Designations are also about consumers
It iseasy to see both sides of the argument in what could quickly escalate into a full blown legal dispute between the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) over financial planning designations.
On the one hand, the FPA has every right to protect the designation it has spent so long promoting. On the other, the AFA has every right to try and build a designation of its own of equal credibility.
Both groups have every right to generate revenue from selling education courses and other services attached to their particular designation. However, what such arguments fail to recognise is that there is a third voice that needs to be heard in this dispute, that of ordinary every day consumers of financial planning.
As well as the FPA’s CFP designation and the AFA’s proposed ChFP, there are a range of other designations available to financial planners operating in Australia, including CPA Australia’s mark, the Financial Planning Specialist (FPS).
This is confusing enough to people involved in financial planning, let alone the thousands of people every year who try to choose an adviser they can trust to do the right thing with their hard earned savings.
There is no doubt that for these consumers, having one single designation to certify all financial planners throughout Australia is the ultimate outcome.
The question is, in a situation where we have a range of professional associations catering to financial planners (often in a competitive atmosphere), whether that will ever be the case.
Perhaps then it is time we started talking about professional associations relinquishing the right to distribute financial planning designations to groups who would be considered more impartial, like the Government regulators.
An interesting aside in all this is the question over whether groups such as the AFA and FPA should be professional associations promoting training and compliance issues, or industry associations working at lobbying Government and regulators over issues affecting their members.
If a regulatory body, like the Australian Securities and Investments Commission (ASIC), was made responsible for administering a single valid financial planning designation in Australia, you can bet advisers would cry foul about how achieving that designation had suddenly become more onerous.
The real question, however, is whether it will be a better outcome for consumers. If the answer to that question is yes, the professional associations representing the financial planning industry in Australia have two choices: either they can work together to achieve a single valid designation for Australian advisers, or they can hand over control of financial planning designations to someone who can.
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