Home / Industry / FAAA resets strategic priorities for new advice era, with growth on the agenda

The merged association has added a new core driver to its strategic objectives for the next six years, with growing the profession now a top priority. But the inherent challenges, and past failures, are forcing the FAAA to try new ways of getting more advisers on the books. 

Back when the Financial Planning Association and the Association of Financial Advisers were two separate entities, the advice industry was in a very different place. In 2024, as the newly merged Financial Advice Association Australia resets its strategic priorities, it follows that the group’s drivers are similarly changed.

Members still come first, chief executive Sarah Abood explained on a webinar to update members this week. That has always been the case at both the FPA and the AFA.

Advocacy has also been retained as a strategic priority. No change there, as representing the industry and fighting for the profession’s best interests among politicians and other stakeholders has always been a firm value pillar for the association.

It’s what has changed, however, that’s a topical reflection of the industry today. Gone is the FPA’s former focus on consumers and the AFA’s old focus for professionalism.

In their stead, the new FAAA has reacted to declining advice numbers by putting growth on a pedestal and added it as an integral third pillar.

According to Sarah Abood, the association’s chief executive, the addition of growth in the strategic objectives is a clear reflection of where the industry is today; with adviser numbers plateauing around 15,500, down from almost 30,000 in 2019, the need for more advisers is paramount. The quantum of advisers in the country is “nowhere where it needs to be”, she said.

“We’re all very aware that our numbers have declined very substantially. We’re down, I think, 46 per cent now from our from our top in 2019 when it peaked, and we know that there are nowhere near enough advisers to serve existing demand. We really need to grow again the numbers of professional financial advisers, and that’s what’s needed in order to allow more Australians to have access to that service.”

The FAAA’s newly ratified focus on growth is a driver not only for the industry, but its own purposes. While the 2019 peak adviser numbers were somewhat artificially inflated by a quirk in the education requirements, it’s inarguable that the association(s) had a much more robust industry cohort to support its existence than it does today. With less advisers, and by extension less funding, the consolidated FAAA has less ability to perform its other core functions, in particular representing adviser interests on policy decisions – an area it has been extremely active in recently as the Delivering Better Financial Outcomes reform suite rolls out.

Yet building up the adviser base is problematic, hampered by higher education standards, a still-convoluted regulatory system, increased costs associated with the adviser levy and compensation scheme of last resort, plus lingering reputational damage from the Hayne royal commission.

There are considerable tailwinds aiding growth, however. There is tremendous demand, fuelled by a burgeoning superannuation system tipped to hit $4 billion by 2026, over $1 billion of that held within self-managed superannuation funds. The DBFO reforms promise a modicum of regulatory reform and the reputational damage from the royal commission seems to be abating, albeit with the Dixons Advisory scandal slowing this development.

To this point, growth has been slow, with the focus on harvesting new entrants from the graduate community proving insufficient. Financial advice does not have the profile it requires in the university system for this channel to fill the gap alone. The approved pathway system into advice is also seen as cumbersome by some.

“[The] professional year is an area where we know we’re losing people at the moment,” Abood said. “We hear from some students who can’t secure a professional year placement, and we hear from many employers, particularly small business advisers, that that professional year requirement is a real hurdle and makes it quite difficult in some cases.”

While the FAAA works on ways it can smooth the transition to advice for graduates, Abood revealed the association is also extending its growth focus to another avenue – returning advisers and professionals from other industries who want to join (or re-join) and industry that has incredible demand.

“We need to provide pathways for new advisers as well as returning advisers, because we we do get regular calls from advisers who might have left, but they’re looking to come back in,” Abood said. “We’re not just focusing on students when it comes to new planners, we’re also focusing on career changers. We know that many advisers had successful careers in another field beforehand, and we think that that’s a really important source of new planners for the future, building the pipeline.”

That pipeline also includes international opportunities, Abood said, noting that there were a lot of potential advisers of Indian descent given the region’s strong affinity with the Financial Planning Standards Board.

Further, she continued, the FAAA is launching its own advice academy, which aims to “centralize support for professional year candidate students and their employers, mentors and supervisors, to really help make that professional year”.

According to FAAA chair David Sharpe, who is also a registered adviser with his own practice in Perth, the need for growth cannot be discounted.

“If we have the headlights on our bike just looking down at the rocky path we’re currently riding on, we might miss the cliff that’s coming, and that’s the declining numbers of our profession,” he said. “If I could be blunt, it’s an existential threat to financial planning if we don’t reverse that more broadly.

“If you’ve got a business and you need staff in two or three years’ time, it’s absolutely going to be impacting you.”