The FPA has signalled its intention to stop select members of the financial planning industry from taking a free ride on the coat-tails of their professional peers.
At a briefing held yesterday to launch the association’s consumer advertising campaign, FPA chair Matthew Rowe said of the 16,000 financial planners in Australia, half of who were members of the association, there was an estimated shortfall of between 5000 and 6000 advisers without ties to a professional organisation or body.
“We estimate there are probably 1500 members of the AFA (Association of Financial Advisers) and probably about the same number of financial planners who are members of the accounting body, so we believe there is between 5000 to 6000 financial planners in this country who are not members of any professional body or any professional association and they are the free riders,” Rowe said.
In explaining the ‘free riders’ concept, he said it was similar to those who caught public transport but did not pay for a ticket.
“We have a number of free riders in the financial planning community, our professional colleagues, who don’t sign up, they are not a debtor to their profession, they’re not a member of anything, they exist in what I call a professional vacuum,” he said.
When asked how the association planned to move on untied planners, he said the FPA’s national campaign and the potential for the term financial adviser to be set in law were good starting points.
“The [Financial Services and Superannuation] Minister [Bill Shorten] is doing work on that and so is ASIC around a code of ethics and some sort of standards board as well,” he said.
“It’s now time for them [free riders] to stand up and if they really wish to be a professional, they need to acknowledge that you must be a member of a professional body.”
He said it was also up to the FPA to have a clearly defined value proposition and up to Australia’s professional community to “call their peers on behaviour around this”.
The FPA’s marketing campaign, which was funded by members to the tune of $2 million, will be launched on 18 September.
