Just a matter of weeks after the industry was canvassing the possibility of a merger between the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) we have been witness to the re-emergence of one of the oldest debates in the sector — institutions versus independents and boutiques.
The assertion was made by an institutional spokesman that consumers were better off putting their trust in the majors because of the depth of their financial resourcing. There was an element of truth in what he said but a larger element of provocative humbug.
Move on a few days and there was the almost vitriolic response of some readers to concerns expressed by former Money Management Financial Planner of the Year, Neil Kendall, about high upfront insurance commissions resulting in the overselling of insurance products.
Once again, Kendall’s comments served to reignite a battle from the past — financial planners versus life advisers.
These incidents clearly demonstrate the thin veneer that has served to cover up deeply held differences within the industry — differences that serve to create ongoing negative perceptions.
What the incidents also reveal is the degree to which there are sections of the industry that continue to see the AFA as a natural home for life advisers, while the FPA is seen as the natural home for financial planners, particularly those willing to fully embrace fee for service.
Most disturbing for those advocating a merger between the AFA and FPA was the adversarial nature of the comments relating to membership of the two organisations — something that suggests neither organisation can lay claim to representing all sections of the industry.
There will be those who suggest that these recent disagreements between the institutions and the boutiques and the planners and the life advisers are a product of Money Management’s reportage. Those suggestions serve to simply shoot the messenger.
Until the industry can find a way of moving beyond the sectional and divisive issues of the past, it cannot hope to find a unified future.
