The Financial Planning Association has had some big member-driven moments in its history, from the vote of members of the International Association for Financial Planning (IAFP) and the Australian Society of Investment and Financial Advisers (ASIFA) that created the FPA in 1992, to eliminating corporate membership and making the association a practitioner-only entity in 2011.
On both these occasions, and on others as well, member turn-out was strong, the “yes” case received overwhelming support (94 per cent in the case of the 2011 vote), and the association moved forward with a united membership.
Now the FPA and the Association of Financial Advisers are facing another crucial member decision as they seek member support to combine two of the most important financial adviser member organisations to create the profession’s pre-eminent representative body.
It’s important this vote attracts a strong member turn-out from both associations so that the legitimacy of the result, whichever way it goes, cannot be questioned.
It’s become fashionable to dispute the outcome of democratic processes (see: the US; Brazil), and while this vote doesn’t rate as important as electing a president, it will nevertheless have far-reaching consequences for the profession and practitioners.
There are good reasons why merging the FPA and the AFA makes sense for the advice profession at this point in its development. The days of big issues that drove a wedge between the associations’ respective memberships are pretty well over; the causes and issues that unite the associations and their members are today much greater than those that divide them.
A merged entity that can claim truthfully to represent the majority view of financial advice practitioners will have a far greater chance of being taken seriously by policymakers and regulators.
Despite outlandish claims recently by a much smaller and less-representative organisation that it (and apparently it alone) was responsible for the change of government at the most recent federal election – as if female voters, disenfranchised renters, people concerned about climate change and the idiosyncratic personality of the former Prime Minister were not also factors – it is organisations that speak for the greatest number of individuals that make the difference and carry real weight.
Industries whose representative organisations speak with the greatest authority and credibility get listened to. And on that count a merged FPA/AFA cannot be seriously rivalled within the advice profession.
That’s not to say there is no role for smaller organisations – there is – because the views of the members of these organisations sometimes differ from what we might describe as the mainstream by virtue of them being, for example, specialists in a particular area with deep knowledge of a specific subject. Their voices should be heard.
For a merged FAP/AFA to have maximum credibility and authenticity, not only with its own members but also with regulators and policymakers, its creation must reflect the majority view of as many members who vote as possible. If it scrapes across the line or if members do not turn out in significant numbers to vote, then there’s a risk its legitimacy may be called into question, which would be a sub-optimal way for a new adviser representative body to come into existence.
This new entity has yet to be formally named, but in the scheme of things it’s less important what it’s called than what it does, how it does it, and for whom it does it.
Research conducted by CoreData last year sought responses on what associations the public had heard of, and whether an adviser being a member of these associations would increase or decrease trust in the adviser. Just out of interest, a wholly made-up name was added to the list of associations.
Even though this association did not actually exist, as many respondents said they’d heard of it as said they’d heard of some of the associations that do exist. Furthermore, as many respondents said their trust in an adviser would increase if they were a member of this non-existent associations as if they were a member of one or two other, real associations.
Apart from generating a few laughs, this research also showed that there’s simply not quite as much in a name as some might think.
