FPA's half a million reasons to restore licensee relationships

16 June 2020

The Financial Planning Association (FPA) has more than half a million reasons to restore its good relationship with the licensees which pay for “Professional Partner” status.

Amid declining adviser numbers across the industry which have inevitable flow-through effects to revenue lines such as the Certified Financial Planning (CFP) designation, the Professional Partner program added $536,000 to the FPA’s balance sheet last financial year.

And even then, the most recent FPA annual report showed that the number of licensees which had paid to be Professional Partners had declined from 83 in 2018 to 70 last year, meaning revenue had dropped by $73,000 in 12 months.

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The decline in Professional Partners was attributable, in part, to changes in ownership and the closure of a number of licensees.

The scale of future membership of the Professional Partner program has been put in question by licensee concern at the FPA’s proposals for an adviser registration regime which would effectively supplant authorised representative status under an Australian financial services license.

Six licensees, five of which were Professional Partners, earlier this month expressed concern at the FPA’s proposals and what they saw as a lack of consultation around policy development impacting AFSL holders.

While the FPA’s Professional Partner program declined in value to $536,000 last financial year, this paled beside the decline in the returns generated by its CFP program from $2,319,000 in 2018 down to $1,269,000 with a further decline expected this year as a result of adviser focus on the Financial Adviser Standards and Ethics Authority regime.

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I’d be interested to hear others’ thoughts on why any new entrant would consider CFP in a post FASEA world. Once they have a degree in Commerce/FP next step for most would surely be Masters of FP rather than CFP I’d assume? If so that doesn’t bode well for the FPA’s balance sheet.

If new entrants have an undergraduate degree in Financial Planning there is no reason to do a Masters of FP. The content and complexity of a coursework Masters is not significantly different to a Bachelors. The Masters is just shorter and more focused. It is designed for people who have completed an undergrad degree in something else. (Or who have advanced standing due to professional experience.)

CFP 1-4 subject equivalents are now included in FASEA approved degrees, so that component of CFP is becoming obsolete. However one reason new entrants should still complete CFP is the CFP5 subject. It is a comprehensive exam and assignment covering a wide range of technical disciplines. (The FASEA exam covers regulatory matters). CFP5 is harder and more comprehensive than individual subjects offered in either a Bachelors or Masters of FP. Completing it demonstrates a higher level of technical proficiency than someone who has only completed a degree. Similar to chartered accounting or medical specialty exams.

Yes, I am aware FASEA didn't give the CFP program full recognition. That decision is just one of the many things FASEA got wrong. Surely no-one needs to explain to readers of this publication how biased, conflicted, and incompetent FASEA is?

Having completed both the full CFP and a M FinPlan I can attest that both are equally as comprehensive as each other. The only discernible difference is that the former examines the content from a more practical point of view whereas the latter is more from an academic slant. Also - the general public inherently understands the concept of a Masters and what is required to obtain this qualification compared to a CFP designation. Don't take my word for it - ask your clients the following question - would you prefer to have your financial future managed by an adviser with a M FinPlan or an adviser with a CFP? The clients will usually respond with a question of their own - and that question will tell you all you need to know about the public perception of a Masters versus CFP. The other issue that has not been addressed is the fact that once you obtain a M FinPlan qualification - you get to keep that qualification for life. With a CFP designation you must remain a member of the FPA to be able to use the post noms. What happens if you decide to drop your FPA membership? You are no longer entitled to use the CFP mark? Hardly seems fair does it? My advice to new entrants is to do your own research - talk to advisers who have experience in the field. From my 30+ years of experience - clients don't care about your qualifications/designations/post noms - they just want to know that you care about them and their families and that you have their backs when the sh*t hits the fan.

A Masters of FP may have more cachet than CFP for someone who doesn't already have a degree in financial planning. But all new entrants will already have a FP degree. For new entrants it makes more sense to obtain a professional designation to supplement their degree. I would prefer my accountant to have a B Comm and CA, rather than B Comm and M Comm. The former gives the impression of someone with a good balance of study, assessment, and experience. The latter gives the impression of a slow learner.

Chalk and cheese FPA Scum. 1) CPA Australia dosen't get these payments from institutions that have damaged the advice industry. 2) CPA only takes members that are accountants, retired members, students academics. Nor do CPA Australia get payments from Xero, Quicken or Casio Calculators, call them member fees and they certainly don't allow those firms to be members and call them professional partners. 3) CPA Australia, don't give you a discount just because you work for Xero Software. 4) The CEO never appeared at a Royal Commission and was told you can't be trusted to self regulate. It's the dregs of the advice world (you) that are leading to Advice dying out. Ask your Doctor if the AMA get payments from Thalidomide Pharmaceuticals and obtains a discount based on the Drug firm they work for- yet it's all ok for the FPA.

You are aware Accountants can purchase bulk software such as Quickbooks for a fee and on-sell these to clients for a higher fee?

your post makes no sense.

the CA is a 5 Unit graduate diploma and at AQF level 8 - according to the AQF framework graduates have advanced knowledge

the m.comm is a masters degree, 12 units at AQF level 9 - according to the AQF framework, graduates have specialized knowledge, and skills for research

I know who I'd deal with, someone with specialized knowledge this is why all the major accounting bodies are now nesting their professional qualifying programmes within a masters qualifications (CA ANZ through MQU, and UWA, IPA through Deakin, CPA should follow soon)

FYI - see I have an m.comm, specialised knowledge and research skills

If don't think the Commonwealth Financial Planning (CFP) mark is all that it's cracked up to be. Oh wait you mean the other CFP. They give that out to people who highest qualification is RG146 a Diploma. So CFP is a symbol of minimum standards.

"the Professional Partner program added $536,000 to the FPA’s balance sheet last financial year."

Seeing as this publication is for people who should know better, it would be appropriate that this said it added $536,000 in revenue, or "to the Profit & Loss statement". Revenues don't go straight to the balance sheet unless you magically operate an expense-free business.

Good point Paula. It also raises the questions of whether the "returns" quoted for the CFP program represent profit after expenses, or gross revenue. The CFP education program is largely outsourced, so one assumes most of the CFP revenue goes straight back out to third party providers such as Deakin.

who cares. It's a conflict. I don't see the Australian Medical Association getting cash payments from drug firms. No wonder we are so over regulated and with that simplistic attitude you're contributing to the problem.

The professional partner program should be scrapped as a conflict of interest. Either the FPA looks after its practicing members,, licencees or consumers. I don't see how the FPA can support all 3 and not be conflicted. Which is maybe why we are where we are. Pick who you want to represent and represent them.Make a statement, have conviction and move on.

or they are just a union type organisation that blindly defends all the bad apples or poor conduct. They wouldnt be helpful for anyone. In the end, for its shortfalls, the FPA has done a lot of good over the industry, if you compare them not being around at all.

Many of the FPA "Professional Partners" are small practices with employed advisers. There is no reason to assume they would be threatened by the FPA's proposal for removal of licensees. Unfortunately the FPA will probably try to use this as a rationalisation to keep the program.

The problem is, too many "Professional Partners" ARE licensees with inhouse product. This creates the perception the FPA is conflicted, which in turn undermines the FPA's credibility and effectiveness as a lobbyist. For the sake of all members, the FPA needs to get rid of the Professional Partners program. Even if the program does have some legitimate benefits, the perception of conflict it creates is doing far too much damage.

The FPA should move to a model of individual members only, who should pay their fees directly rather than through their licensee. Not unlike the new adviser licensing model the FPA is proposing. Lead by example.

So, in other words, 1,000 new AFP members would be enough to supplant this conflicted, pointless stream of revenue to a professional association?

It’ll take 1,000 advisers to realise the sense and future inherent in their proposal to render the complaints of the “Professional Partners” void?

Well, make it 999 - their proposed policy convinced me to join for the first time in my career.

Let the snouts squeal into their trough - time for the actual advisers to re-take this industry and make it a profession.

Bring it on.

You guys can't even negotiate an extension to a FASEA exam in a National Pandemic. Surely it's time to move on.

For decades they bundled these fees up, hid them and called them members fee. I question the ethics of any person who is a member of the FPA. The PPP causes a conflict, (whether perceived or actual) and a nice little $60,000 a year payment plus a list of members names results in an organization that is ineffective. You cannot possibly support the FPA and want to lift professionalism, reduce red tape and compliance and support an organization that clearly dosen't know whether it represents the adviser or the licensee. Goodbye FPA. Could the last member turn off the lights.

New entrant and recent finance graduate here. I'm happy to complete my Master's and never get the CFP designation. There doesn't seem to be any point considering the CFP program when a Master's is the highest coursework degree - the Australian Qualifications Framework in this respect would agree.

I do not think clients really understand what a CFP is (or would put it on par with the CPA for an accountant) but would generally feel like it is outranked by a Master's at a reputable university.

Can the CFP with only 5 units (only one more than a Graduate Certificate) be reasonably compared to a Master's with 12-16 units? The CFP may have a capstone unit, but so do the Master's and some also require a thesis. A Master’s is about 2 and a half to 3 times as much work and is at AQF 9.

My opinion is that the Master's shows more dedication from an education standpoint while the CFP; going forward, is for new entrants who do not want to spend the time or money on a Master's but want something to stand out from the people who did neither.

Personally, I do not see the point for a new entrant to be chasing the 'Certified' part in 'CFP'. We have the FASEA exam, the 1 year work log and all the new education requirements - that's what certifies people in Australia.

In 20 years that I was a member not a single person ever came to me because I was a member. 20 years of wasted membership on the hope one day we'd be a profession and we ended up with a Royal Commission and the FPA is still in the pockets of large insto's. Get a real qualification from a real institution that is recognized and don't go near the CFP. Publications like this one used the initials CFP to refer to Commonwealth Financial Planning for decades, so it's a total waste. Hopefully you'll stay clear of the FPA. Just join the cheapest body and spend your money on real education.

If you have recently completed a finance degree, and think that a Masters in FP is going to significantly enhance your knowledge and standing, then it must have been a really crappy finance degree.

As an employer I would much prefer to hire someone who has shown the ability to get a good quality undergrad degree, and can apply themselves on the job. I'm not interested in someone with a long string of second rate degrees from glorified TAFE colleges.

Hi Anon,

This is a simple comment to address. I completed my finance degree last year and the minimum requirements as per the FASEA website are a Graduate Diploma in Financial Planning - that is the minimum for me to move forward in becoming an adviser. I've been employed in the industry for years already and it has been unfortunate timing with the RC. Thanks for the advice anyhow.

So you're not actually a new entrant, and you didn't actually complete a finance degree.

For someone already in the industry whose only academic qualification is a Grad Dip FP, yes it makes sense to do the extra subjects to convert it into a Masters. But that is a completely different situation to a new entrant coming in with a proper degree.

Anon, I'm sorry but you are being completely incoherent.

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