Tomorrow morning at 11am, the Financial Planning Association of Australia (FPA) will release what it calls a “special consultation paper” to canvass its members’ views on financial planner remuneration.
It is recommending “a major shift in the way financial planners are paid”, the association said, in a press release issued earlier today.
Professional Planner will be at the press conference tomorrow, and will provide an in-depth report on proceedings in an e-mail update later in the day.
At first glance, it’s difficult to say whether the FPA is bowing to the inevitable, and buttering up its membership for the structural industry shift that surely must be coming; or whether it’s taking a genuine leadership position and trying to come up with productive, constructive proposals.
Ultimately, though, whatever the FPA’s thinking, the fact that it has formally put the issue on the table for discussion and debate must be applauded.
“The discussion paper will enable the FPA to develop a new remuneration policy to facilitate more transparency, better compliance and improved outcomes for both clients and financial planners,” the association said.
It’s a reasonably general statement, designed not to pre-empt whatever proposals it eventually puts before members. We’ll find out tomorrow the precise mechanisms for making submissions and the timetable that the FPA intends working to.
It’s only seeking input from members, at this stage. There are probably enough reviews and inquiries going on elsewhere, into which all and sundry have been invited to dip their oars, that it makes sense to limit the scope.
Professional Planner fervently hopes that the FPA’s efforts to achieve meaningful reform and a meaningful outcome from this project are not allowed to be hijacked by a small but highly vocal minority of its members who will vigorously defend the status quo.
Now is not the time for the majority of FPA members to remain silent.
If there’s one thing that every financial planner ought to have realised now, change is coming.And it’s not coming merely because a certain publication has refused to shut up about the issue, as it was suggested at a recent industry event.
(Nor is keeping the remuneration debate front-and-centre merely a device to sell more magazines, as it was also suggested; indeed, it would be easier, in many respects, to sell more magazines if this issue didn’t exist.)
Whether change is driven from the bottom up – by the grass roots of the FPA membership – or from the top down, by potentially heavy-handed regulation, it’s coming.
And every financial planner has to decide for themselves whether to embrace the opportunities presented by change, or to stick stubbornly to the old way of doing things.
It might be overstating it to say that the industry has been given a once-in-a-lifetime opportunity to effect significant and long-lasting change for the better – but it’s rarely had a better chance.
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