Reflecting on the past 12 months, Financial PlanningAssociation (FPA) chief executive Jo-Anne Bloch describes the rollercoaster ride that was 2006 as three large shocks alongside a very buoyant market.
According to Bloch, equity markets performed well and advisers were busier than ever responding to an unprecedented demand for advice.
She said there was a “very positive feel” across the whole industry, citing research that indicated the majority of financial planning clients were happy with the service they received.
However, there were also a few clouds overshadowing the industry’s good fortune, which Bloch pinpointed as the effects of the Westpoint collapse, the negative results of the Australian Securities and Investments Commission’s shadow shopping exercise and the enforceable undertaking of AMP.
“What sits alongside [the year’s positive results] is the very devastating impact from Westpoint and the fact that we have FPA members involved in a number of complaints,” Bloch said.
“Shadow shopping was a big issue for us and while the result was better than the previous, one in five on the less than satisfactory end is still not good enough.
“And the other issue was AMP, which was a bit of a shock to everyone as well.”
Bloch added that the snowball effect of these three factors combined with the early departure of former FPA chief executive Kerry Kelly resulted in a difficult period of adjustment for the association.
“The first six months were a combination of a leader who had just left and the chair having to step in and take on the running of the FPA, having had shadow shopping and Westpoint very recently announced,” Bloch said.
“I think that was difficult for the FPA, but by the same token we introduced the most significant set of principles I’ve ever seen — the conflict of interest principles.
“So despite all that, the board stuck with its strategy to improve and increase professional standards.
“[Therefore], you’ve got a buoyant market and growth [but] a community that isn’t as confident as you want, and then you’ve got the FPA responding by continuing to increase professional standards and by trying, through our value of advice campaign, to improve community confidence.”
From Bloch’s perspective, the major themes for 2006, industry-wide, were professional standards, consumer confidence and superannuation.
She said the FPA’s top focus for the year had been professional standards, as well as confidence that the association was genuinely moving towards becoming a fully-fledged and well-recognised professional body.
— Sara Rich
