Fiona Morrison says the word regulation gets too much bad press, but that standards are key to the integrity of the profession
Regular readers will know that I get my inspiration for this column from a variety of random sources. Quite often I find myself each month wrestling with ideas, which to me are interesting, but to you, the reader, may be less so. Nevertheless, I do attempt to write about subjects that are not only topical but also of real importance to us as a profession and as professionals.
I hope that by focusing on a specific issue that I feel passionate about, it not only gives you an insight into me as your president but also the big issues of the day that I think should be on all of our minds as we go about our daily business.
I'd ban regulation... the word I mean.
I don't know about you, but I think that all too often it gets a bad press. It always seems to me to be the soft target, the easy option for people and businesses to take a pop at. They see it as a burden, an expensive overhead that adds very little value to their business.
As a regulated professional I find these views misguided and wide of the mark, but I guess I would say that, as the president of the IFoA. I think the word 'professionalism' has much more positive connotations, and perhaps we should focus on this word when we talk about the value that our regulatory, or professional, framework adds to business and the wider society. No one will dispute that being professional is a good thing.
Interestingly, a report commissioned in 2009 by three professional bodies, The Law Society, Royal Institution of Chartered Surveyors and Chartered Institute of Management Accountants, entitled British Professions Today: The State of the Sector, summed it up perfectly for me when they concluded that: "Professionals in the UK form part of the backbone of the services-based economy, play key roles in the political process, and, perhaps most importantly, provide vital services in our day-to-day lives."
The report highlighted that the problems in the banking sector, exposed by the 2008 financial crisis, illustrated all too clearly the need for professional standards, including rigorous qualifications, appropriate monitoring and enforcement mechanisms.
Absolutely I say. It is for this very reason that I am such a keen advocate of the IFoA's regulatory strategy, why I place enormous value on our status as professionals and why I think it is important to write about it.
The IFoA undertakes its regulatory role, first and foremost, in the public interest. But what does that mean, not just to us as members, but to the users of our services and, by extension, the general public?
For me it is simple; we have a primary duty to assure public trust. This is achieved by maintaining the quality of actuarial work by ensuring that: our education syllabus is appropriate so we produce high-quality professionals with the appropriate skills, knowledge and behaviours; we set appropriate standards and require our members to comply with them, including keeping knowledge up to date; and lastly, we speak up, where appropriate, on matters of public interest.
I would also suggest that rigorous, yet proportionate, enforcement is also essential not only in serving the public but protecting the reputation of our profession. Or as professor Andy Friedman put it in his 2015 discussion paper The Professional Body Sector Contribution to Social Infrastructure: "Confidence in professionals, professions and professionalism is generated and influenced by practices which meet standards of technical and ethical competence defined and promoted by professional bodies."
But does our regulatory strategy really make a difference - does it build trust in the users of our services? I firmly believe the answer is yes, and so do those who responded to the Financial Reporting Council's survey last year on the perceptions of actuarial quality. This shows that the profession is held in high regard by stakeholders. Of those surveyed, 96% were fairly or very confident in the integrity of the profession itself.
But as a profession we cannot rest on our laurels, and that is why over the next 12 months we will be launching a campaign, building on the successful launch of the Quality Assurance Scheme, to promote the benefits of professionalism and the value it adds to business and society.
So the next time you are faced with criticism at the cost of employing a regulated professional, remember to point out that this will help to bring trust and credibility to the business. What investor or consumer wouldn't want that?