Webfeature: The courage and vision to get the FPA over the line

“Within the profession of financial planning, AFSL holders and individual financial planners are inextricably linked. So it’s not as though we wouldn’t talk to them, but we would actively promote Professional Partners who have signed up to a pledge – and the pledge is along the lines of they undertake to support this professional journey, they undertake to support financial planners adhering to the Code of Ethics, they undertake to work with us if there are breaches of that code.”

Rantall said the establishment of a Professional Partner category of membership was designed to minimise the likelihood of conflicts of professional interest between individual members and licensees or Principals.

“That’s precisely why we have got Professional Partners,” he said.

“You will not find that conflict in the Professional Partner ranks, because they will acknowledge that their planners, who are FPA members, have signed up to a code of conduct, and principle number one of that code of conduct is probably, in my opinion, the most powerful principle: Put you clients’ interests ahead of your own.

“I’ve been involved with a lot of AFSL holders over many years, and the vast majority of them are not going to want to conflict with that principle. [For] the vast majority of them, it’s in their interests to see that their clients’ interests are always put ahead of their own interests, because nothing else in a financial planning context makes sense.

“I liken it to the CPAs.

“There are lots of CPAs who work in industry. I’m a CPA, and I’ll give you an example: I actually walked away from a job that conflicted with my concept of my ethical standing, in terms of what I was being asked to do. Believe it or not, I was company secretary and accountant for that group…and I was being asked to do something and I saw things that I wasn’t happy with. You make a choice: you try to fix it, or walk away.

“This is why the Code of Ethics is so critically important. At the end of the day, it’s back to the individual to make a choice about their behaviour, and how they engage their client, and how they put the client’s interest ahead of their own, and their employer’s – which is also in the code.

‘This is not unusual, particularly where we are continuing to increase the standards of both entry and education’

“I think it can be managed quite well.”

Being a member of the FPA will only carry any kudos if the public perceives membership to be worth something, and begins to actively see out members to the exclusion of non-members. And the FPA must have the teeth and the courage to throw out members who do not measure up.

The FPA will spend up to $3 million a year over five years to convince the public that it is. It will be funded by a levy on members. A campaign is on the drawing board, spanning print, television, online and possibly radio. It will also launch a new logo.

Its aim is to promote FPA members as being “better” than non-FPA members – better in the sense of adhering to higher ethical standards; of achieving higher entry (and ongoing) education standards; and belonging to an association that puts professional duty above all else.

The AFA is reportedly also considering a campaign to promote adviser and advisers.

“We haven’t seen the AFA campaign, obviously, and we don’t know the basis on which it’s being proposed,” Rantall said.

“I understand they’re putting a business plan together, so it’s pretty early days.

“But I would say this: any advertising by any organisation or industry association that promotes the value of advice in a professional way is a positive thing. Our advertising campaign is all about differentiating our members from other financial planners, who may be operating in the industry.”

A corollary to promoting FPA members as the avatars of the profession is that expulsion from the FPA must have serious commercial consequences.

“We do publicise – as we have just done – people who have been disciplined and removed from the FPA register,” Rantall says.

(Rantall is referring to Storm Financial founder Emmanuel Cassimatis, who was expelled from the FPA and fined the princely sum of $20,000 for multiple breaches of the fPA’s code of conduct.)

“Bear in mind that we work very closely with ASIC as well, so they are aware of all of our actions in these cases, and they will take that on board, no doubt.

“And an important part of the Professional Partner program is that they sign up not to recruit any financial planner who has been removed from or thrown out of the FPA.”

Rantall said the overarching aim of the FPA was to complete the transition to a true professional association, as distinct from an industry association.

“Every professional association manages a transition,” Rantall said.

“It’s not unusual at all to have different levels of qualification criteria that are met by different people in different stages in their life. I’m one of them, in a different profession. So this is not unusual, particularly where we are continuing to increaser the standards of both entry and education. It’s a normal part of the evolution of a profession.

“There are two components of education. One is the entry-level education we have for admission. As you heard tody, CFPs already have a minimum degree criteria. And going forward, AFP members, from July 1, 2013, will have a criteria of a degree qualification to be able to be admitted.

“Then you have your designation education. CFPs, for example, we have units that have to be undertaken before you can be allocated your CFP designation. And in addition to that, you have your ongoing education. That ongoing education will be standard for everybody, and the requirements for that ongoing CPD will absolutely be standard across the board.

“For existing members, nothing will change. We’re not going to say to existing members you have to go out and get a degree.”

One other thing that will not change is that the CFP designation will remain dependent upon being a member of the FPA. Rantall’s confirmation of this situation put paid to the idea that the CFP could somehow be de-coupled from FPA membership, and that the CFP designation could be bestowed up on members of other appropriate professional associations.

Between now and April 7, 2011, when the vote on restructuring takes place, Rantall and the board, led by new chair Matthew Rowe, have some work to do. The three elements of restructuring, education and qualifications and public awareness must mesh seamlessly for the FPA strategy to work.

“But I don’t think we should get too hung up on the Principal membership issue”, Rantall said.

“That’s not the strategy; the strategy is the evolution of the Financial Planning Association in to a professional association, and everything that that entails, and being quite visible about that, and being clear about our value proposition, which I think is well articulated, and advising both our membership and the broader community who we are and what we do. That’s the strategy.”