Professionalism a global approach IACA Seminar 25/1/2018 Jules - PowerPoint PPT Presentation

Professionalism – a global approach IACA Seminar – 25/1/2018 Jules Constantinou, President-elect, IFoA 24 January 2018

Professionalism – a global approach Agenda 1 Introduction 2 What is professionalism? 3 Upholding professionalism: The Actuaries’ Code   Quality Assurance Scheme (QAS)  Professional Skills Training 4 Challenging Advice (Video case study) 5 Vignettes 6 Finale 2 24 January 2018

Professionalism – a global approach Introduction Insert photo of Jules 3 24 January 2018

What is professionalism?  Hard to define but commonly associated with the following:- • Trust • Accountability • Status • Expertise • Values • Protected / reserved roles • Public Interest  The idea perhaps that professional people have some kind of heightened duty to their clients / the public because of the broader importance of the profession to society at large. 4

What distinguishes professionals in 2018?  Beyond technical competence (hardly unique to professionals), the answer must lie in relevant professional values and ethics, and the skill set (judgement and insight) to apply them.  Professional people have specific responsibilities:- • To act in the best interest of their clients, and to identify and act upon any conflict which inhibits their ability to do so. • To speak up, to their clients, regulators or others, in certain situations, beyond the requirements of the general law. • Subject to accountability and enforcement regimes in relation to both the technical and professional aspects of their roles and their conduct more widely. 5

The professions: from gentlemen’s clubs to the brink of collapse?  The professions are under threat, because:- • Society is better informed and more prepared to challenge (and litigate!) • They are seen to be anti-competitive • External competition in non reserved areas • Crises e.g. the banking crisis: undermine confidence in professional advisors • Greater accessibility of information – ‘de - mystifies’ the professions to some extent • Over regulation • Under regulation • Political short termism and the cyclical nature of the regulatory agenda 6

Professionals and Professionalism: the future?  Either we:- • Accept the decline in the professions, in the face of pressures from governments, the market and the public, relying instead upon statutory interventions in the market where necessary to protect public safety and effective competition; or • We believe that there is a societal need or value in the qualities of professionalism that the professions stand for. 7

Upholding professionalism - The Actuaries’Code In the beginning…  First substantive review since 2009 when the Code first came into force  Substantial changes to the IFoA and actuarial profession since then: • More members working internationally • More members working in wider fields 8

The Actuaries’ Code The review  What did we look at? • whether the Code remains fit for purpose in light of experience since 2009; • whether the Code appropriately reflects the international nature of the IFoA’s membership; and • how the Code interacts and fits with the FRC’s revised framework of technical standards. 9

The Actuaries’ Code How did we do it?  Information gathering  Benchmarking exercises  Informal consultation 10

The Actuaries’ Code What is being proposed?  A clearer structure  Simplification of language  Supporting Guidance 11

The Actuaries’ Code Integrity The Principles Competence Impartiality  6 high level principles and Care  Supported by amplifications  New supporting Guide Compliance Communication Speaking Up 12

The Actuaries’ Code Next steps  Consultation closed on 17 January 2018  Responses will be summarised in a feedback paper  Once agreed, period of transition before proposals come into force. 13

Initially restricted to UK but recently piloted in Singapore, Malaysia and Hong Kong

Upholding professionalism  Voluntary accreditation scheme for employers of actuaries  Focuses on whether there is a working environment most likely to produce good quality actuarial work  Operating in the UK for just under two years  Currently 33 organisations accredited in the UK  Represents coverage of employers of approx. 25% of the IFoA’s UK membership  Involves independent on-site assessment visits and interviews  Recent successful pilot in South-East Asia with likely geographic extension in 2018 15

QAS is outcome based Quality Assurance (including work review) Relationship with users Conflicts of • Engagement and interest communication • Handling and appropriate resolution of concerns QAS Development and Speaking up training of actuaries 16

QAS pilot  Pilot assessments took place in Malaysia, Singapore and Hong Kong from 25 September to 6 October 2017  Period of feedback and refinement of the detail  Decision on ‘live’ roll out in this region is expected in January 2018  First accreditations likely to be announced in May 2018 at the IFoA’s Asia Conference in Bangkok  Keen to hear from other organisations interested in the accreditation 17

Professional Skills 24 January 2018

Upholding Professionalism – Professional Skills Training 2017/18 Launched 29 September for 2017/18  10 new video case studies  One case study filmed in Malaysia  11 accompanying follow up videos featuring actuaries and other professionals discussing the issues 19 24 January 2018

Challenging advice - synopsis The ‘Yes We Care’ Defined Benefit Pension Scheme is carrying out its triennial valuation. The trustees of the Scheme have appointed Sheila as scheme actuary. Mark, the firm’s investment actuary uses the firm’s economic scenario generator (ESG) to develop expected returns on the trustees’ portfolio of assets, including a probability range. Mark also gets input from the Scheme’s investment consultants ‘We Invest you Benefit’. Mark, who used a different but equally tried and tested ESG, arrived at a similar ballpark figure for the discount rate for the triennial valuation which is about 1.5% down on the previous valuation. See how the trustees react.

Challenging advice

Challenging advice • Is it reasonable for Mark and Sheila to use the tried and tested method for the triennial valuation? • What is the best way to give bad news to your client? • How would you handle a client suggesting an alternative method which you don’t believe is correct ? • Is Lucy’s position tenable? • Is it right to recommend an alternative organisation to do the work which may mean losing out on any associated earnings for your company? • Are the scheme actuaries and investment advisors listening to each other?

Vignettes (1) 23 24 January 2018

Vignettes (2) 24 24 January 2018

Questions Comments The views expressed in this [publication/presentation] are those of invited contributors and not necessarily those of the IFoA. The IFoA do not endorse any of the views stated, nor any claims or representations made in this [publication/presentation] and accept no responsibility or liability to any person for loss or damage suffered as a consequence of their placing reliance upon any view, claim or representation made in this [publication/presentation]. The information and expressions of opinion contained in this publication are not intended to be a comprehensive study, nor to provide actuarial advice or advice of any nature and should not be treated as a substitute for specific advice concerning individual situations. On no account may any part of this [publication/presentation] be reproduced without the written permission of the IFoA [ or authors, in the case of non-IFoA research ]. 25 24 January 2018