That factor is governance, or more specifically the people who are elected to run these types of bodies.
We've worked with all the predecessors of the IFA going way back to the early 1990s when it was the IAFP and run by a young, woman out of an office in Newmarket. Likewise the PAA and its predecessors such as the IIAA and NZMBA. We've watched what's happened across the Tasman for at least three decades and been involved with the NZ Property Investors Federation and its 20-something affiliated associations. Currently I am the president of one of these groups and have served on the committee previously.
Here is where there is a fundamental flaw in the member association model. The people who get elected into these governance roles are members of the association. They are good, well-meaning people who have put up their hands and offered to give their time to run the body.
The problem with this model is that these positions aren't been filled on the basis of skills. If you look at it another way a listed company is likely to select its directors and chairmen based on what skills the bring to the organisation. It maybe financial, legal, marketing, HR, and so on.
Over the years we have watched adviser organisations in New Zealand and Australia and seen them all rise and fall. Which direction they go depends, to a large degree, on the people running the organisation.
The other observation is that two of the critical roles for an association like the proposed Financial Advice New Zealand are lobbying and a communications. With the way financial services are evolving in New Zealand, and around for that matter, communication and links into the regulatory world are absolutely critical. One example I have seen over the years is the New Zealand Property Investors Federation. Until recently it employed a Wellington-based political lobbyist to ensure it knew what was happening in government circles and to lobby when necessary. The Federation still does this but it is done by its chief executive.
The other key role is communication in the opposite direction - to members. Whoever is appointed to run the association has to live, breathe and have a passion for financial advice. One of their biggest roles is to engage with members. That includes getting out and doing face time nationwide. Over the years we have seen a number of chief executives who have been great at this.
There is a third leg to this and that is public profile. For the record Financial Advice New Zealand, in my view, shouldn't go down this consumer education/public awareness route. It should devote its energy on its members and the regulatory challenges that lie ahead. The association's role is to serve its members first.
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