Your latest editorial reports FPA-member driven changes as some sort of ‘shock horror’ scandal. All the FPA is guilty of is methodologically and competently executing a strategy that over 90 per cent of their members approved nearly six years ago.
‘Hunter becomes the Hunted’ is a wonderful polemic if your aim is to increase website clicks and tilt at windmills. But, as a considered critique of an organisation that is unashamedly dedicated to advancing professionalism in financial advice, it is less accurate than a Trump Inauguration headcount.
Nearly six years ago, FPA members voted for a radical change. Dealer groups actually voted themselves out, and in the highest turnout in the organisation’s history, 94 per cent of members chose to put the public interest ahead of their own. They willingly chose to fund an organisation that, if push came to shove, would look after the punters ahead of the planners.
This was a critical first step to filling the ‘ethical gap’ of peer accountability that was needed if financial planning was ever to achieve professional status. I might live a closeted existence, but I’ve yet to meet an adviser that thinks that increased professionalism is a bad thing.
Right now, financial planners are indeed struggling under the weight of increased and demanding red tape. Why? Because regulation is the only medium our lawmakers and regulators have as a proxy for quality. Meet the form of good advice and, hopefully, you will meet the essence of it as well. You don’t have to be particularly experienced as an adviser to know just what an inexact correlation this can be at times.
ASIC itself has recognised that ‘ethical gap’ of peer accountability needs to be closed. You can tick a box, but you can’t fool your fellow advisers when it comes to bad advice. Having a professional association as a co-regulator alongside government is a necessary structure, as we see in the medical, legal and other professions.
The days of dealer-hopping and association-changing are numbered. Soon, you won’t be able to practice as a planner if you aren’t a member of an association with an approved code. As a start, the FPA is the only body with an ASIC approved Professional Ongoing Fees Code.
Contrary to the claim that the FPA has helped increase red tape, members who abide by the code reduce it. ASIC have accepted that the ethical oversight of the FPA over its members is a more efficacious means of delivering quality assurance than its regulatory approach. But to get it, you have to hold yourself accountable to your peers. Are you good enough?
This isn’t hyperbole or contention – this is fact.
The FPA’s Conduct Review Commission might be ‘Soviet-sounding’, but every member can tell you that it operates with ‘glasnost’. The members of the CRC (which includes an independent barrister as chair) are clearly disclosed and its term of reference and processes are available for download for all to see.
The individuals recently censured aren’t the first to be held to account for their behaviour. Each year there is a detailed report on the activities and disciplinary actions of the CRC. What has changed? Now, it actually means something to be expelled from the FPA. Toothless tiger, no more.
Let’s just address quickly too the ad hominem relating to Mark Rantall. Anyone who thinks chairing a dealer group is cushy, either doesn’t know too much about dealer groups or indeed about the responsibilities of corporate governance. Full disclosure: I sit on two boards with Mark, and I was on the FPA board when he was CEO. There are few people who have worked as hard or with the skill as Mark for the advancement of financial planning. Don’t like how FOFA or the LIF turned out? You should have seen the versions that would have played out without the FPA and Mark arguing long and hard.
And it’s ironical that ifa calls the FPA ‘out of touch’ with its members. Six of the seven practitioner directors (in a 9 person board) are ‘non-aligned’, outside of vertically integrated networks. Maybe the real ‘single biggest issue’ is separating of product from advice, rather than vertical-integration?
The FPA does not prevaricate about its purpose, though it is a bit more nuanced (as life usually is) than the ‘either/or’ situation that ifa posits. Number one role of the FPA: ‘Represent the interest of the public’. Number two? ‘Represent the interests of members’. Believe or not, they can do both at the same time, but yes, if there is a conflict the FPA will put the consumer first.
Best practice trumps the people who pay the bills. Sounds like a profession, doesn’t it?
I think ifa needs to decide whether it wants to continue to take cheap shots from the sidelines or instead acknowledge the sort of hard, unglamorous work that the FPA has been doing for many years in order to build a profession that will improve the lives of our fellow Australians. Only one of those paths has any credibility with the public.
Patrick Canion is the CEO and part owner of AMP-aligned ipac Western Australia and a director of Intiger Group Ltd and the Future2 Foundation Ltd.
Well said Patrick. I wish the Anonymous would give his real name when posting comments as he is no better than the trolls on Facebook who also won’t give their own name. I have been a member of the FPA since 1994 and am a director of a non-aligned dealer group. Dealer groups are no longer permitted to be members of the FPA nor their representatives be on their committees. You don’t; actually have to have a university degree to give tax advice. Look at H&R Block employees. Get your facts right before you criticise the FPA.
While you are going all Mikhail Gorbachev on us Patrick, why don’t you recommend some Perestroika at the FPA. A good place to start with this would be a hint that they aren’t just a puppet to the big institutions. Just some comment? Anything! Or do they pay too many of the renewal fees for their aligned planners?
At worst you will at least achieve some buy-in from most of industry who wants nothing to do with the FPA in it’s current form and at best you will get a complete dissolution of the organisation as Perestroika delivered to the USSR.
The FPA is dead. Long live the Financial Planning profession!
Haha puppet to the instos? They wish!
IFA magazine February 2017 edition, pages 32-33.
‘Nuff said.
Patrick just pulled the rug out of Long term holders in IAM and gave out 300 million shares at 1c plus free options to instos, existing holders were not given the chance to participate (massive dilution of the share register). No credibility whatsoever, the financial losses this person has caused to investors in IAM is staggering, the share price is now 1.3c from a high of 9.5c when he lied to the ASX and called an $800 trial with NAB a binding commercial agreement with a leading financial entity, then allowed the market to trade for 2 whole days in which tens of millions of dollars in shares changed hands before he admitted it was not even an MOU but an SOU (whatever the hell that is). Mark Rantall then bailed a month later. ASX:IAM is being used as a public company to provide cheap services to Patricks private financial business ipacwa while IAM loses $3 million dollars a year of investors money. Disgraceful behaviour
Of course many of you are able to wake up every morning and look in the mirror and “sell your souls” – as you head off to your Insto employer or Insto owned Dealer Groups. You may even complete the facade by “convincing” yourself – that as you sit before a trusting client who is seeking “advice” – that you are going to provide just that.
The large majority of you are spineless, conflicted apologists for a structurally flawed business model.
…and I think you should either seek professional help or up your current medication. Thanks for your input.
^deep denial
This response and some other posts reminds me of Billy Joel’s “Angry Young Man”. http://www.metrolyrics.com/angry-young-man-lyrics-billy-joel.html . Good to see spirited debate but lets not make it personal.
Good read, good debates, but calling others out as “spineless” under an ‘Anonymous’ pseudonym is one of the funniest ironies I have ever encountered on the internet 😀
Well said Patrick. Isn’t it oh so easy to snipe from the side lines. To wish for change and do nothing to achieve it but wait for others to stand for you the. Of course, if it is. It exactly to your liking then they don’t understand you or don’t “get it” . Well done to the FPA for all the work towards making us a true profession you may have to drag some kicking and screaming but hey, they will have to change anyway in the end.
All fair and reasonable points Patrick. But there is still one glaringly obvious step towards professionalism the FPA refuses to take. The downgrading of grandfathered CFPs who have NEVER met a reasonable standard of professional education expected by the community.
The FPA was right to expel the guy who cheated on his CFP exam, for ethical breaches. But isn’t it ironic that he only got to sit the CFP exam by successfully completing a degree and four other postgrad level CFP units, which 25% of current CFPs who were “grandfathered” in have never been required to do.
Out of interest Patrick, how many of the seven practitioner FPA directors are grandfathered CFPs?
taking money off instos regularly also glaringly obvious conflict!!
Dear Anonymous, does it really matter who is a grandfathered CFP and who isn’t? We’re all going to need to sit an exam soon enough to prove we all still know what we’re doing. The FPA today is a 1000% better than it was 10 years ago; still has room for improvement though, imo.
Yes it matters to anyone that has done the hard work to get their qualifications.
Hours and Hours over years..
To devalue that is the exact opposite of what the industry is trying to do. A Grandfathered CFP is worth less then a 3 day DFP course and should not be held as the same as a Masters degree…
75% of CFPs have already sat and completed a much harder exam. They shouldn’t have to waste time on another one. But why doesn’t ASIC grant them an exemption? Because of the 25% of CFPs who have never completed the CFP exam, or any other formal education beyond basic Diploma level. The FPA refuses to remove the undereducated 25% from the CFP ranks, so ASIC has no way of distinguishing. (Nor does the general public, which is exactly how the 25% of grandfathered CFPs like it).
Don’t suppose you are a grandfathered CFP, Frances?
You’d like to think I am.
So Frances if a member of the public went to see an accountant for tax advice and that accountant held the CPA designation, they’d know that most likely that person has a university level degree, i.e. a bachelors or masters and has completed further industry studies to gain their CPA status. Now that same member of the public can go and see a financial planner with a CFP designation, but they can’t be confident that person has obtained a university level degree nor can they be confident the individual has completed the full CFP studies to hold that designation.
We can hardly hold ourselves out as professionals with such inconsistency on education. The FPA is hugely conflicted by owning the CFP status and of course they push this as being the ‘gold standard’ in financial planning, when no major study was required by many of its members. When it comes to education standards, the FPA has failed miserably!
You are all very ordinary at the end of the day.
Thank you
Ha ha says the oligophrenic anonymous no one from nowhere posting in a forum that he’s not qualified to even comment upon.
If so many on the board are independent why is fpa silent on vertical integration?? this article glosses over the main criticism!!
Stevo, VI business models really are not the issue, and anyone who is so concerned or worried by them has no appreciation of the broader picture of market forces/democracy. Without the instos, we would be more the cottage industry of old and less of a ‘profession’ simply due to the fact that the pure capital required to progress every faucet of this industry could never have occurred from individuals alone – I am guessing the holier than thou purists will be enraged at that comment and clamour on about pure F4S and ‘no conflicts’ without ever opening their own eyes to the fact that every form of business by nature has to be conflicted.
There needs to be a place for [b]all[/b] business models that reasonably fulfil the corps act and various regulations without the narrow minded, witch hunting, mob lynching mentality that has sprung up of late. Anyone who is so caught up peering over the fence and concerned with what their neighbour is doing, generally has a lot of weeds in his own garden.
And btw, no, I am an IFA with our own non-aligned AFSL if you were about to question that.
The bigger threat to all forms of FP professionals is the incestuous relationship that the ISA has with Labor and the Unions – they have nothing to gain by making things ‘better’ or less administratively cumbersome for us, and actively can influence legislation to ensure that our collective lives become more onerous. This insto bashing mantra that bleeds so often into these comments is generally led by them, following the age old tactic of ‘divide & conquer’.
both are vertically integrated Joe, both pose a threat to a strong IFA sector, both are tied to pollies and asic and pretend to be pro-consumer. just like the fpa!!!!
An Insto owned manager supporting the actions of the insto influenced FPA that no longer advocates for, or represents its members. This association farce just gets worse.
Well said Patrick.
Spot on, Patrick. if IFA wants to side with the small-minded whingeing advisers (who are, let’s face it, a dying breed) then it too will find itself rendered obsolete – just like those old commission-addicted riskies that the LIF is gradually shutting down.
Well said Patrick!
No surprises who ipac is owned by!