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[The Wrap] What's the future for Financial Advice NZ?

Financial Advice NZ is, arguably, about to enter into a period which will determine its future.

Sunday, November 5th 2023, 2:10PM 11 Comments

by Philip Macalister

The association which is an amalgam of three former associations is five years old, and like any five-year old has big changes.

The body has been ably led by its inaugural chief executive Katrina Shanks. However, she has just a week left in the role before taking up a gig in Melbourne as the chief executive of ANZIFF.

Whoever, the board appoints to replace Shanks will be a determining factor for the survival of Fin Advice NZ, which after all is a voluntary membership association.

A lesson from history is that whoever assumes the reigns will, in all likelihood be the make or the break for the association. Over my decades in the industry I have seen poor appointments (along with some good ones).

But it is not just Shanks’s departure which has thrown the association’s future into sharp relief.

As we report here, Australian mortgage broker association FBAA, has plans to set up shop in New Zealand. This is a direct threat to the mortgage adviser cohort within Fin Advice NZ.

I have argued before that this group could benefit from having its own association, like the old NZ Mortgage Brokers Association (NZMBA). Mortgage advisers need a body to stand up to lenders – banks in particular, who have far too much control over is distribution force.

This is even more important now that more than half of home loans are now originated via advisers these days – growing and showing no signs of declining.

Added into this there is the restive body of CFP members. Many, if not the large majority of them, belong to Fin Advice NZ as it is the only way they can maintain their premier marque. Yet Fin Advice NZ, like its predecessor the Institute of Financial Advice, has done diddly squat to promote CFP and its insurance equivalent CLU.

Just last week I had a call suggesting CFPs should have a new home.

Then of course there is the Financial Service Council which has had its eye on taking over Fin Advice NZ – although they will deny this.

Clearly, the body which represents product manufacturers, has been encroaching into the advice space. Some of its members have confirmed to me that FSC has had designs on Fin Advice NZ.

The of course there is ANIIF - while it has a low profile in New Zealand, maybe things could change?

The Financial Advice NZ board has only one shot at making the right appointment to replace Shanks - and clearly articulating a roadmap for its future existence. The association’s future depends on them getting it right.

Tags: ANZIIF FPSB FSC IFA Katrina Shanks Opinion PAA

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Comments from our readers

On 5 November 2023 at 5:18 pm John Milner said:
I really don’t know what I think of the association anymore. Having spent 35 years as a member of its predecessors, I no longer feel part of a group of like minded individuals. I don’t feel the inspiration I once felt in others, to educate themselves to the highest levels as CFP, CLU holders or god help us, the now degree and masters that are now available. The term association now seems an oxymoron as many now seem disassociated. Long gone are the monthly meetings where we met together, face to face, to swap stories and perhaps learn something new.

We do have an incredibly efficient comms team, that provides a weekly 1 hour training opportunity via zoom and an annual conference. The communications and online training has been a massive step up. But that of course comes from technology and greater acceptance thanks to Covid.

So, it would seem we are a group that champion the average, with those of us that have worked hard to achieve CFP, CLU status becoming dinosaurs.

Gone are the panel of advisers, reporting on their pilgrimage to the Million Dollar Round Table (MDRT) as the association didn’t reciprocate the MDRT members reaching out to them.

Katrina did however, bring some fresh new ideas to the association. Comms are second to none and it would have been a daunting job, herding the many, under duress, to the dizzying heights of level 5. She has taken us from a voluntary organisation to a corporate entity. So thank you Katrina.

So, could this professional malaise be the fault of the board who most of us have never met. After all, one of the tasks of a board is to set in place an appropriate level of values and working environment for an organisation. Perhaps they could learn from our cousins across the Tasman, who know how to celebrate success and encourage members to strive to become their very best and not just a box to tick.

On 6 November 2023 at 6:14 am Pragmatic said:
All parts of the value chain must be able to defend their position by adding measurable value. If the FANZ audience seeks face to face get-togethers, then FANZ needs to revisit this.

Equally, FANZ needs to be an active lobby group ensuring that the financial practitioners have an influence with the law makers. Gone are the days of requesting an annual sub along with a handout to attend a conference, as much of this content is provided by other industry participants.

I agree with the author, that the FANZ board has a very challenging selection ahead of them - as it will be difficult to attract relevant talent to apply for this role.
On 6 November 2023 at 9:32 am Another AFA said:
@John Milner - Great comment and hit the nail on the head. I too feel disconnected from FANZ despite being CFP and a long term member.
On 6 November 2023 at 9:37 am LNF said:
Interesting how it has changed
Began as PAA - Prudential Agents Association
Now there is no Prudential
Now there are no Agents
On 7 November 2023 at 9:23 am Backstage said:
@LNF, not quite, LUA it was, Life Underwriters Association. And, the FSC didnt have bank members and it was the LOA, Life Offices Association. Katrina via FANZ has advocated using a core group of sizeable adviser practices to represent Life, Mortgage and Investment advisers to the regulator and FSC. There probably hasnt been too much said over that but it has happened. The LUA did have tailored meetings for risk advisers that we all loved. Many MDRT visiting speakers and regional meetings. There could be an appetite for that again?
On 7 November 2023 at 8:35 pm Arty said:
Not qite, I think, Backstage!
Quote from the FANZ website:"In 2018, Financial Advice New Zealand was created by three founding bodies – the PAA, IFA and NZFAA."
That should settle that matter! In fact as a longstanding and Life Member of both FANZ, Life Underwriters Association (became IFA) and Prudential Life Underwriters Association (which way back changed name to Professsional Advisers Association) as I remember it the PAA board proposed and managed the whole 2018 amalgamation and ran the new FANZ?
The saddest thing was that PAA members had spent many many years building up a 5 million+ portfolio of holiday homes for members use, including two in OZ, and these were sold by the board in order to set up a Foundation Fund which we never hear anything about any more... Love to have a report on what our 5 million is doing for the members one day!
On 8 November 2023 at 8:01 am Backstage said:
@Arty, spot on, apologies. Yes, I recall the PAA benefits. Gosh, what will the industry look like in another 25 years?
On 8 November 2023 at 10:53 am Pragmatic said:
@backstage my predictions on the nz financial industry over the next 3 years are:
1. FANZ (as it is now) will struggle to attract / support members, with the rise of other ‘industry bodies’ to cater for advisor-specific needs
2. FSC will open up its doors for the largest of dealer groups, providing an array of services ranging from lobbying, to governance training, to improving industry management.
3. Other industry groups will cater adequately for the needs / content required by other the broader advisory community.
4. Industry acronyms such as CLU, CFP etc will have limited relevance for consumers who will find it increasingly challenging to distinguish between advisors & professionals
5. Sadly these predictions will place the future of the nz financial services industry in the hands of the government & regulators to shape & manage as they see fit. This with neither be good nor bad for industry participants, albeit that the hopes of establishing a ‘profession’ are eroded with this forecast fragmentation.
On 8 November 2023 at 11:51 am Backstage said:
@pragmatic, yes agree with point 1 and that is unfortunate on some levels as I really think advisers should have a separate voice to suppliers. It would take a special CEO (Katrina did well) who can stretch across, risk advisers, mortgage advisers and investment advisers and represent us all to suppliers and the regulator. Difficult to find someone without a bias to 1 category and who has the relationships and real understanding of advisers and the advice process.

On point 2. This would be a real shame. Advisers and suppliers should not be in the same group. Different challenges and a group like that would diminish the smaller adviser groups and has the potential for politics. Already many insurers (forget banks and investment groups) have CEO's that really have no clue and grass level about advisers. A dealer group does not always represent individual advisers interests and often many of their leaders have elusions of significance and do not really know individual members real challenges.

Point 4 has happened already. Just as, Trusted adviser never flew and never will.

Eventually the robots will take over advice, Insurers will vertically integrate and develop this. They could cater to the bulk of the market so the robots will need to form an association :)
On 18 November 2023 at 12:45 pm Comprehensive Planner said:
A significant point that is highlighted in many of these comments is that FANZ felt it only represented the needs of Risk advisers, Mortgage Brokers and Investment Advisers, all along ignoring those of us that operate as Comprehensive Financial Planners.

From dropping the Forth board position (representing FP) and incorporating it with Investment. This has lead to a significant lack of promotion of the Pinnacle mark of CFPcm amongst the membership as well as the general public, when I gained my CFP Designation we had over 600 colleagues and now we are just over 200.

As a devoted professional to the practice of financial planning, I set up an annual scholarship for the top new CFP Professional, this was done as a means to encourage practitioners to look beyond the level 5 certificate, which lets face it is only two years out of high school level.

After 35 years in my chosen profession, I am left dismayed with the lack of focus on creating a real profession. FANZ has tried to be all things to all people except Financial Planners for 5 years now and while I understand the business drivers, it is not what a true professional body does.

I do hope the next CEO has a real understanding of how to build a profession.
On 18 November 2023 at 5:18 pm w k said:
@comprehensive planner: sadly, a lot of people in the financial sector, from the regulators to the advisers, don't understand the concept of financial planning.

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