The financial planning industry is at a tipping point and the result of the upcoming Financial Planning Association of Australia members’ vote on restructuring will determine whether it tips into becoming a profession, or into irrelevance, according to the chief executive of the FPA, Mark Rantall.
Rantall told an association meeting in Sydney that getting members’ approval for the restructuring was more onerous than getting a positive vote in a referendum.
He said now was not the time for “the vast silent majority” of the association to sit on its hands and allow the debate and the issues to be hijacked by a vocal minority with a very narrow set of interests to push.
Proxy voting for the membership restructuring opens on March 14 and the final vote will be announced at an extraordinary general meeting of the FPA in Melbourne on April 7.
If members approve the proposal, principal membership of the FPA will be abolished and voting rights will rest solely with individual Certified Financial Planner (CFP) and Associate Financial Planner (AFP) members. This will send a very clear message that the FPA is an association focused on the professional responsibilities and development of individual planners.
Rantall urged members to think very carefully what a professional association should look like and what it should do. He said there were structures and procedures that any professional organisation must have before it can be recognised as such, and as things currently stand, the FPA is the only organisation in the country that qualifies.
He said the FPA’s mission was to develop financial planning into “a universally-respected profession”.
“I hope you get the sense that things are changing, around not only the FPA but around you as professionals,” Rantall said.
In addition to restructuring, Rantall said the FPA was actively engaging with policymakers to ensure that regulatory changes, such as the Future of Financial Advice (FoFA) package, contained as few unintended consequences as possible. But he also urged individual members to make a noise about proposed changes that could adversely affect their businesses and relationships with clients.
He said FPA members should let their local members of Parliament know how financial planning works, and why some aspects of the FoFA proposals – particularly opt-in – could have very serious negative consequences for the delivery of financial planning services.
Rantall said that about 320 financial planning practices had indicated they would take up the new Professional Practice designation, indicating that more than half of the planners employed in the practice hold a CFP qualification. He said the FPA was optimistic that as many as 1000 would eventually seek the designation.
On planet earth, the Financial Planning Association of Australia Limited, controls an international CFP accreditation, which is used as a substitute for professionalism.
At the same time the Financial Planning Association of Australia Limited is largely bankrolled by the major product pushing companies, who use that same substitute professional accreditation to market their product pushing distribution networks.
In January 2011 the FPA announced a vote on FPA membership becoming individual membership only. At the same time those major product pushing companies agree to become FPA Professional Partners, where a condition of Professional Partner status requires that at least 75% of their product groups advisers must be FPA members.
Remember he who pays the piper calls the tune.
Despite the opinions of HNW private practitioners, the majority of financial advisers in Australia are employed or licensed to those major financial product groups.
This membership proposition by the FPA means that for most advisers in Australia their FPA membership will become an employment or licensing condition controlled by the major product groups as part of a marketing and branding exercise.
Before voting we should all wake up and check which planet we are on.
As a Chartered Accountant and a member of the FPA I am happy to take on Paul Moran and declare war on and over-run product salesmen.
However the problem is that the product manufacturers need salemen to sell their products. Consumers want independent advice but are not willing to pay for it. This is the dillema. If the FPA wants to only represent independent professionals then it will need to expel most of its members. It can’t do this becasue it will die.
Talking of independence if the FPA wants its members to be independent then it has to stop accepting advertising and sponsorships from product manufacturers. If it does this it will also die.
Mark you are in trouble. Start looking for a new job as the FPA will not have any money to pay you.
I am not sure what planet some of you are on, but the committees operate without the bias that spell-check seems to think exists. I have been on the CFP certiufication committee for some time now and the clear majority (80%) are practitioners who care about professional standards. The issue of independence is quite different to the issue of profession vs industry. This is a legislative nonsense that has existed and is unlikely to change given recent comments at the FOFA sessions. Of course, independence is irrelevant if the public perceives us as true professionals. People making comments around the FPA and the big end of town need to get into present day realities and not what used to be some years ago. This argument really implies that things cannot change – I hope this is wrong or the accountants will over-run us. I have been in an environment where lack of unity caused a whole sector to disappear in favour of another ‘profession’ – it isn’t much fun…
Rob McCann again confuses professionals (practitioners) with the alienation of the ‘industry’ argument – get over it and move on.
This vote will achieve nothing!
The FPA is an enabler for product groups to continue the control of individual financial planners through AFSL licensing arrangements and business ownership.
FPA policy is not formulated by member vote, it is formulated by secret FPA committee and rubber stamped by the FPA board. The committees and FPA policy are dominated by product group licensee representatives.
The FPA enables the financial ‘product pushing’ industry to dominate financial advice.
This is not a separate agenda from AFSL’s.
Mark Rantall is expecting 1000 financial planning practices to take up the Professional Practice designation. I guess this means the FPA has chosen to put the question of independence in the too hard basket.
Not once have I ever seen the FPA try to discourage institutions from growing their “white label” planning practices, with the obvious intention of obscuring the ownership when approaching potential clients. The Australian consumer has no idea who they are dealing with when they look at a website or read an article by a rep from these groups. Yet now the FPA not only wants to ignore the practice – they are actually condoning it with this proposal!
How about only allowing the designation if the practice has the right percentage of CFP’s and are also willing to clearly display who ultimately owns them? I suspect there might then be about 10 practices taking up the designation
Alternatively only allow it if the entire organisation has the right percentage eg AMP or NAB or CBA. Allowing them to break into little subsets seems a bit like looking after institutions not members
It’s a fundamental shift. FPA needs to be representative of the professionals themselve rather than the industry. There are other bodies that can represent industry players. It’s about consumers having confidence when dealing with a CFP professional. This is a seperate agenda from AFSL’s.
So it seems Mark Rantall continues to seemingly alienate AFSL’s and their desire to work with organisations like the FPA in improving education and standards generally.
PATRON Financial Advice has never been a Principal Member of the FPA, however we have several times over the years thought seriously about this. The FPA continues to drive the industry into segments rather than solidarity.