AN ASSOCIATION DICHOTOMY
Now that joining Association membership is optional for Financial Advisers, it is important to make a judicious decision with your political and monetary capital. As recent history has demonstrated, the experience can vary between calamitous and advantageous, it simply gets down to the specifics of the organisation and whether that organisation matches your objectives.
Associations are still recognised in Canberra as a powerful political force, but you must make sure you have selected the right one.
When it was TPB mandatory to be an Association member to operate in the industry, it seems many Advisers just ‘ticked the box’, joined any Association without analysing what they were supporting and what they were getting themselves into. It also seems that most thought all Associations ‘are the same’.
That misconception has inflicted much pain on many Advisers and caused many to opt out of Association membership, which is regrettable but understandable if you were in the wrong Association.
We must learn from the past as history has a very bad habit of repeating itself. This is no reflection on the new FAAA but the example of the FPA/AFA/FSC backing Minister O’Dywer to implement LIF/FASEA/Grandfathering must never be forgotten. These 3 Associations backed in the legislation, Minister O’Dwyer conveniently declared them as ‘representing the industry’ and the rest is a horrific history with some of the most destructive legislation in living memory. All these Associations had been infiltrated by the Institutions who influenced Government to ‘cull Advisers’ .
The harsh reality is all the Adviser members of these Associations were effectively allowing Management to use their own political and monetary capital against them.
The reason we have been outspoken on the role the FSC plays in the Advice space is because they have been behind most of the draconian legislation by playing the quintessential ‘keep your friends close but your enemies closer/divide and rule’ political tactics to perfection. They should be congratulated for their efficiency with getting desired outcomes over the years but only if these outcomes suited your objectives.
The first characteristics of an Association you should look at before joining is the make up of the Board and Management, that will give a clear indication of their objectives. The second is the membership funding. The FSC Board has 10 Directors, all senior Executives from Mercer [Chair], Alliance Bernstein, Bell Asset Management, AMP, Challenger, Insignia, Colonial First State, BT, UBS, Macquarie and the CEO is from Westpac.
Quite an impressive line up from Banking and Funds Management however, but would you consider this to be Adviser friendly? Probably not, arguably the only Adviser friendly manufacturers departed last year and set up the Council of Australian Life Insurers [CALI]. Not difficult to work out who is funding the organisation and its policy direction.
How can you have an organisation like this involved with JAWG supposedly making positive decision for independent Advisers? The other two are FINSIA and the AMP influenced TAA.
Our message is clear, the Advice community needs all Advisers to be a member of an Adviser friendly Association to favourably influence Government and the next 12 months is critical to changing current policy with a Federal Election on the horizon.
Once we assemble the other Adviser focussed Associations on the INDEPENDENT FINANCIAL COUNSEL, we encourage all advisers to join one of them.
Please pass this onto any non – members for consideration.
Peter Johnston | Executive Director
