FPA CEO Mark Rantall, outgoing chair Julie Berry and chair-elect Matthew Rowe

The Financial Planning Association of Australia (FPA) has outlined a major overhaul of its membership, a renewed emphasis on individual members as professionals, and an increase in the minimum education standards required for new members of the association.

The changes will be supported by a multi-million dollar advertising campaign to restore public trust and confidence in financial planners and the industry.

Unveiled at the 2010 national conference on the Gold Coast, the aim is to position FPA members as occupying the pinnacle of financial planning.

The outgoing chair of the FPA, Julie Berry, acknowledged that the association had lost the support of a portion of its membership in the past few years as it embarked on the transition from industry association to professional association.

But she said the new focus of the “new FPA” was to restore members’ pride in being both a professional financial planner, and a member of the association, and to give consumers a clear picture of the benefits of dealing with an FPA member.

Under the proposed new membership structure, the existing Principal membership category will be abolished. Only Certified Financial Planners (CFPs) and Associate Financial Planners (AFPs) will have voting rights and the right to take a seat on the board.

Principal members will have the option of becoming Professional Partners of the association. And it will establish a new category of Affiliate membership.

The FPA will restrict the use of FPA branding to individual members, and to local practices that fulfil certain criteria based on the proportion of planners in the practices that are CFPs and FPA members.

These changes will be supported by an advertising campaign that aims to inform the public that there is a difference between a financial planner who is a member of the FPA and one who is not.

Berry said the FPA’s new vision is that “members of the Financial Planning Association adhere to the highest standards of   professionalism, inspiring trust and confidence in the community”.

She said the FPA’s three-year would “transform the FPA into a professional association equipped and dedicated to leading financial planning to become a universally respected profession.”

“We will assist and support our members through education and advertising to differentiate their professional status,” she said.

“We will demonstrate, through professional policy and leadership, why FPA members are the voice of professional financial planning.”

Berry said the membership changes were designed to make the FPA “more about you, the individual practitioner”.

“Only CFP and AFP professionals will have voting rights within the FPA, to ensure that our focus is squarely on the needs of the practitioner on the front line,” she said.

“We have been accused in the past of representing the ‘big end of town’, and while anyone close to the FPA will know that to be false, we’ll be removing any doubt, by discontinuing Principal membership. That includes the right for Principal members to vote, to be represented on the Board or to use the FPA logo.

“Individual financial planning practices at a local level will be able to register and promote themselves as FPA Professional Practices.

“This will mean a lot more than just a rubber stamp – to qualify, practices will have to meet stringent membership criteria. Professional Practices will be able to use the FPA branding, identifying your business as a high quality, ethical and professional financial planning practice.”

Berry said that current Principal members or AFSL holders “who are prepared to meet certain criteria” may become Professional Partners of the FPA, “recognising the important role that they play in supporting the delivery of financial advice and promoting it to the community”.

And “a new category called Affiliate will be created, which will encompass paraprofessionals, current General Members and other people who support or are eager to connect with the profession”.

“Remember though, we are proposing that only practitioner CFPs and AFPs will be entitled to vote.”

The FPA has issued a consultation paper to members to get feedback on the planned changes. Members will be asked to vote on the changes at an extraordinary general meeting next April.

The chief executive of the FPA, Mark Rantall, said he was confident that members would support the changes. The change to the Principal membership category, for example, requires a 75 per cent majority.

Rantall said another factor that differentiates FPA members from non-members is that “FPA members have higher educational standards”.

“Members want us to keep increasing entry standards,” Rantall sid.

“Currently all of our AFP members have at least a Diploma in Financial Planning or equivalent, as well as one year’s approved financial planning experience.

“From 2013 onwards, there will be an additional entry requirement for new AFP members: an approved degree.”

Rantall said current members of the association would be “protected, but all new members from 2013 onwards will be required to have an approved degree to be accepted as an FPA professional and a voting member of the FPA”.

“As you know, members must already have an approved degree to become a CFP.

“Obviously, some existing CFPs and some AFPs will continue as valued FPA professionals without having an approved degree.

“This does not worry me, and nor should it worry you – it is inevitable that an emerging profession should have transitional arrangements as it travels towards ever-higher standards.

“Over time, all of our members will have an approved degree and post graduate qualifications, as befits a respected profession.”

The chair-elect of the FPA, Matthew Rowe, said the ultimate test of the planned changes would be if financial planning was no longer referred to as an “industry”, but as a profession instead.

8 comments on “FPA 2010: Major overhaul for ‘new FPA’”
  1. Avatar

    Comments that reference a view on experience versus education implies that educated advisers will forever remain inexperienced. Educated financial planners will gain experience over time just like everyone else. The choice is ultimately between educated experienced advisers and uneducated experienced advisers.

  2. Avatar

    It’s all very well to say that new entrants to the occupation\profession will need a minimum of a degree qualification but if you look back a few years ago how many graduates were flipping hamburgers.

    To survive you need to be able to convince some one to buy not just you but a product or service you offer. You can be as qualified educationally as you like, but if you can not sell you will starve and a fat lot of use your qualifications will be to you then.

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    I agree that education is not the be all and end all and that it is probably unrealistic to send an old dog to uni. But the grandfathering approach should be more about passing the same level of expertise rather than a free ticket. This will go a long way to keeping the standards equal across the board.

  4. Avatar

    Due to the malign influence of product group interests, the FPA has lost the support of the very financial planners who are most willing and able to become trusted independent professionals, and will never gain the support of its individual members until it completely breaks the secret influence of product groups within the organisation.

    Meanwhile, fixing education levels for individual financial planners will do nothing to increase public trust if the industry and FPA remains structurally corrupt through the control of ‘advice’ by ‘product’. The FPA is part of the problem and has not even started to address the real issues.

  5. Avatar

    The bar must be raised! It is essential that financial planners are better educated. It’s easy for newcomers – they should expect to be required to achieve at least the academic qualifications of, say, an accountant.
    Now what about the those who came before there was a bar to raise? I think that Katherine wants them thrown to the wolves while Neil has a more realistic view. Education is essential but it isn’t the be all and end all.
    The following definition of a profession says it all :

    ‘A profession is adisciplined group of individuals who adhere to high ethical standards and uphold themselves to, and are accepted by, the public as possessing special knowledge and skills in a widely recognised, organised body of learning derived from education and training at a high level, and who are prepared to exercise this knowledge and these skills in the interest of others.
    Inherent in this definition is the concept that the responsibility for the welfare, health and safety of the community shall take precedence over other considerations.’
    Education & experience are both essential but the vital ingredient is the right attitude.

  6. Avatar

    Well done…finally to the FPA. The “slow soldiers” to whom Katherine refers should be protected as they are the very reason we can have a profession called financial planning. If you think qualifications alone make people ethical ask the law society!

  7. Avatar

    I agree Katherine. There are too many ‘out of the ceral box’ CFPs out there. As a result, this qualification is not held in the high regard it should be, both amongst the public and other professionals.

    Lift the bar for all.

  8. Avatar

    You either have the required qualifications and experience to be considered a Professional or you don’t. The transitional arrangement should be a timeframe for existing members to obtain the necessary qualifications to meet the new CFP or FPA membership standards. As long as this ‘protection’ of members who entered the financial planning industry remains in place, how can we be regarded as a profession… I guess we have to wait for those individuals to retire. An army moves at the pace of its slowest soldier, so too will then our acceptance as a profession.

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