The extraordinary general meetings (EGM) of both the Association of Financial Advisers (AFA) and Financial Planning Association of Australia (FPA) held today have seen members of both organisations vote in favour of the proposed merger between the two industry bodies.
The proposal required 75 per cent of eligible voting members to affirm the plan for it to proceed and the EGMs saw an average of 96.5 per cent of AFA votes and 96.7 per cent of FPA votes in favour of the motion.
It is estimated 2900 members across both industry bodies took part in the vote.
FPA chair David Sharpe described the development as making this an historic day for the financial planning sector.
“We saw substantial benefits from a merger and it is clear from the vote that the vast majority of members also recognise these benefits,” Sharpe said.
AFA president Sam Perera echoed these sentiments, labelling the result a crucial turning point for the financial planning profession.
“It gives us that strong united voice at a critical time, especially as we are doing our best to ensure we get the Quality of Advice Review proposals across the line,” Perera noted.
The new entity will be called the Financial Advice Association of Australia and, should both memberships be retained, will represent around 3700 financial planning practioners.
“The real test of [the total membership] will be through the renewal phase. We’ll be opening up membership for renewal in April/May,” FPA chief executive Sarah Abood said.
Under the merged entity, the certified financial planner – or CFP – accreditation will be the lead designation. The FChFP and ChLP designations previously awarded by the AFA will remain, but new admissions for these will no longer occur.
The process has included the establishment of an interim board of the Financial Advice Association of Australia that will be comprised of 12 directors, four of which will be appointed by the AFA and eight from the heritage FPA.
“The CEO will remain Sarah Abood and [AFA chief executive] Phil Anderson will come across as the general manager of transition. That interim board will be in force for three years from legal completion, which we expect to be 3 April [2023],” Sharpe said.
The transition in its entirety is expected to be completed by 1 July 2023.
Anderson pointed out while advocacy will be the new organisation’s primary objective, there are many issues that will also be addressed, such as the Quality of Advice Review and the education standards for practitioners.
