Financial planners from Commonwealth Bank-owned dealer group Financial Wisdom (FWL) are angry about the ultimatum the Financial Planning Association (FPA) has issued to the bank, says Greg Cook, former head of the FWL Adviser Forum.
Describing the sentiment among his peers regarding the CBA’s announcement on Thursday, Cook, who is also chief executive of FWL-licensed practice Eureka Whittaker Macnaught, says “whilst there’s been shortcomings in the timeliness of the way this has been handled [by CBA], I think there’s quite strong camaraderie”.
He emphasises the advisers are “very interested and concerned” about any clients affected, and keen to see them properly compensated.
“I can’t speak for CFPL planners, but [the feeling] around FinWis advisers – some 376 advisers and 150 practices – is that we support the announcement [made last Thursday].”
Shock and rage
“But our real rage, if you like, is around…the shock about the Financial Planning Association’s (FPA) position [announced] on Wednesday.”
Cook refers here to the address to members and statement the FPA issued on Wednesday, as reported here by Professional Planner. He takes particular exception to a paragraph that he sees as suggesting that all financial planners within the CBA group are lacking in ethics.
The FPA statement issued on Thursday, reiterating points raised in its Wednesday announcement, reads: “We have proposed that CBA introduces a mandate that each and every one of their financial planners must undertake ethics training, commit to no less than 30 hours of professional development per year and sign up to membership of an approved professional association.”
Cook says, “I’m speaking out because I’m probably fairly uniquely placed…there’s lots of long-standing FPA members around FinWis, but I’m probably the one that’s had the closest association in the last couple years,” explaining he is a long-term member, part of the FPA Conduct Review Commission and a fellow of the association.
He believes it “doesn’t make sense” to issue such a sweeping requirement as part of the FPA ultimatum.
Explaining he declined to give an initial reaction to the FPA statement, knowing the CBA was planning an announcement for Thursday, Cook says he first, “wanted to see what the FPA’s follow-up was.”
“At the time, I thought it was a really over the top ultimatum for the FPA to be giving…[and] was happy to reserve judgement on it for a day or two.
While emphasising the respect he holds for FPA chair Matthew Rowe and CEO Mark Rantall, he says the association “has disenfranchised many long-standing and highly-regarded members. It was ill-timed, ill-advised and overcooked.”
Dissent among FPA board, membership?
“It seems the Association I love has, on this occasion, been temporarily taken off course by a few ideologues on the Board,” Cook says.
Conceding that he doesn’t know all the FPA board members and “wasn’t in the room,” he says “I understand that the board was split about sending that ultimatum”.
“I think it’s fair to say that, some [board members]…have a certain ideology about the institutional licensed planners.
“And if that’s the case, then that’s unfortunate, because, as I say, the FPA is there to represent all professional financial planners, and not to be using some situation like this to damn a whole chunk of their membership.
“I’m making a statement out of the interest of the FPA, because I do feel their statement was to the detriment of the organisation,” Cook adds.
“I think that…the position they took will actually be detrimental to the membership numbers of the FPA.”
Cook says the above concerns are also shared by a number of FPA members outside of FWL, who have been in contact with him. “Some have also said the demand for CBA to pay for FPA memberships was a cash grab. This is also hypocritical of the principle of moving away from institutional funding and being a member funded organisation,” he adds.
The FPA was not immediately available for comment.
