The Association of Financial Advisers (AFA) has axed plans to merge with the Financial Planning Association (FPA), citing irreconcilable differences in membership bases.
The move brings to an end six months of negotiations between the two associations over the possibility of forming a single group representing all financial advisers.
AFA president John Hibberd says the AFA solely represents self-employed financial advisers, while only about 40 per cent of FPA members are practising financial advisers.
Traditionally the industry has perceived the AFA as representing advisers who offer risk advice as well as investment advice, whereas the FPA is seen as representing those with a strong skew towards investment advice. The FPA also has a strong membership base amongst funds management and life insurance executives.
While formal merger proposals have been canned, the two associations say they plan to continue a strategic alliance that has been in place for several years.
“Where there are issues of mutual interest, we will join with the FPA in any action which will result in better benefits for our members,” the AFA has written in a letter to its members.
Hibberd says while the merger issue is dead and buried for the moment, it is inevitable the groups will come to an agreement further down the track.
“In time, convergence in the financial services industry will dictate a single group to represent all advisers,” Hibberd says.
However, uncertainty about the regulatory environment governing financial advice, particularly the imminent CLERP 6 legislation, makes a present union difficult, he adds.
The AFA will step up its political activity this year through a lobby group formed in association with the National Council of Life Agents Association.
