The Association of Financial Advisers (AFA) risks undermining years of authentic, respectful, and thoughtful advocacy for its members, which has given it a seat at the policy negotiating table, if it accepts moves for a constitutional change limiting the discretionary power of the board, according to AFA chief executive, Brad Fox.
In an impassioned plea to members issued over social media channels this week, Fox warned that those pursuing the constitutional change via an extraordinary general meeting (EGM) risked winding the clock back to a time when the organisation was struggling for both relevance and solvency.
He said those seeking to pursue change because of their resistance to the Life Insurance Framework (LIF) risked winding back the clock.
“The actions being taken by a minority of members in relation to the Life Insurance Framework will bring a defining moment for the AFA. Either the clock will be wound back to the sorts of criticisms we received years ago in the Future of Financial Advice (FoFA) debate. Back to a time when we had minimal influence. Or you can choose to support the AFA Board, helping the Association grow further in respect and relevance,” Fox said.
“If an EGM is called, and if the resolution being proposed is subsequently passed, members will have a board that cannot fully exercise the rights to govern. The proposed change to the AFA Constitution would remove the ability of your elected member board to set the policy of the AFA,” he said.
Fox said the board would be forced to hold additional member general meetings to seek support before being able to agree or further negotiate terms with the Government, Opposition, minor parties and crossbenchers.
“This is akin to the AFA being asked to wait outside the room while the other parties make the decisions. The association would lose years of hard-earned respect and relevance,” he said.
“The resolution would also mean that the working relationship that the AFA and FPA have formed on life insurance would dissolve — the associations once again being divided and conquered, but this time from within. And just at the time when we need to also stay united on professional standards reforms to have influence with politicians, consumer groups, accounting bodies, academics and Treasury.
“The brand of financial advice has just begun to turn the corner with the public, with Government and with the regulator. Trust is increasing and we all owe a duty to protect and nurture this. It is fragile.
“Signing up to the call for an EGM may well be a protest vote against LIF, but the resolution it supports is a protest vote against the further advancement toward a profession and the AFA as a professional body.”
