FAAA looks to adviser numbers boost as operating deficit widens

Education reforms announced in 2026 making it easier for newcomers to enter the financial advice profession are a win for the Financial Advice Association Australia, its members and future clients, said outgoing FAAA chair David Sharpe in the association’s 2025-26 annual report.

Education changes announced in March by the Minister for Financial Services, Daniel Mulino, propose that “prospective advisers” hold a bachelor’s degree or higher and that they must also meet minimum study requirements in relevant areas such as finance, economics or accounting, along with completing mandatory financial advice subjects covering ethics, legal and regulatory obligations, consumer behaviour and financial advice fundamentals.

“Alongside consumers, Australians seeking to work in financial services will benefit by streamlining entry into the industry, while retaining the important role of tertiary education,” Mulino said in a March media release. 

The FAAA annual report, released on Friday, lists the association as a participant in a Treasury roundtable on the education standard in March 2026 and as having made a public submission on education standard reforms.  

Sharpe said there are not enough qualified advisers to meet demand for advice and FAAA chief executive Sarah Abood said in the report that the reforms followed more than two years of advocacy, including through the Joint Associations Working Group, and will allow more flexibility in the university qualifications advisers are required to hold, which widens the pool of students who could enter the profession.

The FAAA’s student member numbers grew by 186 to 1344 in FY26, but overall membership held firm, declining by less than 1 per cent from 10,799 to 10,726. Even so, revenue from membership subscriptions increased slightly, from $6.22 million in FY25 to $6.29 million.

The association’s report shows it recorded total revenue of $11.6 million in FY26, down 7.2 per cent on the previous corresponding period, due in large part to a fall in income from investments. Expenses fell from $13.1 million to $12.5 million, resulting in an operating deficit of $880,000, up from $635,000 in FY25.

As a result, retained earnings fell to $11.4 million from $12.3 million. Across two years of deficits, retained earnings have dropped by $1.5 million, or 11.7 per cent, from $12.9 million at 1 July 2024. Total members’ funds stood at $14.4 million as at 30 June 2026, and the association held $21 million in cash and investments.

Special projects

The FAAA board said the FY26 result includes almost $1.2 million spent on “special projects aimed at enhancing member services, supporting professional standards and strengthening the long-term sustainability of the association”.

“These investments were aligned with the association’s strategic objectives,” it said.

Abood said FY26 was “a year of very active advocacy, with continued work to strengthen the profession and ensure our members have the support they need to navigate rapidly changing conditions”.

She said the Compensation Scheme of Last Resort remains a major concern for many advisers and a top priority for the association. The $10 million special levy on the advice sector was half the maximum it could have been, and the association will keep pushing for an exemption.

Abood said government, the opposition and the crossbench engaged with the association more this year, and policymakers increasingly seek its input earlier in the legislative process.  The association was one of the few organisations invited to appear before the Senate Economics Legislation Committee in June, she said. 

Abood said AI went from almost a fringe issue to a core one during the year, and the association is rapidly increasing its time and focus on it, for members and for itself. She says more than 60 practices now use FAAA SafeID, the digital client identification tool launched with KordaMentha, and biometric capabilities are planned. 

Sharpe, a cricket tragic, said the FAAA’s advocacy works on the front foot in proposing improvements, and on the back foot in resisting policy that could cause harm to advisers and their clients.

He said the FAAA is “not simply a self-interested representative body”, and that cutting needless red tape not only lowers costs for practices but also reduces fees paid by clients.

Sharpe will step down as chair in November and pass the baton to Michelle Veitch. Abood said she has worked with Sharpe for almost five years as a director, four and a half of them as chair, that have been “critical for the association, including the merger of the FPA and AFA, setting our strategic goals through to 2030, and countless meetings, conferences and discussions on every aspect of the profession”.

“Through multiple tough discussions I’ve never seen David get angry,” Abood said.

“By being direct, with humour and pragmatism, he has gotten the results as well as the strong support of the team.”