Can FPA and AFA muster the numbers to merge?

Mike Taylor

Managing Editor and Publisher

2 September 2022

It has been attempted at least twice before and never reached memorandum of understanding stage, but a merger between the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) will still be hard to achieve.

Financial Newswire has confirmed that discussions have been opened up between the FPA and the AFA twice in the last 15 years but did not progress to a stage where anything was put before members of the two organisations.

What is more, there was a recognition that, with respect to the constitution of the FPA, 75% of members would have to vote in favour of a merger for it to be achieved with AFA members similarly having to be committed to such a move.

What is more, there is expected to be member friction around the status of the FPA’s Certified Financial Planning (CFP) designation and the Fellow Chartered Financial Practitioner designation offered by the AFA.

The two organisations have proposed that the CFP designation be the primary designation of any new association. Member feedback yesterday was already signalling dissent.

But it is clear that the imperative for the merger is both financial and demographic. Both organisations have been losing members and the latest data show that there are now 11,264 fewer advisers in the profession than was the cost in 2019.

According to the latest analysis from WealthData, the FPA has 7,257 members who are registered on the Financial Adviser Register (FAR), while the AFA has 2,040. Both organisations have a number of members who are not on the FAR.

However, the bottom line is that a merger of the two groups will result in an organisation with slightly over 9,000 financial advisers in circumstances where the FPA was reporting that it had 13,189 members in its 2020 annual report and 12,049 in 2021.

In announcing the signing of the Memorandum of Understanding, the joint statement from the FPA and AFA said they would be seeking feedback from their members before inviting them to vote on the proposal, probably before the end of calendar 2022.

“The FPA and AFA boards believe there are substantial synergies and other benefits for their respective members from a merger, providing a united voice and stronger advocacy for financial planners and advisers,” it said.