10 | Financial Planning www.financialplanningmagazine.com.au

Chairman

“We stand on the shoulders of those who came before us.”

Looking back at his seven years on the FPA Board, Matthew Rowe is justifiably proud of the achievements the FPA has made, most notably moving down the path of professionalism by lifting the educational and professional standards of planners in Australia.

It’s been a tough gig for the FPA chairman, who after seven years on the Board with the past four spent as chairman, relinquishes his position on the Board at this year’s AGM in November. But it has been a gig that Matthew has embraced with passion and enthusiasm that some may say almost verges on the fanatical.

Reflecting back over the past seven years, Matthew says his motivation to join the Board in 2007 was due to a strong belief in giving something back to the profession that he has received so much from. He recalls some sagely advice: “A very wise person once told me that a professional is a debtor to their profession.”

The last seven years have been a

tumultuous and evolutionary time for the profession. But Matthew sees the real change over that period coming not from regulation but through the positive difference coming from within the profession to the way in which planners want to be seen.

“Financial planners are changing the language of those in management positions within their organisations. The language of sales, product and distribution is going. Planners now speak of value, advice, client and quality,” Rowe says. “I have seen a growing confidence in my colleagues that our professional obligation over-rides that of any management short-term incentive. It is this sense of professional obligation to do the right thing that will drive further change from within.”

HighlightsMatthew is quietly satisfied with the achievements the FPA and Board have been able to deliver to members over his seven

year tenure, but when asked to pick some highlights, his praise quickly returns to the passion and engagement shown by members, FPA staff and the Board to steer the industry towards becoming a profession.

“It has been so important to have a team that has passion for the profession of financial planning, which can only come from being emotionally invested with our cause. I am reminded time and time again, that people who are financially invested only expect a return, but people who are emotionally invested, seek to contribute.

“We have clarity of purpose in the FPA. This has enabled our Board and leadership team to operate well above industry politics and self-interest that had at times plagued our organisation. The only faction in the FPA is the faction of individual financial planning professional practitioners and it is a faction of over 10,000 strong.”

After seven years on the FPA Board, with the last four as chairman, Matthew Rowe steps down in November, but not before he reflects on just how far the profession has come in that time. Jayson Forrest reports.

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Elaborating on the above point, Matthew concedes that the 7 April 2011 vote to change the FPA’s membership structure, by removing the large Principal category to become an individual practitioner focused association, was a definite highlight for him as chair of the FPA.

With 94 per cent of practitioner members voting in favour of this change at an Extraordinary General Meeting, it was a defining moment for the FPA in its journey to become a professional association. It also provided the Board with an overwhelming mandate from members. “It was the day,” says Matthew “that the FPA was born as a professional association in the true meaning.

“The vote meant we moved on from being an industry association representing the

commercial interests of a very diverse membership, to become a professional association acting in the public interest on behalf of individual financial planning professional practitioners only.

“The vote enabled us to say very clearly: this is who we are. ‘We’re a professional body for individual practitioners who act in the public’s best interest.’ We never had that clarity before. It gave us clear messaging around our purpose: what we want to do; why we exist; and our values.

“It is something that took many people almost 20 years to achieve. As such, it is important to recognise that in this endeavour, we stand on the shoulders of those who came before us.”

Matthew says it was really from 7 April 2011 that the organisation

and members came together, because they were all lined up behind a common purpose.

“Every single decision from that point was based on: is this in the public interest, and is this what a professional body should be doing. From there, we formed our policy framework, so that now we have four policy pillars when we make any decision: public interest, professional practitioner, government and regulations, and Code of Professional Practice. This made decision-making easier and quite transparent.”

Today, the FPA is financially sustainable, with its operating costs met by individual membership revenue only. It is not beholden to any third-party or competing interests, which Matthew is justifiably proud of.

FoFAWhen it comes to FoFA, Matthew is surprisingly pragmatic. He agrees the reforms have been challenging for some members, but believes most practitioners have been evolving their business and advice models for some years, towards implementing the principles FoFA originally set out around client best interest and the removal of conflicted remuneration.

But he is less accommodating around the way the profession was treated by government and competing stakeholders.

“The real challenge was having our profession treated like a political football. There are a lot of very good members of the FPA who do the right thing each and every day. They suffered a lot over four years of FoFA implementation, but we will be stronger for it. The scandals that have plagued financial planning have acted as a catalyst for a lot of lids to be lifted on the unacceptable, the conflicted and

low standards that are well past their use by date.

“The Australian public have told us they don’t accept RG146; they don’t accept conflicted remuneration; and they will not tolerate it if we don’t act in their best interest. They are telling us they expect financial planners to be someone who they can trust and respect, because what we do is of vital importance to them.”

10-Point PlanMatthew is noticeably proud of the FPA’s 10-Point Plan for the future of the financial planning profession. He sees it as an important and pro-active initiative by the FPA, which has already garnered support from ASIC and Government.

The major players in financial services have adopted significant elements of this plan for their advisory networks. This is a significant achievement for the direction the FPA is taking the profession, in preparing planners for the next steps required for a clear separation between product and advice, and in delivering professional autonomy for financial planners.

“The FPA is the only body that has put forward such a comprehensive plan. There might be elements of the plan that people disagree with, or perhaps need to be refined, but ultimately, leadership is about making decisions and not simply making noise for the sake of media and profile. In this respect, the FPA is certainly relevant. I measure relevance through the change produced for financial planning – the outcomes delivered, and not the noise made.”

Matthew is confident that the FPA will look back in 12 months, after the next PJC Inquiry, with 90 per cent of the 10-Point Plan having been implemented. “Our

12 | Financial Planning www.financialplanningmagazine.com.au

“A very wise person once told me that a professional is a debtor to their profession.”

Chairman

plan will deliver good outcomes for consumers and therefore, the profession can only benefit.”

Standing for what is rightHowever, in the fallout from the CBA financial planning scandal earlier this year, the FPA (and Matthew personally) faced strong criticism over its tough stance over the issue, particularly its call for a National Summit on financial advice.

Matthew concedes that of his entire professional career, this was the most difficult time for him, both personally and professionally. It was a lonely time for the chair of the FPA.

“This was an issue playing out relentlessly in the national media, day-after-day, and there appeared to be no circuit breaker. The scandal had reached out beyond the industry into the lounge rooms of ordinary Australians to become the topic of conversation at family barbeques. The scandal became a character test for financial planning and like all character tests, much is revealed through the choices people make.

“With the benefit of hindsight, could I have done some things differently – yes, of course – but saying this, we made a choice that we would not defend the indefensible. We made a choice to set policy positions that serve the public interest. We made a choice to put ourselves and our professional body in harm’s way to stand with Australians for a better financial future,” he says.

“As always, history will cool emotions allowing people to calmly judge actions taken and outcomes will be clinically assessed with the benefit of hindsight. We only have to look at the impact our actions are now having on lifting

educational standards amongst our major institutions to gain an insight as to how history may judge whether the ugliness was worth fighting through.”

And considering this was the loneliest time of his professional career, would he do it all over again? “Absolutely,” he says. “It was the right thing to do.”

BoardWith the FPA Board elections coming up in November, Matthew has some final advice for any members considering nominating.

“Leave any political or commercial agenda you may have behind. No matter what platform you think you are elected on, the FPA’s purpose is to stand with Australians for a better financial future. If you don’t get this ideal, then you should expect your behaviour to be called upon very quickly and repeatedly by your Board colleagues.

“Undertake the Australian Institute of Company Directors (AICD) program, because being a good practitioner doesn’t necessarily mean you have the skills to be a strong contributor as a Board Director – understand that you are there to govern not manage.

“Most importantly, serve time within a Chapter or Committee, get to know the organisation, understand our culture, become informed and make a contribution at a grass roots level. This grass roots contribution will hold you in good stead amongst the approximately 900 colleagues you will need to vote for you. It will also show your potential Board colleagues that you earned your seat with them, having done the same hard yards they have.”

The futureSo, what is the future looking like for the FPA and the profession?

Matthew pauses. “It’s a great question.”

He looks towards a future post the recent Senate inquiries into FoFA and ASIC, and the PJC inquiry into Standards, Education and Ethics.

“Firstly, I firmly believe that in the not too distant future, you will only be able to call yourself a financial planner if you are a member of an approved professional body. The term financial planner/adviser will become restricted in law and it will be linked to membership of a professional body.

“Secondly, RG146 will be completely revamped. You will now need an approved degree as a minimum entry requirement into our profession and you will be required to hold membership of an approved professional body.

“Thirdly, there will be a national register – available to the public – of all financial planners giving Tier 1 advice to retail clients. It will detail your education, work history, professional membership and standing, your licensee and ownership. It will help us track and remove the bad apples. It will help consumers verify the good planners and help us get rid of the spruikers.

“And fourthly, the public will look for Certified Financial Planner® practitioners as the trust mark in planning. We know that 94 per cent of consumers looking for a financial planner would rather seek out the services of a CFP over a non CFP.”

LegacyWhen asked to talk about his legacy as chairman of the FPA, Matthew is characteristically uncomfortable. It’s not a subject he enjoys addressing.

“Let members and the profession

judge me for what I’ve done,” he says.

“No one really understands what it’s like to be the chair of the FPA unless you have actually done the job – it’s unrelenting. I think every chair that the FPA has had over our 20-year history has left the organisation in better shape than they found it. To me, this is the mark of success. I believe I have continued in the tradition of our chairs and have left the organisation in some way better for being there.

“The team at the FPA has achieved more than I ever thought possible when I first joined the Board seven years ago. It’s been a remarkable journey.”

So, does that mean he has achieved all that he has set out to do?

“I think so,” he says. “There is nothing left on my ‘to do’ list, other than to thank the members and supporters who take time away from their professional efforts and families to make their own contribution to our professional community. Whether they are Board members, Chapter Chairs, Committee members or volunteers for Future2, they serve to form part of our professional community; they contribute to something more than themselves.”

As a parting comment, Matthew is keen to end this interview the same way he began it.

“I took on the role as chairman to make a positive difference, and I believe in some ways, I have made a positive difference,” he says.

“I do know one thing though, I am very proud to call myself a Certified Financial Planner® practitioner and an FPA member, and I am part of a professional community that stands with Australians for a better financial future.”

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