According to the Financial Advice Association Australia (FAAA) annual report for 2022–23, the post-merger membership numbers have reduced by 11.7 per cent, though the FAAA noted that members who transitioned their membership to the new body after 30 June 2023 will be reflected in next year’s report.
“The membership categories most impacted were the practitioner category, with members experiencing the impacts of factors such as changes to education standards, plus changes to business models and the ongoing impact of onerous regulation,” the report said.
“These factors have resulted in a number of financial planners continuing to leave the profession.”
In 2022, overall member numbers sat at 10,954, while the FAAA said its 2023 membership count is now 9,670.
The 11.7 per cent fall is far greater than the overall drop in adviser numbers for 2022–23, with the profession as a whole losing 599 advisers – a 3.7 per cent drop.
“FY23 saw the continued rollout of the new membership structure announced last year following a comprehensive review in 2022,” the FAAA said.
“The simplified membership pathway now provides a home for all professionals who work in financial planning and took effect for FY23 membership renewals.”
FAAA also reported that student affiliates have declined marginally from 995 to 989.
“The FAAA continues to actively support quality new talent to build the next generation of financial advisers and continues to host a variety of educational events and activities often in collaboration with educational providers and local FAAA communities,” it said.
According to Wealth Data figures in August, there were 7,851 current advisers that are members of the FAAA, with the association having submitted its records to the Australian Securities and Investments Commission (ASIC).
“Since then, quite a few of those advisers have ceased and a few may well still be in the process of joining FAAA. For example, we found another 95 advisers who are still showing as members of the FPA/AFA,” said Wealth Data founder Colin Williams.
“The 95 advisers may well be finalising their memberships. However, licensees should be monitoring their advisers to ensure their details are up-to-date, as fines may apply. Secondly, it can be misleading to the public, which never fares well for anyone connected to financial advice.”
In a statement following these numbers being reported, the FAAA said the number of advisers who have renewed or are in the process of renewing their membership with the FAAA was “very pleasing”.
“We are very happy with how the numbers are tracking,” said FAAA chief executive Sarah Abood at the time.
“Between them, the FPA and AFA had just under 12,000 members across all categories just before the merger, of which 8,946 were practitioners. As at today, 9,525 members have renewed across all categories including 8,093 practitioners. This means that 90 per cent of advisers have renewed their membership with the FAAA.”
FAAA will never reverse the membership decline unless it becomes a genuine professional association. To do that, they must sunset grandfathered CFPs, and stop accepting membership payments from product providers.
It is hard to believe that FAAA would waste so much of its members’ resources lobbying for a sunset clause to the government’s experience pathway, but won’t implement a sunset clause for their own shabby grandfathered CFP arrangement, which is totally within their control and has been eating away like a cancer at their credibility.
It’s not an adviser association until ONLY advisers can be a member, no licensees or product providers.
FAAA management has a well rehearsed and utterly disingenuous response to that Steve, which is “product companies cannot be members, and have not been able to for some time”. Technically speaking, that is true.
What they conveniently overlook however, is that many product companies, via their advice licensees, compel their advisers to be FAAA members and pay their membership fees in bulk for them at a discounted rate negotiated with FAAA. It is ultimately the product company who is making the membership decision and providing FAAA with funding. It is product company membership by stealth. Which is actually worse, due to FAAA’s facilitation of it and tawdry attempts to sweep it under the carpet.
While there is nothing FAAA can do about product companies forcing their advisers to become members, FAAA could remove much of the perceived conflict by only accepting membership payments directly from advisers, and not providing discounts to advisers licensed through product companies.