Financial Planning Association in the red
The Financial Planning Association (FPA) has recorded a before-tax deficit of $542,670 for the year ending 30 June 2011, according to the newly released annual report.
The closure of its Melbourne office, significant restructuring costs and advertising levies over the past 12 months combined with the FPA's revenue sliding down from almost $11.3 million in 2010 to $10.8 million in 2011, led to the association incurring an overall loss.
The decrease in revenue, according to the FPA, could be attributed to a 6 per cent decrease in conference and seminars revenue and reduced enrolments revenues from the previous year for the Certified Financial Planner designation.
A very large revenue decrease came from almost half a million dollars in lost sponsorship and contributions for the Value of Advice advertising campaign made by FPA Principal members. The FPA no longer offers principal membership, as voted by existing members at last year's annual general meeting.
The main reason the revenue was down, however, was due to the FPA removing its Chapter accounting from the reports, according to chief executive officer Mark Rantall.
"The Chapters run many events in their local region and a decision was made to allow them to carry over any surpluses from one year to the next, and therefore they will no longer have an impact on the FPA operating accounts; other variances are minor and reflect fluctuating operating conditions."
Despite the revenue loss and a reported deficit, Rantall said the association's financial position remained "very strong", with more than $5.8 million in member funds as reserves.
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