Tax reform, new licensing laws and an added emphasis on professionalism and training is a turbulent time to become chairman of the Financial Planning Association. Jason Spits talks with John Hewison about his plans at the helm.
John Hewison is keen to dispel the myth that if someone stays in a place long enough they end up in a position of authority purely because they are still there.
Hewison has a vested interest in dealing with that furphy as he will take over the role of chairman of the Financial Planning Association (FPA) later this year, after 10 years involvement with the group.
“I don’t think it is a case that if I’d stayed long enough I would be elected to the chair. This is my second and final one year term as director and I have to retire from the board and I felt this was a good final move before stepping down,” Hewison says.
He has been a member of the FPA since inception in 1990 and was on the State Council from 1994 to 1998. He is still actively involved as chairman of the Victorian Principals Forum, a position he has held since 1993.
In making this final move Hewison is keen to pursue a number of issues and hopes to follow them through but is well aware that as chairman his role is heading up the board and representing the views of the board and FPA members.
“One issue is the process of communication with members. Policy decisions are a bottom up process so the association wants to get our communications to a level where members feel they can give input,” Hewison says.
“We plan to get our database up to speed as part of this and that is in process now. We also want to target other areas such as the delivery of services and the strategic direction of the FPA through active feedback.”
Hewison says the coming changes under the new CLERP legislation and continuing education – it’s role and its place for different member categories – are still major issues the association needs to deal with in coming months.
“These are not make or break concerns but need to be tackled to ensure the FPA keeps its position as the pre-eminent body in the industry, and to keep pace with trends and delivery of services,” Hewison says.
“The critical issue remains: the establishment of credibility based on education and professionalism.”
The reason this still remains a core issue with the FPA and Hewison is that it is seen as a vital way in which the future of the industry can be influenced.
Planners and the FPA have a voice with the government and regulators, according to Hewsion, since it can see an obvious effort being made to lift standards and direction.
“We have input on legislation and that is the critical success of the FPA,” Hewison says.
He also points out that this is a far cry from where the industry stood when he began working in financial services back in 1985, after “coming across financial planning by accident.”
However he says that even at that stage the need for an industry body was evident.
According to Hewison the industry in the 80’s was pretty avant garde, not in a terribly good way and needed a body to drive these issues of education and professional standards.
Hewison joined the precursor bodies to the FPA and gained an understanding of the roles they played mixed with his own experience coming from a corporate management background.
But it was the roll out of the Diploma of Financial Planning (DFP) in 1993 which prompted Hewison to see the impact of education and professional standards.
“As soon as the diploma was launched the writing was on the wall. Planners without qualifications would be forced out of business and that was a huge strategic issue,” Hewison says.
The FPA is now on target for the base standard, the Certified Financial Planner (CFP), to be held by all practicing planners by 2003 but Hewison says the task now is to deal with the needs of other financial services professionals moving into the planning industry.
“How do we cater for new entrants such as specialist life writers and superannuation writers? The FPA has to cater its education and membership packages to deal with these colleagues and with the changing face of the industry it has become even more pressing now to do that,” Hewison says.
But he says the FPA will not be pressed on finding a new chief executive officer after the departure of Michael McKenna earlier this year.
As reported in a recent edition ofMoney Managementthe FPA has appointed an executive agency to seek someone to fill the position but insisted on taking the appropriate amount of time to conclude the process.
“We hope to find a CEO appropriately suited and who will stay with us for a number of years as continuity is important,” Hewison says.
“But it must be remembered this is the role of CEO in a mid size business organisation with a member base and interaction with government and industry.
As such it is diverse and the FPA is determined to get it right with the right person and so we see no need to hurry.”
Hewison has his own practice, Hewison and Associates in the Melbourne suburb of South Yarra and says that his own business will have an impact on his role as chairman.
“I suppose it must, but I will try to keep my own planning beliefs separate and appropriate for the FPA membership which is very wide with different profiles,” Hewison says.
“As such the FPA would take a broader view with policies across the board in areas such as fees and the issue of disclosure but it is not our role to impose those.”
The regulators have insisted on disclosure and the FPA has circulated a set of guidelines but will not tell members how to run their business, according to Hewison, who says the FPA will apply standards but not dictate on issues.
“The board has passed a revised policy on disciplinary procedures and co-ordinated a compliance regime. As a result all principal members can be expect to be audited over the next two years,” Hewison says.
“There is no point in having standards if we can’t monitor them, which is something expected from the regulators.”
The influence the FPA has had on regulation already passed has been of advantage to members Hewison says. But if the FPA doesn’t exert this type of influence on regulation it is likely to be of the type that members will not like.
“The FPA standards are higher than the regulator and therefore by default are higher than the law, so by default this is a form of self regulation,” Hewison says.
“While the steps to self-regulation are large and costly, if the proposed changes under CLERP 6 go through in it’s present form it will be an issue we have to address with some urgency.”
While the FPA is still heavily involved with the government over the definition of standards for the Declared Professional Body requirements, Hewison says this issue is one of those areas central to its role.
The FPA feels the requirements go against the concept of equal licensing under CLERP 6 and are a backward step.
“We’ve come a long way with standards and this is important to the FPA and it would be inappropriate now to step away.”
