The Financial Planning Association of Australia (FPA) has achieved a milestone in its evolution as a professional association, with strong membership renewals and growth in new members in the year to June 30, 2013 putting the association on an independent financial footing.
Chairman of the FPA, Matthew Rowe, said the association can now fund all of its current and planned activities on membership income alone and is wholly independent of any external financial support.
Figures to be released ahead of next week’s inaugural Professionals Congress in Sydney will show that about 1500 new members joined the FPA in 2012-13, and fewer than 100 of its 10,000 existing members did not renew.
This position has been further strengthened through almost 700 new members joining the FPA since June 30, Rowe said.
It was anticipated that FPA membership ranks would swell in the latest financial year. Until June 30, it was possible for individuals to join the FPA if they did not hold appropriate university degrees. Since July 1, an appropriate degree has been mandatory. This means that all those who joined after June 30 are degree-qualified. Rowe said that only about 250 of the 1500 members who joined In the 2012-13 financial year did not hold a degree qualification.
Financial independence
It is critical that any professional association set and maintain appropriate barriers to entry, he said, and not be accountable to anyone but its members. This is now the case for the FPA for the first time. It is no longer reliant on sponsorship income and will not depend on a profitable Congress for its financial viability.
The association achieved an operating surplus for the 2012-13 financial year of about $1.4 million. This has been earmarked to replenish reserves depleted when it converted to a practitioner-only structure in 2011 and to upgrade the technology underpinning member communication and services.
Rowe said the financial and membership results vindicate the FPA’s decision to restructure two years ago in order to pursue an agenda of true professionalism.
“When we made the decision to deliberately strike out and move away from being an industry association to being a professional body, we were told by a lot of people that it wouldn’t work and financially it would be the end of us,” Rowe said.
“The reason those financial results are important to me is it’s on the back of member growth. It’s on the back of the fact that there’s 1500 new members in the last 12 months, and 680 members in the first three months of this year. It means this organisation is now sustainable just on membership revenue alone.
“We’re no longer beholden to the institutions or the product side. Detractors in the past said the FPA was just a group for the big end of town.
“The challenge for us was if we are going to become a professional body, we have to be sustainable in our own right.”
The time is now
According to Rowe, the FPA is now – for the first time ever – running the race.
“This is the tipping point for us,” Rowe said. “It’s not about the size of surplus, it’s not about the fact that we’ve got all this money in the bank. It’s about what we’ve done has resonated with planners and they’re joining. And they’re joining in a way that means that we, as a professional body, are sustainable.
“We can do the right thing, and when you do the right thing, it resonates and people want to join that community. It’s about actions, not words.”
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