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Associations must change, IFA bosses say

Change may be inevitable if New Zealand’s financial adviser associations are to survive, it has been suggested.

Wednesday, May 13th 2015, 6:00AM

by Susan Edmunds

Since the advent of regulation, the membership of the professional bodies has fallen significantly.

Finances are tight – the IFA reported a surplus of just $466 after tax for the 2014 year, up from a loss of more than $40,000 in 2013. The PAA posted a loss of $54,295 in 2013 and is yet to file its statements for 2014.

IFA president Fred Dodds said there were a number of fixed costs for the associations, that could not be changed. The IFA now has 750 members, down from 1300 pre-regulation. The PAA has just under 1200. Combined, the IFA and PAA have about a third of the adviser population in their membership.

A merger would be sensible, he said, and could be prompted by the Financial Advisers Act review.

He said it would likely be supported by product providers.

After this year’s joint conference, the associations could poll their members to ask what they thought should be the way forward, Dodds said. “There are not a lot of people joining up.”

An organisation with 1500 members each paying $700 a year would have money left over to be used for more than merely staying afloat, he said. “In an ideal world an association should rely on its membership income, not sponsorship.”

President Michael Dowling said it was a fine line for the associations to walk because they are not-for-profit organisations. “Whenever you’re doing budgets or balancing books you have to think what is it going to cost us to deliver what the members want, you can bring in a bit more than that but you can’t create a big profit.”

He said all associations had suffered a drop in numbers. “That will have to turn around at some point. We’re talking about how we can get new membership.”

Murray Weatherston said smaller associations such as SiFA were less affected because they have no overheads.

Dodds said there had been no formal discussions about a merger.

The PAA was unavailable for comment.

Tags: IFA PAA

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