Heffron's Blog is a collection of comments related to the latest superannuation comings and goings.
Who is representing whom?
by Meg Heffron
An amusing little back story has broken out in relation to the FoFA reforms.
It was recently reported that a deal had been struck between the FPA and ISN (Industry Super Network) to the effect that the FPA would stop fighting the “opt in” rules if the ISN would support the FPA’s push to have the term “financial planner” officially defined in legislation. The whole thing has been denied and so is quite possibly completely true, only a little bit true or a total fabrication by someone trying to bring back the biff. Given the last minute amendments to the FoFA legislation that passed last night, there would appear to be at least some fire behind this smoke.
Regardless – it started a train of thought about member based organisations and how they represent their membership.
I belong to several different professional organisations – each of which is actively involved in liaising with Government and the public debate generally. They apparently speak from a position of authority because they do so on behalf of a large community of members. However, I can’t honestly say that I recall ever actually being asked my opinion on any of the various positions taken by these organisations in the name of their members. Often I agree with them but not always. When I don’t – and in fact if a lot of people like me also disagree – can the organisation still claim to be representing its members? In fact, would the decision makers actually know whether their members agreed or not?
Sometimes an organisation (generally those that consider themselves professional bodies rather than lobby groups) will take a position they know is unpopular with many of their members but which they believe to be in the public interest. The logic is that because they are not conflicted by grubby commercial concerns like the rest of us, they can offer Government impartial advice leading to sound policy. That’s a noble aim and – I suspect – more achievable than trying to represent the interests of a disparate group of members who all want different outcomes. However, it must be a challenge to do this when your members finance the very existence of your organisation via their annual membership fees. What happens when the greater good is in direct conflict with the preferences and commercial interests of most members? Do you just hope that they will keep paying you to trash their businesses because……..they don’t mind going broke as long as the community is better off?
I’m sure the FPA, ISN and everyone else with an acronym does a great job. I wonder, however, whether there are large swathes of the FPA membership who are actually very supportive of opt in and the Government’s reforms generally. They see public pronouncements opposing it that make them cringe and seriously reconsider their membership. Does the FPA (or anyone else for that matter) know whether this group is in the majority or minority? We can speculate all we like but do we know?
Obviously in the ideal world we’d all express our own views to Government, Regulators etc and then they would genuinely know what people thought without the filter of an organisation that carries its own inherent conflicts. However, busy people like things like single points of contact. It’s got to be tempting, then, for Government to quite like the idea that it can “consult” with the entire financial planning population by simply talking to the FPA (or equally the vast numbers of accountants in the country by talking to the ICAA or CPA etc). It doesn’t really mean that they are necessarily getting completely unconflicted input though does it? Perhaps because such as thing just doesn’t exist.