By disclosing their executive remuneration details, the advice associations have shown they are embracing transparency and seeking to avoid the mistakes of others.
Since CPA Australia’s Alex Malley finally broke his silence, speaking to ifa sister title Accountants Daily about the personal toll of the campaign against his leadership, the embattled chief executive has consistently blamed a vendetta against him by members of the press.
While there may or may not be some thorny personal history between Mr Malley and some journos in the Fairfax stable, ifa and its sister titles have only ever been interested in one thing: the grievances of, and impact on, the members.
Recent years have seen significant change in the mission statement and operational model of the professional associations. All of the major associations representing financial advisers have made changes to their constitutions and business models in an effort to secure the all-important seal of approval from the new government watchdog FASEA when the time comes.
Professional association status will give them stickier members, a steadier stream of education and CPD revenue and the ear of Canberra (or so they have been told).
But this pivot has come with great risk that elevated status and the adoption of a quasi-regulatory role would make them further out of touch with members, increasingly distant from the everyday realities of small business.
This risk is at the very heart of the CPA Australia saga.
With its initial refusal to grant greater transparency to members and efforts to stop them from challenging leadership, the association indicated that it was above the members, that their concerns were inconsequential.
ifa has previously argued that the advice associations face a similar challenge, and that the FPA, which has arguably taken its evolution to become a regulatory body a step further, faced particular risk of becoming an advice antagonist rather than activist.
Advisers need advocates helping to reduce the ludicrous levels of red tape so they can better service a wider range of Australians. The last thing they need is more regulation.
But if the associations insist on going down the route of supporting government intervention and monitoring their members, then this shift in behaviour should come with new responsibilities.
If they are going to talk like government, then they should walk like government and that means transparency over things like remuneration.
By revealing their CEO salaries, as they did yesterday, the FPA and AIOFP have indicated that, for now at least, they remain on the right side of this delicate balance.
While some questions remain, both associations have sent a message that they support transparency and they respect the rights of their members to know the truth.
The AFA, which declined the opportunity to publicly disclose the CEO’s salary, should seriously reconsider, particularly given the tensions still ongoing with its own membership and the ugliness of the CPA situation.
In addition, all three associations have shown that they have not been spending as frivolously as their peers in the accounting profession (perhaps ironically, given the superiority complex from which accountants sometimes suffer).
Once CPA Australia did cave to media and member pressure and provide CEO salary details, it seemed the body had much to hide after all, with a salary of almost $2 million for Mr Malley that many members and commentators thought was grossly out of order.
Similarly, the Chartered Accountants body revealed to Fairfax that its CEO receives an $850,000 salary, indicating comparable largesse (although still less than half of Mr Malley’s ample compensation).
The associations mandate that their members act in accordance with professional standards.
It’s good to see them doing the same for once.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 18 Feb 2019ASIC appeals Westpac best interests court decisionBy Adrian Flores
- 18 Feb 2019FASEA mostly funded by the major banksBy Adrian Flores
- 15 Feb 2019ASIC to undertake harsher penalties against banksBy Eliot Hastie
- 18 Feb 2019NAB most distrusted bank, survey findsBy Sarah Simpkins
- 15 Feb 2019Court restrains unlicensed firm from operatingBy Adrian Flores
- 15 Feb 2019ASIC used Dover whistleblowing to shut licensee downBy Adrian Flores
- view all