Both financial advice lobby groups appeared before the Senate Economics Legislation Committee inquiry into the FOFA amendments yesterday.
Greens Senator Peter Whish-Wilson asked a panel of FPA executives to explain the difference between the groups – particularly given their different approaches to the general advice provisions in the proposed FOFA amendments.
FPA chairman Matthew Rowe said his organisation was a ‘professional body’ rather than an ‘industry body’, and any board decision must be in the public interest – not necessarily the commercial interest of FPA members.
“We have formed views that the commission element around general advice is not in the public interest,” he said.
“Whilst I acknowledge that that may not have been a policy intent and – it’s an issue around drafting – we think it’s something that should be rectified,” he said.
As for the difference between the two organisations, Mr Rowe said that while members of the AFA can also be members of the FPA, “it doesn’t go both ways”.
“To be a member of [the FPA there are] educational standards and other things that would preclude just anyone becoming a member of the FPA,” said Mr Rowe.
“So there are differences between an industry body and what an industry body represents, which is the commercial interest of its members; and a professional body which is there to act in the public interest,” he said.
Asked his opinion about the differences between the two groups, AFA chief executive Brad Fox said there was “actually a fair degree of crossover”.
“There are a number of members that are members of both organisations. So I would say they’re not distinctly different,” said Mr Fox.
“[The AFA] has a designation that our members can achieve; and the FPA has a designation their members achieve. We both have codes of conduct or support structures similar to that,” he said.
How about one organization represents the views of large Financial Industry companies and the other represents the views of the advisers who actually talk to the public and know what they want.
@Old Risky: The FPA funds its perorations entirely from membership fees paid by individual members – there are no longer any corporate memberships nor do corporates have any voting rights. You are incorrect about the Board – there have been no casual vacancies for over 4 years (at least) and each practitioner director is popularly elected by members.
Professional bodies make an issue of respecting the public interest because it is good for the commercial interests of the members of the professional body. That is not a bad thing but let’s not kid ourselves that professional bodies are purely altruistic.
Embrace the facts and understand that all genuine, commercially minded parties want to maintain their long term business incomes and that is the single biggest motivator to respecting the public interest.
Part of that is endorsing having the bad egg advisers banned directly by ASIC and not simply move from one AFSL to another.
Having multiple sources of education and accreditation is a good thing to assist in lifting the competency. The last thing you want is complacency in the training and accreditting body because they have a monopoly.
FPA 0 AFA 1 (own goal by Rowe)
Apologies, but with the World Cup approaching, it was hard to resist.
[quote name=”Chris Browne”]Excellent response Brad. As a younger member of the Financial service industry it is great to see one leader attempting to create unity during these uncertain times. We’ll done.
Matt it is time to listen to your members and put your elitist PR spin aside for the betterment of our profession. For your interest, I share the FPA’s sentiments about some of the proposed changes. However, other amendments will simply make great financial advice less accessible to people who need it the most.[/quote]
Excelletn response Chris, one that is shared and endorsed by many in our profession.
Difficult to get a unified approach from financial planners when you have the chair of ‘one’ of our peak bodies pitting peak body, against peak body. I think Mr Rowe might have put a bit more thought into his response!
Is there any difference between CPA and CA members in qualifications-I think not. The same qualifications should apply for FPA and AFA. If we wish to be seen as a profession – its time to cut the grass on both sides and BE professional in all aspects. I don’t agree with the appointment of a product representative on the board though.
Excellent response Brad. As a younger member of the Financial service industry it is great to see one leader attempting to create unity during these uncertain times. We’ll done.
Matt it is time to listen to your members and put your elitist PR spin aside for the betterment of our profession. For your interest, I share the FPA’s sentiments about some of the proposed changes. However, other amendments will simply make great financial advice less accessible to people who need it the most.
Interesting. The FPA could be expected to apply that position, but my question is what is the influence of the product manufacturers on the FPA. What happens if the “public interest” clashes with the interests of manufacturers. And didn’t I see a board vacancy filled recently by someone from a product manufacturer