FPA back in the black

Although it contributed almost half a million dollars to its new television advertising campaign, the Financial Planning Association (FPA) has posted an after-tax budget surplus of $1.187 million for the year to June 30, reversing a deficit of nearly $2 million in 2003-04.

Its 2004-05 performance is in line with the surprise forecast made by the organisation in April this year of a rebound in its full-year financial position on the back of a successful 2004 annual convention.

The FPA had pinned the 2003-04 deficit largely on maintaining an expanded education program for getting financial planners ready for the Financial Services Reform (FSR) regime.

In fact, a 32 per cent fall in expenditure resulting from the ending of its provision of entry-level education, as well as lower employee-related expenses made a key contribution to the operating surplus for 2004-05. Employee expenses fell by about $2.1 million, from $5.5 million in 2003-04, to $3.4 million in 2004-05.

The 2004-05 surplus was achieved on ordinary revenues of nearly $13.7 million in 2004-05, down from $16.9 million in the previous year.

A fall in membership revenues from student members as a result of the FPA’s move out of entry level education resulted in a fall in education income to $1.157 million at June 30, 2005 (from $3.2 million in 2003-04).

The FPA reported an increase in accumulated members’ funds to $5.047 million as at 30 June 2005, from $3.86 million at the end of 2003-04.

FPA chair Kathryn Greiner said the 2004-05 result “demonstrated that the FPA had a tight grip on financial management, while the delivery of member services remained uppermost”.

She said a proportion of the surplus was committed to raising community awareness of the value of financial planning advice, and of the Certified Financial Planner (CFP) designation.

A campaign in May and June on finding professional financial planners and CFP practitioners saw advertising and marketing costs increase by $613,505 during the year.

In addition, the board committed $400,000 to the development of its current Value of Advice campaign, which was expensed in the 2004-05 financial year.

Among the “significant milestones” listed in the 2004-05 annual report was the introduction of the FPA/Investment and Financial Services Association Code of Practice on Alternative Forms of Remuneration and the Guide on Rebates and Related Payments.

Another was the release for a six-month consultation period of the draft principles for the management of perceived conflicts of interest.

Others milestones were the FPA’s collaboration with the Australian Securities and Investments Commission on its Super Switching Q&A Guide and the lobbying of the Federal Government on refinements to FSR, particularly concerning Statements of Advice.