The AFA has reported a financial loss owing to numerous “additional expenses” not initially budgeted for, in a development that has some members concerned.
At the association's closed-door annual general meeting at the national conference on the Gold Coast last week, it was revealed that expenditure exceeded revenue at the association last financial year.
Speaking to ifa, AFA chief executive Philip Kewin confirmed the financial situation and said the additional expenses incurred related to costs for “professional services, CEO and senior management transition costs and an extraordinary general meeting”.
Several AFA members, speaking to ifa on condition of anonymity, expressed concerns over the professional association’s expenditure, questioning whether the blow-out was necessary.
“The former CEO [Brad Fox] completely messed our financials,” one veteran member said.
“He was spending like crazy.”
Another member expressed concerns that uncertainty around the impending introduction of professional standard requirements could mean many of the supposedly “one-off” costs attributed to the overspending could be incurred again in the coming years.
The member added that there appears to be no contingency plan for this scenario.
However, Mr Kewin said the AFA is readying to fix the situation, with the budget for 2018 reflecting “the necessary costs involved in running the association” and added that any additional costs incurred by changes in regulation would be incurred by the industry as a whole.
“In terms of the future, the increase in regulatory costs will be something that is borne across the entire advice profession, impacting advisers, licensees and manufacturers,” he said.
“Of course, professional associations will be no exception as our responsibilities will also increase as a result of professional standards legislation.”
Mr Kewin did not respond ifa’s request for specific numbers relating to the organisation’s financials.
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