A united voice for the profession

AFA and FPA proposed merger

Why are the AFA and FPA considering a merger?

Both boards believe there are substantial benefits for their respective members from a merger, providing a united voice and stronger advocacy for financial planners and advisers.

Effective advocacy is consistently the number one priority for members of both associations. The AFA and FPA have worked closely together in recent years in advocacy, making joint submissions in many policy areas. A merger of the FPA and AFA would create a single association which would speak for the profession.  We believe we are better together. 

By creating a single unified voice, we add clarity and power to the positions we take, and avoid duplication of activity.  It increases the likelihood that crucial advocacy positions would be achieved.

Why now?

Recently the AFA and FPA have worked closely together in advocacy, making joint submissions in many areas of policy, running a joint life taskforce, and both being members of the Joint Associations Working Group. We’ve found this approach has been very well-received by members and has helped get positive results in several areas.

Recently, both associations have been frequently approached by membership, specifically suggesting we should merge.

A merger is the logical next step in combining the resources of both in order to ensure a united voice and stronger advocacy for financial planners and advisers.  This is consistently the number one priority for members of both associations and a merger of the AFA and FPA  would create a single association which would speak for the profession.

What will the new association look like?

It is proposed that the merged association would have a single national (not federated) transitional board of 12 directors, made up of eight directors from the FPA board, and four appointed from the AFA board. For future director election cycles, eligible members of both associations would be entitled to stand for election. After the three-year transition period, the board would reduce to nine.

It is proposed that Sarah Abood would become the CEO of the merged association, while Phil Anderson would become General Manager, Transition, overseeing the transition and transformation.  David Sharpe would be chair of the new board, and the AFA board would nominate the deputy chair.

What are the benefits of a merger of the AFA and FPA?

Advocacy

Education

Community

Events

Professional Standards

Member Support Services

A stronger unified voice for financial planners and advisers supports our advocacy goals.

Access to a wider range of resources, clarity on designations and more resources for CPD.

More ways for members to engage with each other and with their association to receive the support they need.

More scale, frequency and resourcing.

Supported through greater resourcing.

More scale and resources to deliver greater services to members.

Timeline

23-24 November 2022

FPA Congress – AFA members are invited to attend the FPA’s Congress at member rates using code ‘AFA2022‘. This is a great opportunity to experience excellent content and network with colleagues, as well as board members and decision makers from both associations.

December 2022 - January 2023

Second round of member consultations

Early February 2023

Final papers and resolutions sent to members for voting

Late February 2023

EGM and vote at both associations

March 2023 - June 2023

Transition period including adoption of a new name and constitution, new board formation, membership transition, staff transition.

July 2023

Windup of AFA structures

Frequently asked Questions

What will the new association be called?

Both boards agree that a new name and branding, reflecting the new entity, would be appropriate to honour the heritage of both associations. Members will be involved in consultation on the options and a proposed new name for the merged entity will be put to members as part of the vote.

How will the vote work?

Members will be asked to vote following a period of consultation. More details on the voting process and timing will be provided in due course but we anticipate it will take place before the end of the calendar year.

What will be the official designation?

The boards have proposed that the CFP designation would be the primary designation going forward.  The FChFP and the ChLP designations which have previously been offered by the AFA, would continue to be recognised and supported, although not available to new applicants.

Who will the merged association represent?

A merged association would represent professional planners and advisers. As a professional association, it would also act in the public interest.  These two goals are complementary – planners are required by law and by Code to act in the best interests of their clients, and their association would reflect that.  

The association would not represent dealer groups, super funds or other product providers – which are generally represented by associations including the FSC, the new insurance-focused CALI, ASFA, ISA and so on.  The new association will continue to work with these groups in the interests of its members, as the FPA and AFA do currently via the Joint Association Working Group (JAWG).

The AFA has a partner program that entitles participants to seats and exhibition stands at events, advertising and, in the case of licensees, access to discounted membership pricing for the advisers authorised by that licensee. That program would not continue in the merged association.

In the past the FPA had a membership category for dealer groups, although that category was abolished some years ago. Those membership types would not exist in the merged association.

This does not preclude these organisations sponsoring interesting and useful content for members and networking events to help keep costs down for members. Where that occurs it will be fully disclosed – as is the case currently for both associations. 

Isn’t this essentially a takeover of the AFA by the FPA?

No. Both boards believe there are substantial benefits for their respective members from a merger, providing a united voice and stronger advocacy for the profession. Any merged association would honour the heritage of both the FPA and AFA, in particular recognising the AFA’s 76-year history as well as the FPA’s background of providing the globally recognised CFP designation. We are specifically seeking members’ feedback on our proposal that the new association will have a new name and constitution, recognising both associations’ heritage.   

The AFA will have an influential role to play in any new association, which will have a new name and brand (not FPA or AFA).  Four directors on the new board will be appointed from the AFA board – one-third of the board representation. Jointly we will work to ensure that the issues that are important to heritage members of both associations will be important to the board of the new association. 

What will happen with life insurance commissions?

Both associations are advocating for the continuation of commissions as an option for consumers to pay for their life insurance advice, and this will not change for the merged association. At time of writing this is a live issue, with Treasury recently releasing a consultation paper on life insurance commissions (among other matters).

Overall, we haven’t identified any areas where the principles of our advocacy differ. In some places the details might be a little different, and we will be working through those areas in coming months to ensure we can be fully aligned. 

What will happen to the professional designations?

The boards have proposed that the CFP designation would be the primary designation going forward.  The FChFP and the ChLP designations which have previously been offered by the AFA, would continue to be recognised and supported, although not available to new applicants. Experience and related qualifications will be appropriately recognised in the pathways to enrol for the CFP.  

For those advisers who have completed the FChFP designation but who are interested in transferring to the CFP designation, we are reviewing where the FChFP designation corresponds with the CFP and have identified a high degree of overlap.  We are working to map the content of the FChFP designation to the CFP designation following the process used with FPEC to approve RPL for tertiary qualifications, to confirm what standing holders of the FChFP will have in terms of recognition of prior learning. Any student wishing to obtain the CFP designation needs to pass the CFP “Capstone” exam, in line with international requirements set by the FPSB. 

How will the merged association be structured?

A merged association would have a new constitution, terms, membership regulations and categories.  There is overlap with many of the existing membership categories for both associations.  Where there is no clear equivalent the member will be guided to the membership category that is the best fit. 

As an AFA member, how will any merged association represent us and our needs/priorities?

Effective advocacy is consistently the number one priority for members of both associations and a merger of the FPA and AFA would create a single association which would speak for the profession. In particular, the new association will be focusing on ensuring support that the AFA currently provides, will be available in the new association. A number of AFA members have focused on insurance, and that area is a high priority one for both boards to ensure continued support. The AFA and FPA have run a joint life insurance taskforce for three years and that focus will continue, along with support for existing holders of the FChFP and the life risk specialist designation (ChLP ). The merged association will also maintain support for the various communities that are run by the AFA. 

Will my fees for membership change?

For most AFA members, a merged association should see a reduction in their membership fees.  For all other members, including FPA members, fees should remain unchanged. 

What is the difference between the AFA and FPA disciplinary process?

Both the AFA and FPA have a disciplinary process in place that investigates allegations of member misconduct and imposes sanctions where misconduct is found to have occurred. 

The key difference between the two systems is that the FPA maintains an independent body – the Conduct Review Commission – which hears cases of misconduct investigated by the FPA where there is found to be a case to answer.  In addition the FPA has the power to impose monetary fines. That power is only rarely used, in cases where conduct has been of such concern that the FPA believes the cost of the hearing should not be funded by all members. Only one case resulted in a fine last financial year (in this case, a member had been driving an elderly and cognitively-impaired client to an ATM and benefiting from substantial cash withdrawals made).

The details of completed FPA determinations are transparent and cases can be viewed on the FPA website.

Whose disciplinary process will be adopted by a merged association?

A decision is yet to made on the disciplinary process of a merged association but both the AFA and FPA boards agree that it is vital to maintain a code of conduct that members must adhere to. 

A disciplinary process is an important part of maintaining the integrity of members and supporting public confidence in the profession.  Ultimately it supports the standards the associations require of its members, and any reputable association should have measures that penalise or exclude members who do not meet these professional conduct standards.

There’s been a lot of negative comment by the AIOFP of the merger, and both associations. Would a merged association stand up more to the AIOFP?

The AIOFP is entitled to its views but we don’t see them as relevant to the majority of our members. We believe that it is potentially damaging to our profession to get involved in a public squabble between two associations. 

Further questions

If you have any further questions please email merger@afa.asn.au.