Industry or Profession? Applying Social Contract Theory to Financial Planning in Australia

Abstract

The Australian financial planning industry has been subject to increasingly rigorous forms of government regulation. This paper applies social contract theory to assess whether financial planning can be considered a profession based on its current form. Social contract theory, which intertwines professional status with the promotion of the public good and delivering altruistic service to society, serves as the theoretical framework for this evaluation. Through an analysis of the financial planning industry’s regulatory environment and its response to public inquiries, this paper concludes that while strides have been made, significant gaps remain that prevent financial planning from being recognised as a full-fledged profession.