The Association of Financial Advisers has denied allegations it is ignorant of its own by-laws regarding a call for an Extraordinary General Meeting, stating the only legal measure in use was the requirement for 5% or more of members to request the meeting.
While the AFA by-laws state a meeting must be called if requested by either 100 members or 5% of the membership they also state the by-laws operate “in accordance with the Corporations Act”.
While the by-laws, which were last updated in December 2014, were previously consistent with the Corporations Act, the latter changed on 19 March 2015 and removed the 100 member criteria for calling a meeting.
As a result of this change, a request for an EGM of the AFA would need to come from 5% of its membership, or 148 members at the time the meeting was requested on 18 August.
AFA Chief Executive, Brad Fox said the Association has sought legal advice on this issue on 9 August and was told the 5% criteria is the only one in use under law.
…the 5% criteria is the only one in use under law.
He also stated the Association had applied that measure in assessing the request for an EGM from a number of members led by Now Financial Group Director and Fellow of the AFA, Mark Dunsford. (See: Formal Request For EGM Lodged With AFA)
Earlier this week the AFA confirmed that 230 members had submitted forms requesting an EGM but 103 of those forms were invalid (including 50 which were duplicates), reducing the number of valid forms to 127, which was under the required threshold of members required to call a meeting under the Corporations Act (see: AFA EGM Request Falls Short Due to Invalid Forms).
In a statement released to media after the announcement by the AFA regarding the invalid forms, Dunsford said Fox did not understand the Association’s by-laws pointing to section 43 which stated the threshold for a meeting was 100 members or 5% of the membership.
“Brad it is clear to us now, that you not only fail to understand carve outs, and the full impact of LIF legislation, but you also fail to understand our by-laws,” Dunsford said.
He also stated the request for an EGM had 127 valid requests (out of 230 submitted) and the AFA’s refusal to call a meeting came “…after all the AFA shenanigans of altering member’s numbers without telling advisers and accepting their money”.
Fox said some of the forms had older member numbers which had changed after the AFA introduced a new member database system in late 2015 and at that time it had issued members with new numbers.
…the AFA contacted 25 members who had used incorrect or old numbers … and had accepted their request forms
In correspondence sent to Dunsford, which Dunsford in turn released to the media, the AFA stated it had contacted 25 members who had used incorrect or old numbers and verified they were members and had accepted their request forms, which contributed to the 127 valid forms.
In announcing the number of valid forms earlier this week the AFA stated it was also contacting 24 members where forms had been received in their name but the details provided were insufficient to identify whether the member completed the form.
The AFA said it would help those members complete the form if that was their intention.
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This is farcical. The AFA dodge and hide behind a technicality. If they ever consulted their membership and took the majority opinion of their members as their stance, I think you would see a different set of policies put forward.
This is one of many reasons i will never be a part of any association, I have been in the business for 40 years, same stuff different day.
Start up a member based association, i am about to launch an Insurance Summit and invite active people in the industry.
Lester I would be interested in you elaborating on “This”…….? you mean abiding by the corporations act and the bi-laws of the association?
John J (old lifie & manager)
I have no doubt that over time the current remuneration system needs to be adjusted. However, I am not happy with the organisations who are supposed to represent me. I would not expect them to represent or protect the product suppliers who should have no claims or say in the Advice Industry.
Due to several personal distractions, I failed to cast a support for democracy, and did not get my form away.
With only 21 (officially) short of achieving a step towards democracy, it could be an option?
I’m not an “old lifie”, I’ve only been in the industry for 9 years, but I agree the AFA/FPA have never truly seemed to grasp or demonstrate what it means to represent advisers. When I compare their efforts to industry bodies in other industries, it’s mind boggling they’ve managed to survive at all. Stephen Handley.
Hi All, Can anyone tell us how many members the AFA has and what this NEW 5% hurdle would be? However, I am glad that the AFA leadership has taken this path as it shows as fact that the leadership have chosen a path of RESISTANCE AGAINST THEIR OWN MEMBERSHIP and the wishes of many. Wouldn’t it be prudent to actually find out how ALL members feel about it either way? There are plenty of members who have been to busy or haven’t seen this to put in their request form and unfortunately there are also some members who do want fairness and democracy, but are to lazy to stand up for it. Make a difference and speak up! Brad Bacon.
What is the AFA so afraid of ? The truth about this whole mess ? Come on Brad lets have this meeting and work it out Lets get the cards on the table have our say we apparently have heard all of yours ? and let the outcome one way or the other be determined for the benefit of those who deserve the best result ! the consumers ! who will be hardest hit by this and the flow on has been mentioned time and time again
From the outside looking in it looks awful for the industry to have this infighting but democracy needs to take place here.
It looks even worse and sticks out the” preverbial” dogs ? that something is not sitting well in the industry and is trying to be rushed through parliament before someone actually works out this legislation is “flawed” and the only winners are the Banks and Insurers.
It was not that many years ago that the AFA was a fantastic Representative Body that Advisers could rely upon. From my recollection of 33 years membership the managing body of the AFA fought some big battles with Government of the day and mostly came away with a sensible and reasonable outcome. Our old time members however they only fought the fight if AFA Advisers were justifiably under threat.
Our present AFA went in boots and all, never sought counsel from AFA members.
Government had a healthy respect for the AFA management team of years gone by.
Advisers have been sold a pup by the AFA. I actually feel they have turned against us as members.
I would not want to be on the front line with the present AFA management team. They certainly would not be there for us advisers.
Very unimpressed with the AFA here. Regardless of the 5% /100 member technicalities, they can see there is a huge problem here with their members and industry, and they should be calling the meeting regardless. It seems they are doing everything possible to NOT represent their members. This would NEVER happen, for example if it was the AMA with doctors, or the Law Society for the legal professionals. Unbelievably sold out. I’d rather pay money to be a member of the LICG, than the AFA/FPA.
The FPA and AFA have wittingly or unwittingly always supported their sponsors over their members. Hardly seems any point in being a member of a “member association” if the member’s wellbeing is put last.
If the AFA Board was fair dinkum they would have the meeting, anyway, to put the LIF to the vote of MEMBERS like they should have done in the first place, but they don’t want THEIR members to have a SAY – Unacceptable isn’t it!
If you want to bring democracy back to the AFA then email afaresolution@gmail.com, ask for a form and let’s get those last 20 votes to have a meeting.
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