Mandatory membership: A duty to the next generation

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Following AMP’s announcement that it intended to mandate compulsory professional membership for its planners, the FPA has reiterated its stance on mandatory membership.

FPA CEO Mark Rantall says that current practitioners of financial advice have a duty to the next generation of advisers.

“I can understand people who haven’t been a part of this and haven’t grown up within that professional framework that other professions like accounting, law and the medical profession have. But we’ve got to build to the future and the next generation is looking for us to put in place a lifelong career that is regarded as a profession by the public.”

Rantall says that 17 universities have already agreed to implement core curricula that will lead into the CFP program. “My sense is we’ll have a whole new gen coming thru of young grads who are seeking to carve out a lifelong career in financial planning and be part of a professional association.”

About 30% of the financial community are currently sitting outside any professional association, says Rantall, and this will be the barrier to being regarded as a profession by the public – who are ultimately the ‘judge and jury’.

“While we welcome the debate, the fact is the overriding weight of momentum is propelling our industry towards a profession. Why? Because a majority of planners and consumers want such an outcome.  And our legislators and regulators seek the certainty of dealing with a set of substantive legal, ethical and consumer centric requirements, which they will either endorse or impose.”

Rantall says that far from being an extra compliance burden, membership of a professional association has benefits for advisers as well as the public and the profession’s reputation.

The Financial Ombudsman Scheme utilises the FPA code of conduct when making decisions, so Rantall says advisers will be able to protect themselves if they adhere to the same code. “Rather than being extra compliance, it actually provides a great client engagement standard,” he says.

  • alleycat on 9/07/2013 12:33:39 PM

    So, 75.% of financial planners are directly or indirectly linked to 6 institutions, but these people aren't conflicted are they?

    Industry Funds aren't conflicted just because most of them are run by Union representatives are they?
    The Federal Labour government has managed to change leaders twice in 3 years and many who obviously had divided loyalties aren't conflicted are they ?

    Could someone please turn on the lights and show up all these issues for what they really are if you want to be fair dinkum about putting forward the interests of others before your own.

  • Pat on 9/07/2013 10:59:24 AM

    I agree with Matthew - a membership to an association is not going to make financial planning a profession. That most advisers are employed by product manufacturers will ensure that the public will continue to view planners as product pushers, irrespective of their intent, ethics or behaviour.

  • Matthew lock on 9/07/2013 10:35:25 AM

    While the FPA took the courageous step last year to remove insto membership from the FPA they are still inexorably linked to the advisers that work for them through their membership. Now I'm not saying that (for example) an AMP adviser is any less honest, diligent or professional as the best advisers in the industry. However, what I am saying is that their membership of the FPA could create a conflict for the association in the eyes of the investing public. I attended the MM Thought leadership session last week and Mark Rantall stated that 8 out of 10 advisers are hired directly or indirectly by the big 6 instos...I am assuming he meant the banks and a couple of life offices. From a public perception viewpoint this can only serve to disrupt the association’s aim of promoting the profession. I ask you...what would be the public’s perception of the medical industry be if 8 out of 10 GPs either directly or indirectly worked for the top 6 drug companies.

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