A Victorian-based financial planner has written to the Financial Planning Association (FPA) querying whether the fees applying to the FPA’s proposed new structure would make it nearly three times more expensive than membership of the Law Institute of Victoria.
In a letter originally sent to the FPA and then sent to Money Management, Certified Financial Planner (CFP) Anna-Louise Brown pointed out that she currently paid $686 a year compared to a non-CFP financial planner — with the difference in price being reflected in the fact she was able to show she had a higher qualification.
However she said that under the proposed new regime she would be up for $900 per year — the result of being in the new Professional Practice category at $800 a year plus $100 a year for each practitioner.
“The Professional Practice category would be promoted in advertising campaigns as being the gold standard, (a bit like CFPS have been in the past),” Brown’s letter said. “Therefore, if I do not apply for the Professional Practice category, but remain a CFP, I would essentially, as I understand it, drop down to the second tier.”
Her letter said the FPA website had indicated there would be filtering so consumer could look for professional practices, something which suggested “if I remained merely as CFP, I would therefore miss out”.
“That would render the difference in benefits to me between being an [Accredited Financial Planner] and a CFP member essentially worthless in reality,” Brown’s letter said.
The letter then referred to the proposal to implement an advertising levy, which Brown presumed would most likely be used to promote professional practice, raising questions about why it should be imposed on planners not choosing to ‘be’ a Professional Practice.
“I trust that if becoming a Professional Practice, the $800 plus $100 a year would cover off CFP membership?” her letter asked. “Or would $686 CFP membership plus ($800 plus $100) plus Professional Practice plus $220 advertising levy apply?”
Update: FPA chief executive Mark Rantall responds:
"I would like to correct some facts. Brown is incorrect to say that her fees will be increasing due to the introduction of Professional Practices. The Professional Practice category is a new affiliate category that will enable local practices to carry the FPA Brand through a licensing arrangement. This is part of an overall strategic review that sees the proposed removal of the Principal Membership category that is the subject of an extraordinary general meeting vote on 7 April 2011. This vote will ensure that the FPA will be focused on individual professional practitioners and only practices with a majority of CFPs and 75 per cent of FPA members will be able to apply for a Professional Practice brand licence.
"There is not an increase to CFP or AFP fees other than normal increases approved by the Board from time to time. No member will be forced to apply to be a Professional Practice, although already the feedback has been extremely positive with over 320 Professional Practices preregistered.
"It is proposed to raise an advertising levy from 1 July 2011 which is to be used to exclusively fund an advertising campaign over five years to promote individual professional practitioners and CFP professionals. This is currently gaining very positive member feedback with over 90 per cent of members in support.
"The strategic plan, membership changes and the advertising concepts are currently being presented at our national road shows and we encourage all members to attend to see first hand what is being proposed," Rantall said.
