Most advisers support a merger between Australia’s two major advice associations, with a growing proportion of the shrinking profession now holding just one membership.
Analysis by Adviser Ratings shows the share of advisers with one association membership has gone up 3 per cent since 2020, against the backdrop of a contracting workforce. Meanwhile, the proportion of advisers with multiple memberships has dropped slightly.
Now, just one-in-five are part of two or more associations, which represents a drop of 2241 advisers when the overall decrease in the adviser universe is taken into account.
At the moment, the FPA lists its annual fee for CFP professional membership at $995 a year, while the AFA lists its practitioner membership at $840 annually. Both associations have multiple membership tiers and offerings for different types of advisers.
Figure 1 – Professional memberships over time
Source: Adviser Ratings
Merger talk and the profession’s response
Last month, the Financial Planning Association (FPA) and Association of Financial Advisers (AFA) confirmed a merger – long-speculated about – was on the cards.
“By creating a unified voice, the merged association would add clarity and power to the positions it takes and avoid duplication of activity and erosion of its messages,” FPA chair David Sharpe said.
An Adviser Ratings poll shows more than 80 per cent of advisers back the move, which, if replicated in a formal vote, would get the merger across the line (75 per cent needed).
Figure 2 – Do you think the AFA & FPA should merge?
Source: Adviser Ratings poll
Where advisers sit on associations
Given the prospect of the merger, we thought it would be worth further exploring the breakdown of advisers by association.
While the AFA and FPA have an equal share of advisers with Adviser Ratings platinum status, the FPA currently has a greater share of gold status advisers – 53 per cent, compared with the AFA’s 36 per cent.
Only 13 per cent of advisers who are not members of either association have Adviser Ratings platinum or gold status.
Figure 3 – Volume of professional memberships by Adviser Ratings status
Source: Adviser Ratings
On membership numbers, our analysis shows both associations’ bases have grown in recent years (see below). However, the FPA’s growth has been more pronounced.
Figure 4 – Proportion of advisers who are AFA members: 2019-today
Source: Adviser Ratings
Figure 5 – Proportion of advisers who are FPA members: 2019-today
Source: Adviser Ratings
While the profession has lost more than 12,000 advisers in five years, risk advisers – who traditionally favoured the AFA – have left at disproportionately high rates. Risk advisers now make up less than a tenth of the financial advice landscape.
Disclaimer: The onus is on advisers to update their professional memberships on the Financial Advisers Register.
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Comments2
"FPA / AFA are a joke and do not care for front-facing advisers. Join the AIOFP who actually represent their members and clients. "
Adviser 13:56 on 27 Oct 22
"Both of these associations have been collecting membership fees for a long time, and providing what?? Neither of them have provided any kind of worthwhile representation to the brainless wonders (politicians), regulators and academics that have all but brought the advice industry to its knees. They should definitely combine. That only makes common sense. First thing they need to do is make the regulators aware of what Resolution Life has done to AMP. The service provided by Resolution Life to their clients and advisers is so bad that it needs reporting. This company absolutely needs a shake up and made to adhere to something resembling best practice. Advisers bear the brunt of over regulation in this industry while companies like this get away with conduct that could only be described as unconscionable. They are top heavy with overpaid executives and clearly have decided to cut costs by sacking BDMs. They have one 13 number that covers everything, and the wait is hours, not to mention them taking months to do what other companies do in days."
Deputy 11:34 on 27 Oct 22