Our latest riskinfo poll asks: Should the AFA and the FPA merge?
The question is simple, but the answer is complex.
It makes sense to picture a unified adviser organisation that represents the entire financial adviser community, where a single voice will speak louder than the sometimes fragmented individual voices of the FPA and the AFA.
As Matrix Planning Solutions Chair, Pieter Franzen, points out in his open letter calling for a merger of the two Associations:
“Each organization … has strengths that support the advice profession. We believe that one of the associations has a strong governance and professional standards capability, whilst the other has clear strengths in building adviser relationship skills and developing the next generation of advisers.”
While each association holds similar philosophical positions on many issues, key differences that need to be addressed include:
- Future adviser remuneration models. The FPA supports a fee for service model for investment and superannuation advice, but it has today declared its support to retain a commission option for risk products. The AFA believes advisers and consumers should be given a choice of remuneration models that include the commission option for all advice provided.
- The FPA holds itself to be a professional organisation that sets the standards by which its members operate, similar to accounting associations. The AFA is more a representative body advocating the interests of its members.
Advisers who have already contacted riskinfo hold a range of opinions. One adviser believes that neither the AFA nor the FPA has been pro-active in supporting non-aligned financial planners. He believes the proposed merger will be ‘a merger of paper tigers’.
Some advisers have commented that the thought of being a member of an association that speaks on behalf of all advisers is one that resonates, while others point out that the accounting profession appears to have been well served by its two peak associations over many years.
What is your opinion? As we said, it’s a simple question, but while the answer is complex, we want to know whether you agree or disagree in principle with the question:
Should the AFA and the FPA merge?
Add your comment now
6 Comments
The AFA is “run by advisers, for advisers” with policy driven by an Executive Board of advisers. The FPA has a Board consisting of fund managers, etc. Both organisations have their places and mertis and can come together on unified policy. From an adviser perspective, WHY MERGE?? and risk the adviser losing his/her voice. There will be no “summer of love” by merging, both organisations only risk watering down their agendas and voices.
FPA is a political organisation. It loses itself in it’s own self-importance, listens to the loudest (richest!) fund managers and throws an authoritarian rug over advisers (oops - Financial Planners) thereby reducing their effectiveness and their independence. Why would a Financial Adviser/Business Owner want such a constrictive environment? Is the FPA really an organisation that represents advisers adequately?
I couldnt aggree more with Michael Nowaks comment above
As a long time supporter and member of the AFA for 30 years I welcome the discussions of having ONE Association representing advisers in Australia. Regardless of what has happened in the past and compositions of the various Boards, we as advisers should be looking at moving forward and having one Association run by advisers for advisers. Both current Associations have their good and bad points and if people of goodwill from each can meet and formulate an agenda for a combined adviser Association then not only all advisers in Australia will be better off but also our clients . The licencees regardless of whether they are institutions or independent can then have their own Associations. The only problem which might occur is for those advisers who have their own licences as to which association they belong.
Whilst it seems good sense to have one peak body working for advisers/planners, it begs the questions such as:
a. How effective will it be? and
b. Is it really working for advisers, or does it have its own agenda?
As both Michael and Lindsay have stated, the two organisations are quite different. The AFA is a smaller body that probably works more for its members, but does not have as big a voice. The FPA has a stronger profile in the government, but does have its own agenda and probably too many self-interests.
If both bodies were to merge, the people in charge will need to sit down, throw out all their past views and work together on how they can further the understanding of both the public and regulators of just what advisers/planners really do, plus how they can add value to a client by providing advice on protecting themselves and their families in the event of death, trauma and disability and creating long-term wealth for income purposes in retirement.
Additionally, it should not accept self-centred bodies such as Industry Super to continually denigrate the value of advice and ensure that they fully disclose 100% of their member fees and compete on a level playing field
There are many challenges for whichever body represents our industry, but if it is serious, they can be overcome.
A unified association appears to be the best structure subject the each association’s purpose being addressed and worked out to the benefit of AFA and FPA members and the whole advise industry. Government will no doubt listen more to a stronger body with significant numbers which should strengthen their voice in relation to proposed legislative industry changes.