FAAA member numbers rebound post-June, CFP numbers continue decline

Sarah Abood, chief executive of the Financial Advice Association Australia (FAAA), said the FAAA is pleased with the number of members who have renewed with the newly merged association, with additional members joining and reinstating on a daily basis.

As at mid-October 2023, there were 10,281 individual members (an increase of 6 per cent on the number of 9,670 at 30 June 2023), which represents 66 per cent of advisers in Australia.

“FAAA’s individual membership has largely tracked changes in the overall number of advisers on the FAR, although our membership has declined by less than the overall adviser numbers,” Ms Abood said.

“Having been through a period of reform and uncertainty, the number of advisers has shrunk significantly; however the FAAA continues to represent the vast majority of advisers in Australia. Our ambition is to have as many members as possible.

“The FAAA represents a united voice for the financial planning profession, and there is strength in numbers which is a big factor in how effective we can be in Canberra.”

On Tuesday, ifa reported that according to the FAAA annual report for 2022–23, the post-merger membership numbers have reduced by 11.7 per cent, though the FAAA noted that members that transitioned their membership to the new body after 30 June 2023 will be reflected in next year’s report.

“The membership categories most impacted were the practitioner category, with members experiencing the impacts of factors such as changes to education standards, plus changes to business models and the ongoing impact of onerous regulation,” the report said.

“These factors have resulted in a number of financial planners continuing to leave the profession.”

In 2022, overall member numbers sat at 10,954, while the FAAA said its 2023 membership count is now 9,670.

The 11.7 per cent fall is far greater than the overall drop in adviser numbers for 2022–23, with the profession as a whole losing 599 advisers – a 3.7 per cent drop.

The updated numbers through October are a clear improvement over the end of financial year figure, however it is still down 671 advisers, or 6.1 per cent, from the 2021–22 financial year.

CFP numbers drop 7%

Despite figures pointing to a global surge in CFP professionals, Australia’s net change remains in the red.

According to the FAAA annual report for 2022–23, there were 4,635 certified financial planners (CFP) on 30 June 2023, or 4,615 excluding the retired CFP professional designation.

This represented a loss of 6.7 per cent from the year prior, with Australia having boasted 4,966 CFPs in 2022.

As such, a steady downward trend has begun to emerge, with the Financial Planning Association of Australia (FPA), now part of the merged entity FAAA, similarly reporting a decline in 2021.

While the CFP program’s 142 new applicants might offset some of 2023’s losses, this figure was almost double a year ago, with 281 enrolments recorded over the previous period.

Accordingly, CFP program revenue saw a sharp decline for the year ended 30 June 2023 – $228,000 from $284,000 in FY2021–22.

Across the demographic of students currently enrolled in the CFP program, 60 per cent were male, while the remaining 40 per cent were female. This was a notable uptick from FY2021–22, which saw a 32 per cent female population.

Meanwhile, the youngest student enrolled was 26, the oldest being 68.

In a statement to ifa, the FAAA said: “While CFP numbers have declined slightly in the last financial year, new CFP accreditations will come through in a few weeks as the latest cohort of professionals receive their designations. There are additional CFP members following the completion of the course each semester.”

Is Australia an anomaly?

The Financial Planning Standards Board (FPSB) found earlier this year that the number of CFP professionals worldwide had reached new heights.

With a gain of 9,690 CFP professionals in 2022, the worldwide population almost saw a 5 per cent increase to a total of 213,002, as of 31 December 2022.

“Our robust global community of CFP professionals means people around the world have access to financial planning from those who have committed to rigorous standards of competency, ethics, and practice,” FPSB chief executive Dante De Gori said at the time.

“With global economic uncertainty and the rising costs of living impacting so many, increased access to financial planning advice is of utmost importance to help individuals and families stay on track to reach their goals and achieve financial wellbeing.”

However, Australia’s own drop meant that the country had fallen from sixth position on the global table of CFP professionals in 2021, to seventh in 2022, with South Africa jumping to sixth.

Conversely, increases were most prominent in the Americas and Asia-Pacific. China added 3,382 CFP professionals for a year-end count of 30,182, and now represents the second-largest CFP professional community in the world.