Costs for the compensation scheme are spiralling out of control, with the FAAA estimating another $4,165 will be added to every adviser’s CSLR bill – bringing the estimated total to $5,709 – if the funding model isn’t re-examined.
Real estate credit funds have firmed as an attractive source of alternative returns in the past few years. What matters, however, and what doesn’t, for these non-bank private credit lenders, has largely been left unexplored by investors. Â Â
‘Now’s the time’: FPA, AFA announce merger plans
The Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) are finally set to merge after the steep decline in adviser numbers, the Quality of Advice Review and the need for a united voice forced the hand of the two representative groups.
On Thursday the two associations, which have been working closer together in the last two years on both an ad-hoc basis and as part of the Joint Association Working Group, invited members and stakeholders to provide feedback on a mooted plan to unite in 2023.
A merger would add 3,200 AFA members to the FPA’s roughly 10,000 members, though the combined number is expected to fall below 13,000 due to several hundred dual members.
FPA chief executive Sarah Abood is slated to retain her role in the combined association, with AFA chief executive Phil Anderson becoming become the general manager responsible for the transition.
Both associations’ education programs will continue to be recognised, but only the FPA’s Certified Financial Planner designation will continue to take new applicants according to Abood.
“In terms of the designations the qualified financial planner designation, the CFP [Certified Financial Planner], will be the primary designation for the merged association,” she told media on a scheduled call. “But advisers who hold other designations such as the FChFP [The Fellow Chartered Financial Practitioner] and the ChLP [Chartered Life Practitioner] will be continue to be supported.”
The new board of the proposed entity will be roughly pro-rated across the two associations.
“We will have eight FPA directors and four nominated AFA directors,” explained AFA president Sam Perera. “The FPA would name the chair and the AFA would nominate the deputy chair. And that will be for a period of… three years. And then after that point, all eligible members of the merged entity can stand for election for election.”
‘Now’s the time’
Representatives of both groups spoke of the decline in adviser numbers since 2018 and the effect it has had on the industry, as well as the need for united representation to government in light of the Quality of Advice Review and the Australian Law Reform Commission’s ongoing review into the Corporations Act.
Earlier this week Quality of Advice Review leader Michelle Levy revealed dramatic changes were in store for advice, with her draft proposal including the abolition of SoA delivery and Best Interests Duty.
“There’s some significance here with Quality of Advice Review and the ALRC review,” said FPA chair David Sharpe. “Now’s the time. That’s why we’re coming together to have that single united voice for the profession. So we can advocate so we can go to the minister and say, we’re in agreement here.”
At least three quarters of voting members must agree to the merger for it to go ahead, Abood said.
“We’re opening a period of consultation and we’re really keen to hear from our members on both sides around what’s important to them,” she continued. Are they in favour of the proposal and what’s important about that emerged association? Unless 75 per cent of members on both sides vote for this, it won’t happen. If it does go ahead, it will be with full support from membership on both sides.”
Members of both groups will be invited to upcoming webinars to ask questions and provide feedback on the proposal.
FPA members will also be able to attend the AFA Conference on 21-23 September at member rates, while AFA members can attend the November FPA Congress at member rates. A joint session of the AFA and FPA will be held at the AFA Conference.
