What Advisers Think Of An FPA/AFA Merger

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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