FPA, AFA memberships strong despite adviser exodus

Recent findings from Adviser Ratings have revealed that both the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) have grown their membership base in proportion to overall industry numbers.

Specifically, as the profession’s numbers have dropped, so have the associations’ numbers, but at a slower pace. Namely, more than half of all advisers (56 per cent) are now members of at least one of the two associations, compared with 47 per cent in 2018.

However, overall memberships have indeed dropped since 2018, with data revealing that the FPA had just shy of 9,500 members at the end of 2018, equating to 36 per cent of advisers at the time. Meanwhile, the AFA had just over 2,700, equalling 9 per cent of all advisers.

This is in contrast to fewer than 7,000 members at the FPA in December 2022, and fewer than 1,800 at the AFA.

Despite the losses, Adviser Ratings said the increasing proportion of members at both groups may either indicate a relationship between adviser retention and membership, or an increased inclination among advisers to join the two big groups amid industry volatility.

“Advisers who are members of an association may be more committed to staying in the profession, while changes to professional standards and the advice industry at large may have persuaded advisers to hold onto their membership or join an association,” the report said.

This is further reinforced by the result of the merger vote in February which saw an average of 96.5 per cent of AFA votes and 96.7 per cent of FPA votes support the union, significantly surpassing the 75 per cent required for it to proceed.

Commenting on the outcome, Adviser Ratings explained that feedback from members suggested the groups were increasingly fighting similar battles and advocating for similar issues at a time when adviser numbers were dwindling.

In turn, the new Financial Advice Association of Australia has since set a mandate to grow the profession.

This is a welcomed development for the industry, as last month, Adviser Ratings pointed to almost one in four advisers thinking about departing the profession, alongside recent data showing the number of advisers had dropped well below 16,000.