Under 40% of all adviser roles listed on the Australian Securities and Investment Commission (ASIC’s) Financial Adviser Register (FAR), or 7,716, are members of the industry’s largest professional body, the Financial Planning Association (FPA).
Wealth Data found by comparison, the Association of Financial Advisers (AFA) only had membership from 2,292 roles, or 11.88% of all adviser roles listed by ASIC.
In terms of peer groups, the data found that superannuation fund advisers (65%) were the most loyal to the FPA while across the financial planning groups 49% of all adviser roles were associated with the FPA, with a large number of licensees with over 50% membership.
On the other hand, the AFA had only 18% of all financial planning peer group roles but 6% or less across other groups.
Wealth Data’s director, Colin Williams, stressed that not all members of associations were current advisers.
“We have also relied upon the data in the ASIC FAR to collate the numbers and is only as accurate as what has been provided to ASIC via the licensees. The numbers do indicate that there is a diverse range of financial advisers who feel their needs are best served by one association over another,” he said.
Source: Wealth Data
As far as the adviser movements concerned, this week saw a further jump in net loss of experienced advisers to 37, driving down the overall number of advisers to new low and stopping at 19,003, just shy of breaking the new record of 19,000.
In May, Money Management reported that the number of advisers fell to below 20,000 for the first time.
Losses this week were driven by AMP Group which lost eight roles, including three at ipac, which according to Wealth Data now had 63 advisers, a fall from 108 on 1 January, 2020.
IOOF and Easton Group both lost five roles and there were four losses at Millennium 3.
Additionally, three licensees were effectively closed, translating into the loss of three advisers.
“This week we did see a big gap in the number of advisers that ‘switched’ in the week,” Williams added.
“Of the 71 advisers that ‘resigned’ only nine switched in the week to new licensees. This leaves 62 advisers without a role and this could be a timing issue with registering resignations and appointments at licensees via ASIC, but it is a much larger gap than what we would normally see.
“Of the 62 advisers without a current role, 25 are known to have passed the Financial Adviser Standards and Ethics Authority (FASEA) exam.”
Comments
I think advisers who have been around for a while would feel that their professional organisations have let them down. There has to be big money changing hands behind the scenes for us to be thrown to the wolves the way we have. In the case of the FPA I believe they were so sure they were going to get the "policing role" with the reliable funding that entailed that they didn't really give any attention to their members or worry about the declining revue from that source. Once it was announced Treasury was getting that role you could see panic set in, including the far too late resignation of Dante. The sort of "wins" announced by the FPA and AFA in the last few years in my humble opinion amount to being wrongfully imprisoned and having your representative lobby on your behalf to get coloured soap in the showers instead of white soap. I'm still in prison and you didn't listen to my concerns. For these organisations to survive in the futre they need to meet the following criteria:
1) immediately cease accepting any payments not directly from members.
2) channel the money currently used for useless advertising into a fighting fund with at least a couple of lawyers on payroll to defend our rights and where we are being wronged as a profession and practitioners.
3) actually listen to your grassroots members and not the elite adviser boards that are completely disconnected from the members. I've seen too much of this and it's why we are here today.
I will think long and hard again when my next renewal comes up and seriously review the value I get for my money, just like our clients do at every annual enhanced FDS opt in meeting. I stress this is only one person's opinion.
Spot on Duke and you've outlined some great points (especially around the fighting fund).
Dante has done nothing for the financial planning profession apart from taking a massive salary and watching from the sidelines as we got thrown under the bus!
I think your well articulated opinion may be held by a great many more than just one person Duke!
The FPA is doing one thing well... Marketing itself. There is no use in being a member of any of these association as they are self serving and scramble to take credit for legislative changes that favour Planners. Further to this (and this will annoy many).. the CFP designate is the biggest scam. This was proven when FASEA gave it as many credits as a Diploma! To say it's the height of Planner Professionalism when you achieve CFP level.... but still need to pay them almost $1000 a year to keep it!! is the biggest joke in the Planning industry. Don't even get me started on how embarrassing the AFA's is,... both membership bodies fail to mention that their designations, are nothing but a paid certification, it IS NOT a qualification! Not one client over my 20 years in the industry has ever asked about memberships/designations... they trust without the need to be sold
Associations are struggling to to stay relevant, particularly with the proposed changes with the TPB, given you'll now need qualifications to remain on the TPB, as the loophole in faking your way on there by being a member of the FPA will be well and truly shut down...
The FPA never ask for how I would like to be represented. Very hard for me to feel they represent me if they never ask or listen.... I just gave up on them.
The CFP course is actually a very high standard, and is recognised as such by many unis which offer up to 4 RPL credits for it. Some are also incorporating it as an elective in their Masters program. As someone who has completed the CFP course, the FASEA exam, and a Masters, I can vouch that the CFP Certification subject (CFP5) is by far the highest standard of all those.
The reason CFP has a credibility problem, is that the designation was given away to people with no more than DFP level education when the FPA first obtained the rights to CFP about 20 years ago. These people are the infamous "grandfathered CFPs".
The FPA should have forced these grandfathers to complete the actual CFP course when it was subsequently introduced. Unfortunately the FPA Board and management was, and still is, heavily influenced by these grandfathers who have used their organisational clout to cling onto their undeserved CFP designation without a commensurate level of education. This has diminished not only the credibility of CFP, but the FPA as a whole.
as someone who has a master's degree (more than 1), passed the fasea exam, and a CFP who did the full CFP program and the CFPC (capstone unit), I concur, the CFP 5 is a difficult exam to pass.
what is less widely known, however, is that the other modules in the CFP program are equally challenging, this is because they also require a much higher grade (70%) to pass than say compared to the CA program (AQF 8 Grad Dip) and CPA program (no AQF) which only require a 50% to pass.
what is unfortunate is that the FPA over time through various scandals in the past has been found to be guilty (by association) and as a consequence, anything the FPA does including its education offering which is of a very high standard suffers from poor perception and is held in disdain (fancy being called the head of the snake by the treasury, apparently that's what people at the Treasury think of the FPA)
it's unfortunate for many like you and I who have done the additional work to obtain the CFP that it is now largely tarnished.
But I rest in the fact that I did the work, and it's better than comparable qualifications that the accountants do, and if no one else knows or cares about it, it doesn't matter to me because I know how much work and study it required to pass it. my reward is the acknowledgment, delight, and acceptance by my clients of the very high fees I charge compared to other FPs.
as for the grandfathering, that is really not an issue worth bringing up time and again, those people had the highest qualification available at the time so it was natural to admit them as CFP's. by and large the cohort who were grandfathered are virtually all gone or will be in a few years.
this is not dissimilar to what the accounting profession has done. to qualify as an accountant today you have to do an AQF8 level course and 3 years of mentored practical experience whether that be through the CA ANZ/CPA/IPA but the accounting profession has about 20,000 practicing accountants who don't have a degree and were grandfathered. in fact, a very well know person of great repute who sits on the boards of very large publicly listed companies and who was formerly the managing partner of a Big 4 firm doesn't have a degree. but he is very old :-) and now retired. and that's just fine.
if you have 10 years of practical experience it's similar to the knowledge gained from a bachelor's degree anyway so it is stupid and nonsensical to argue that people with 20 years of practical experience in the profession should go back to study and this is coming from someone who has multiple advanced degrees.
Sorry, but I just don't accept this argument that a DFP was the highest qualification available to financial planners 20 years ago. Degrees in related disciplines such as economics, finance, accounting, maths, psychology, law, and many others were readily available, and a much higher standard. They were also reasonably expected of anyone offering a professional service of any sophistication at that time. Yes, planners at the time should also have completed the highest available specific vocational qualification, which was the DFP. But any planner claiming to be of CFP standard at that time should have had a degree as well.
The FPA finally caught up to this in about 2010, when it required a degree (in any related discipline) as a CFP prerequisite moving forward. But degrees were standard amongst professionals long before the CFP started in Australia, and should have been a prerequisite right from the start.
The FPA's failure to show leadership in setting an appropriate professional standard 20 odd years ago, is one of the reasons for the clunky, interventionist, FASEA regulation we have all been lumped with now.
The reason the CFP brand is worthless is not because of grandfathered CFP's it's because of the FPA itself. It's pretty obvious the FPA is more about representing AwareSuper then actual Advisers and Australians. They for example will never call out AMP/ AwareSuper/ Hesta and stand up for those individual advisers out of fear of biting the hand that feeds them.Those parties all have different needs. The FPA was called out at the Royal Commission as being unable to be a Code Monitoring body and this has lead to greater regulatory intervention. The FPA lost us the opportunity to self regulate and yet the Board and CEO remains and you seem quite happy with that. Rather than blaming advisers with 30 plus years of experience, with happy clients, why not have a look at yourself. You continue to cling to three little initials and are quite happy to sell out your peers, by paying fees to a body that wants to be all things to all parties. Has not imposed a single fine, sanction, penalty on any of it's professional partner program members. This lack of proper advocacy and representation has ultimately lead to ordinary Australians being priced out of advice and Advisers being blamed for the sins of others, and you're happy with that for the sake of three little initials. The FPA has made the CFP brand a laughing joke in this country.
"In terms of peer groups, the data found that superannuation fund advisers (65%) were the most loyal to the FPA"
It's easy to see the FPA has sold out the smaller Planning practices in return for $$$ and the subsequent lobbying of the government for carve outs for industry super members and other call centres.
The FPA don't represent Advisers solely, nor Australians and therefore they can't be effective. They represent the Barefoot Adviser, The large Super fund, and yes Planners also....But I think AMP is big and ugly enough to look after itself.....FPA members need to be very aware that to indirectly quote Dante "we just don't represent Advisers we have to represent all participants in the financial services industry equally and that includes representing the needs of Industry Super funds too".....A classic example is complaints to the ombudsman against Advisers is less than 1% it's majority product providers, but the FPA can't raise this out of fear of upsetting and not advocating for those other parties. I don't understand why members of the FPA put up with that.
I've never been a member of any of these ticket clippers.
The FPA do not represent Advisers. We voted that away when they became an "Industry Association." I would give up my superannuation to be able to reverse that vote.
Save your money and don't bother renewing memberships
I wonder how many advisers continue their FPA membership for the sole purpose of retaining their CFP designation? I'd hazard a guess that it's a fair percentage of members.
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