, the regulatory authorities here in the UK see professionalism as a key pillar in efforts to increase levels of confidence in and engagement with financial services providers. From the policymakers’ perspective, it is clear that professionalism is largely connected with professional qualification levels of those who work in the industry. However, academic studies of professionalism incorporate a far more rounded and nuanced interpretation. Traits that have been identified as associated with professionalism include: use of a professional organisation as a major reference point; a belief in public service; belief in self-regulation; calling and commitment to the field or occupation; a high level of autonomy; a pool of specialised knowledge; membership who are highly trained intellectually; a code of ethics, and; a spirit of altruism.
Granted that financial services is a broad church and many of these traits will be found to varying degrees in a number of financial services organisations. Also, increased focus on professional qualifications will hopefully improve general level of specialised knowledge and should increase the awareness of codes of ethics etc. However, it is clear that the financial services industry has a long journey to travel before it truly exhibits in sum those traits normally associated with professionalism. Strong leadership, genuine cultural change and a change in incentives will be far more important than mere qualifications in engendering greater levels of professionalism in financial services.
I am not an expert but I do agree with Prof Devlin’s comments and observations surrounding professionalism in financial services. I particularly like the definition quoted in Jack Bogle’s book ‘Enough’ where he quotes Daedalus – the feted journal of the American Academy of Arts and Sciences – stating:
“The primary feature of any profession (is) to serve responsibly, selflessly, wisely and to establish (an) inherently ethical relationship between the professional and general society.”
The idea that there is, in a sense, a prerequisite for a) lower self interest and b) a wider responsibility to society at large helps shape an idea of professionalism in practice.
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