AFA cracks down as it ponders merger
The Association of Financial Advisers (AFA) has hinted at a possible collective merger with other industry associations at its annual conference in Launceston, while also announcing a hardline stance against soft dollar remuneration.
AFA president Robin Yates suggested the AFA, which has close to 1,000 members, is considering a possible merger with two or three other associations and expects to reveal more details within a month.
However at this stage he would not confirm those associations involved beyond ruling out the larger industry bodies such as the Financial Planning Association (FPA) and the Investment and Financial Services Association (IFSA).
The AFA has also gone one step further than recent moves by other industry groups in dealing with the issue of soft dollar payments, by requiring its members to record all soft dollar remuneration down to zero dollars on a practice register as of January 1, 2005.
The move comes just weeks after Australia’s chief industry body for accountants, the CPA, undercut the FPA/IFSA requirement that all soft dollar forms of remuneration above $300 be recorded, by requiring that all items worth more than $100 be noted.
“Yes even a cup of coffee will have to be included,” Yates said.
According to Yates, AFA members do not have a problem with the limit being set so low.
“So far the response we’ve received from members has been very positive. We didn’t feel it was necessary to try and draw the line at $300 or $100. . . I mean where do you really draw the line with these sorts of things?
“We thought it would be easier if we just simply said that everything should be recorded so if clients, members or ASIC [the Australian Securities and Investments Association] want to come and have a look at it it’s all there,” Yates said.
He added that although the new requirement will be mostly adhered to in good faith and within a self-regulatory environment, the AFA will be conducting random spot checks “from time to time.”
Members found without a practice register and members identified as failing to record soft dollar benefits on their practice register could face expulsion from the association Yates told delegates at the conference.
Unlike the FPA/IFSA code, members of the AFA will not be banned from taking some forms of soft dollar remuneration such as free travel and accommodation to conferences.
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