There is a slew of associations which advisers are members of in Australia. In fact, would you believe 23,000+ advisers in Australia are members of over 350 associations! But beware the acronyms you are confronted with when an adviser tries to sell you on the credentials of each association.
“I’m a member of the FPA”
“I’m a member of the AFA”
“I’m an SMSF Association member”
“I’m a CPA”
“I’m a member of AMA”
So, what does all this mean....hang on - “What? The AMA – isn’t that the Australian Medical Association”. Yes!!!
At Adviser Ratings, we say beware the acronym and investigate the relevance and importance of each association. I wouldn’t say being a doctor is highly relevant in the dispensing of financial advice, yet somehow the Australian Securities and Investment Commission (ASIC) allows this to be a relevant association on the Financial Advice Register.
Whilst Adviser Ratings has imported all associations advisers’ profiles, it is important to distinguish the relevance of each. Associations play an important role – they should be an organisation seeking to further the particular profession of its members (in this instance, financial advisers) and the interests of individuals engaged in that profession and at its core the best interests of the public.
Of the advisers currently practising, 41% are not currently part of any association and another 7% have listed what we have deemed irrelevant memberships with ASIC.
We have identified certain associations that fit the relevant bill, which help form part of the rating of each adviser. Along with the public interests, there are two key aspects that we look at when identifying a 'worthy' assocation.
1) The have a code of ethics their members must abide by, which means if breached, the adviser may be expelled or suspended from the association.
2) There is professional development as part of being a member, depending on the level of membership. Professional development means that the adviser is required to have minimum annual ongoing training as part of their membership.
It is also worth noting whether the association has a client dispute scheme. This ensures its members are upholding the values of the industry, the association and more importantly, the general public.
These key associations are:
1. The Financial Planning Association (FPA)
5. Certified Practising Accountants (CPA)
7. The Tax Institute of Australia (TIA)
9. Financial Services Institute of Australasia (FINSIA)
As the industry moves to become a profession, we will keep you updated as to what this means as a consumer and which association or associations are holding their members to the new standards expected of a financial planner.