FPA lurches from surplus to $1.195 million deficit
As the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) face into their crucial amalgamation votes, the FPA’s latest annual report reveals it has dropped to just 10,954 members, down from 11,811 the previous year.
As well, the FPA reported it recorded a before-tax deficit of $1,195,000 for the year ended 30 June, down from the $1,347,000 surplus a year earlier.
It said this saw accumulated members’ funds decreasing to $11,632,000.
The annual report states that the FPA recorded 891 new members, and that, overall, numbers decreased by 7% which “is in line with expectations due to several factors which continue to impact the financial planning profession, such as industry reform, new FASEA education and professional standards, plus changes to business models and adviser numbers within a few large Australian Financial Services Licensees”.
“These factors have caused a number of financial planners to leave the profession. This is also reflected by an approximate 14.4% reduction in financial advisers listed on ASIC’s Financial Adviser Register (FAR) during 2021/22.”
The annual report also expressly noted that “The FPA no longer runs the Professional Partner Program. In line with the Constitution, only individual persons can be members of the FPA”.
But the bottom line for the FPA is that it listed 174 FPA “Professional Practices” down from 189 the previous year with the number of “Professional Partners” down to zero from 49 the previous year.
According to the annual report, the FPA has fewer than 9,000 members who could be regarded as fully practising financial advisers, with 4,966 Certified Financial Planners (CF)s), 3,107 practitioner members and 1,050 “associates”.
The remainder of the organisation’s membership is made up of 436 “allied professional affiliates”, 171 “leave of absence affiliates” 229 “retired affiliates” and 995 student affiliates.
The greatest hit to the FPA’s cash flows related to receipts from members and non-members which were down $2.747 million
Seems like the FPA are desperate to get into bed with anyone following a negative $2.5million turnaround in 12 months
So which of the two marriage participants is bringing the dowry? It’s hard to tell, but as an AFA member, who is not over enthusiastic about the forthcoming nuptials, where there will be no white wedding, you can see why the two families have decided an arranged marriage is the only solution. One of my concerns about this amalgamation is that I’m not sure the old FPA attitude that your hard earned CFP (or whatever its called) only retains relativity while you retain your membership of the FPA has been sent to Coventry. (That’s got to have been a breach of the Trade Practices Act, surely?)
I don’t think either organisation has any idea how to stop the drain on membership, which is the core to the problem. And I don’t accept the BS line that governments have conveniently trotted out about too many representative organisations for a particular industry. That’s just the politicians version of divide and conquer, politics 101.
But my greatest concern is that the new body will not pay necessary attention to the need to increase risk-only advisers, which is the only solution to the LIF-driven state of the life insurance industry in Australia at the moment.
Good luck to the “SS AAA” and all who choose to sail with her
Impact of not being successful in advocating for Advisers? CSLR, failure in Levy reduction or elimination, failure to reduce red tape or any repreive whatsoever…. They’re at the table unlike aoifp but they don’t do anything once there. Impotent.
Associations going broke, planners going broke, insurance companies losing money…. Great job Frydenberg and Hayne
Very weaselly of FPA to trumpet the closure of the “Professional Partner Program” in an attempt to dupe people into thinking they are free of corporate influence. FPA still has a “Professional Practice Program” and still accepts large cheques from product companies for bulk renewal of employee memberships. These are alternative methods of directing corporate money into FPA coffers, and could reasonably be assumed to influence FPA decisions in favour of those corporates. It seems pretty clear that regulators and politicians make that assumption, from the way they routinely ignore most of what FPA says.
FPA still has a long way to go before becoming a professional association.
I cancelled my AFA membership last week. I do not want to have a part of the FPA. The way they treat members is terrible. We need representation on individual advisers. Reduce red tape, reduce complexity be very clear. Most memberships seem to help corporations or green light Gov’t thought papers. When does the FPA ever consult it’s members? When does the AFA ever consult it’s members?… Never seen a survey from either of them once.