Time for industry groups to merge: Matrix
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Adviser-owned dealer group Matrix Planning Solutions has called for the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) to become one entity.
The suggestion was made in an open letter from the board of Matrix to the boards of the respective associations.
“Our current lack of unified effort has confused Canberra and could disastrously result in fragmented, poorly structured legislation which we would all have to live with,” the letter states.
Matrix wants to see one association that represents the interests of financial advisers, as opposed to both advisers and other stakeholders, including Australian Financial Services Licensees.
“With respect to the members of each association who represent institutions and product providers, their interests are represented elsewhere, at [the Association of Superannuation Funds of Australia] and [the Investment and Financial Services Association].”
The directors of Matrix acknowledged that the creation of a strictly adviser-centric association would require the dealer group to become a member of a different association at a licensee level.
The letter, signed by Matrix managing director Rick Di Cristoforo, argues it is “nonsense to foster a culture of two competing and separate associations”. He pointed to the different “cultural roots” of the associations but said these could be overcome.
Matrix considers the FPA’s strengths lie in governance and the setting of professional standards, while the AFA’s strengths lie in the development of client facing skills and encouraging younger advisers. Matrix believes the differing strengths of the associations would be complementary in a combined entity.
“Rather than operate separately, with competing training, accreditation and professional recognition programs, these two bodies should merge and build on these strengths,” the Matrix board urged.
FPA chief executive Jo-Anne Bloch is now in her final weeks in the role, with the FPA board now searching for a replacement.
“Before the FPA directors make a final decision on replacing the departing chief executive, we call on both the FPA and AFA bodies to hold urgent talks to see if we can bring the strengths of both organisations together in a truly representative single association,” the letter states.
In its letter the Matrix board also makes a case to shift the public debate away from remuneration methods and onto the provision of client-focused advice in a transparent framework.
The AFA, currently led by Richard Klipin, emerged from life insurance origins and continues to have a high proposition of its membership specialising in that area. The FPA is the dominant industry body with membership of over 11,000 and has been considered the leader in terms of setting policy and raising industry standards.
However, the FPA has been considered by some to be too broad a church, in that it represents the often conflicting interests of financial advisers and their employers.
The AFA offers a Fellow Chartered Financial Practitioner (FChFP) designation, but the FPA’s Certified Financial Planner designation is dominant. The FPA also recently introduced a ‘Life Risk Specialist’ designation.
See this week's Money Management for the full letter.
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