Warning association numbers could fall

• Tweet

Financial Advice New Zealand numbers have lifted during the lockdown – but there’s a warning that there might be a slump ahead.

Monday, May 25th 2020, 5:43AM 5 Comments

Katrina Shanks, Financial Advice New Zealand

Chief executive Katrina Shanks said there had been 20 new applications for membership in the past month.

Normally, a typical month would include both new applicants and advisers retiring, the numbers of which would even each other out. But there had not been those retirements in recent weeks.

There is now a total of 1,655 Financial Advice NZ members.

In April last year, it had 1,680.

At the time of the creation of the new association, the IFA, PAA and NZFAA had a combined total of about 1,800 members.

Shanks said numbers fluctuated between 1,650 and 1,700.

Former IFA chief executive Fred Dodds said Financial Advice NZ’s membership was static.

But he said numbers would dip when the renewal notices were sent out in June. "If they're not getting new people in that's a bit of a problem."

At the IFA, numbers dropped by between 3% and 5% when people were asked to pay their subscriptions, he said. It could be hard for advisers to stomach association fees on top of PI cover, the cost of a CRM, FMA levies, the cost of licensing and AML audits.

"This is a bit of a tricky environment, advisers are trying to find their feet and decide which path they are going to walk down."

He said the association had about 20% of active advisers in its membership. But it needed to attract younger membership because its average age would be higher than the industry as a whole.

Shanks said the goal was still to grow the association. For some advisers, it would take time for the association to prove itself and show that it did have a voice for the sector, she said.

The work done during the lockdown to provide webinars and health and safety training had helped to show the association’s value, she said.

There had been 4,000 attendees at Financial Advice New Zealand’s Covid-19 webinar series, she said.

"We’ve had good outcomes for advocacy in the past three to four months."

Shanks said while the association had discussed taking a financial advice provider licence under the new regime, it had not been seriously considered as an option.

"When we talk about the changing environment as an organisation we talk about where we fit into the ecosystem."

Bruce Patten, who is head of growth at NZFSG, said it was possible that mortgage brokers could break off to form their own association if their numbers were high enough.

"However even within the industry there are other associations and I'm not sure the New Zealand market is ever going to be big enough to warrant it. There is strength in numbers when it comes to financial services, and you are better to have a single voice than several voices.

"The problem with the industry as a whole is that there are so many strong personalities that you can never please everyone all of the time. That is why you have splintering groups that set up their own associations with their own agenda and don't take into account the benefits of having a single approach. It's no different to the reason National vs Labour? Politics."

It had been suggested that the association could attain scale by merging with other groups, such as IBANZ.

Shanks said that could potentially give them a strong collective voice – and offer those groups access to its tools, standards and conferences.

Mel Gorham, chief executive at IBANZ, said that was not something that was being considered at this stage. She said it was felt that Financial Advice NZ was working in a different industry segment.

Tags: Financial Advice New Zealand

Comments from our readers

Sign In to add your comment