The longstanding chairman and executive director of mid-sized licensee Fitzpatricks has cautioned the FPA and certain other licensee groups against in-fighting, and urged them to consider the communal purpose of advice and what licensing arrangement would best suit that purpose.
Speaking to Professional Planner, John Woodley commented on the fractious debate that emerged since the Financial Planning Association released its five-year plan last week. The blueprint, which advocated individual licensing for advisers, was met with an angry backlash from several licensee heads, including Woodley’s own CEO at Fitzpatricks, Matt Fogarty.
“I’d like to focus more around what’s the community good of advice, let’s figure out the community function we’re trying to solve and work our way back from there,” Woodley says.
The executive director believes advice should have a “community good”, and that should be the starting point of any discussion that involves changing the licensing system under the Corporations Act.
“It would be lovely to see the weapons put down for a second and see what we’re trying to achieve,” he says.
When the FPA’s blueprint was released, a retort signed by CEOs at six major licensees – Fortnum, Centrepoint, Easton, Countplus, Fitzpatricks and Paragem – chastised the association for its lack of consultation and said FPA chief executive Dante De Gori’s comments were “at odds with the facts”.
“The FPA policy is a surprise and ill-considered given the hard work that the entire advice sector has put in to overcome historic shortfalls brought to light by the Hayne Royal Commission and in light of the leading work that AFSLs bring in areas of education, risk mitigation, compliance, consumer best interest measures and commercial support to advisers and their clients,” the joint statement noted.
The letter also referenced the cost of individual licensing without scale, as well as the layer of consumer protection licensees provide.
While the FPA’s policy on individual licensing may have come without fair warning for licensees who have strong relationships with the association, it did not come completely out of the blue. In early 2018 the FPA’s chief executive, Dante De Gori, made clear in this Professional Planner article that it favoured individual licensing as part of a ‘dual licensing’ arrangement, because it put the onus for professional standards squarely on the adviser.
“The current model, whereby the corporate entity, not the individual, is licensed, strips out the ability for the financial planner to be registered in their own right,” De Gori said at the time.
Since the licensees’ collective response, the FPA has come out and said it welcomes debate on the issue.
For Woodley, this debate is welcome. But it needs to come from the right place.
“It may be that individual licensing is the most appropriate way, but first of all, rather than getting into solution mode a good conversation is: What’s the community value that we’re trying to redeem the sector towards? What is the common good of advice?” he says.
Fitzpatricks is the 75th largest licensee group in the country by adviser numbers, with 104 under its umbrella according to the 2020 Professional Planner Licensee Owners List. The firm has almost doubled its adviser numbers since the corresponding 2016 list, when it had 58 advisers.
We may need to go back a little before we move forward, Woodley argues.
“Sometimes I think if we start from where we are today the solution might be substandard,” he says.