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.