There will be no relaxing of entry conditions for Commonwealth Bank’s network of financial advisers to join their respective industry or professional associations, according to the heads of the Association of Financial Advisers (AFA) and Financial Planning Association (FPA).
Both associations support the move announced by CBA late last week, when Professional Planner became aware the bank would be mandating membership of a yet-to-be-decided industry association for its financial planners and their supervisory staff.
But Mark Rantall, FPA chief executive, suggests it would not be giving CFPL advisers any special treatment.
When asked whether the FPA would consider relaxing any of its entry requirements for CFPL advisers, Rantall says, “clearly, we’ve got to work through the detail of this. But for some time, we’ve had our requirements out there, they’re public, they’ve been set by the Board, so I can’t see that they’d need to be relaxed at this point in time.”
He reiterates this point later in the interview, stating that, “we don’t have different categories for different organisations”.
Approved degree requirement
Only a modest number of the CFPL’s 663 financial planners are currently FPA members, with 81 designated Certified Financial Planners (CFP) and 30 Associate Financial Planners (30) – a 17 per cent FPA membership rate.
This rate climbs substantially across Financial Wisdom’s team of more than 370 advisers, where 128 and 52, respectively, are CFP and AFP members – an almost 50 per cent FPA membership rate.
CFP and AFP members are required to hold an approved tertiary degree, though there is no such requirement for the more limited Associate membership, which is open to affiliated financial planning staff such as paraplanners, compliance officers and technical analysts.
Asked whether he believes a substantial number of other CBA advisers would meet the FPA’s eligibility criteria, Rantall says, “we’ll work with the CBA on talking to both them and also their financial planners, as they have indicated, and supervisors, around the different categories of membership that we have.”
Association of Financial Advisers
According to Brad Fox, AFA chief executive: “It’s a very positive move for the profession to have advisers not only meeting their licensee’s requirements but entering into a cultural drive that extends from professional association membership”.
While unwilling to share the number of CBA group financial planners that are AFA members, he says, “we don’t have a significant number of members in CFPL, but have a number of members through Financial Wisdom.”
“[CBA financial planners] would meet our entry requirements on the basis that if they’re an authorised representative, they’re entitled…the issue is that they do need to go through a process of being nominated and accepted [into the AFA].
“In joining the AFA, someone does need to commit to upholding our code of conduct, that becomes the litmus test,” says Fox.
He suggests CFPL advisers would be subject to a strict vetting process. “If we were to make an arrangement to have a large influx of members coming from any particular licensee…what we’ve done in the past is make sure we present to them [and] make sure they’re a cultural fit.”
Fox urges caution in viewing CBA’s move to mandate industry association membership as overly significant, while recognising it is “another step towards professionalism”.
“But there is an issue here – if all of the advisers across the entire market…overnight became [an industry association member], that doesn’t mean we’ve professionalised or changed anything.
“You need to make sure they adopt the cultural behaviours and beliefs that go with that, and it has to play out in their day-to-day behaviour…the mere act of joining doesn’t change the person.”
