FINSIA recruit and recoil

Ian Rogers

FINSIA’s re-entry into the domain of professional education is yielding uneven returns for the membership body, with FINSIA’s operating loss widening over the year to December 2022 as education revenues stall.
 
On the other hand, after years of declines, FINSIA’s membership numbers have began to climb again.
 
Ever since FINSIA sold its long-established education arm to Kaplan for A$36 million in 2007, it is almost as if one function of the business over the 15 years since then is to systemically deplete this windfall.
 
Retained earnings of FINSIA at balance date were $8.97 million, following an operating loss in CY2022 of $2.01 million. This was up from a loss of $1.54 million in 2021 (and a loss most years since 2007).
 
It has to be discomforting to the high-powered FINSIA board (and its members) that the institute (yet again) highlighted ‘going concern’ considerations in the financial statements, in the face of these persistent losses.
 
“The continuation of the company as going concern is dependent on FINSIA Education, a controlled entity, providing continued financial support to the company,” the report says.  
 
“FINSIA Education has issued a letter of support to its parent company, Financial Services Institute of Australasia … and has agreed to not call any amounts due to FINSIA Education for at least eighteen months from April 2023.”
 
David Cox, partner, financial services assurance at PwC, is chair of the FINSIA board (appointed one year ago).
 
In videos embedded in the annual report, Cox and the institute’s new CEO Yasser El-Ansary spruiked an updated three year strategy, including micro-learning courses that can be undertaken in one hour or less, “more thought leadership” and more engagement with government and regulators.
 
FINSIA said it had 13,819 members at the end of 2022, though comparative data is slender (as shown in the table). Most of the annual reports since 2016 have grumbled about declining membership, and declining membership revenue.
 
On Friday, El-Ansary confirmed that FINSIA’s membership was once more on the rise.
 
“FINSIA’s membership is now growing, and growing on the back of being able to deliver education programs to the market,” he said.
 
“It is delivering for us a strong pipeline of new members.”
 
In this year’s annual report, the board and management have opted for discretion over disclosure in relation to the institute’s comparatively recent re-entry into education.
 
Education revenue was $4.82 million in 2022, up from $4.72 million in 2021.
 
The 2021 annual report had adopted an expansive tone on progress in this field, framed around a cornerstone contract with National Australia Bank and optimism for the future of this division.
 
This year, there is no such narrative, though it points to 9,570 “education completions” and 9,728 new enrolments in 2022. Graduation numbers now exceed 12,000, with another 20,000 expected to soon be studying one course or another.
 
These numbers will mainly relate to NAB’s embrace of FINSIA credentials, as well as contracts with smaller and mutual banks.
 
Progress on signing up one or more of the other three big banks, evidently this is glacial.
 
“We are continuing to engage with all the banks, not just the big banks,” El-Ansary said.
 
“Our model is to deliver education to our members and grow our base as best we can.
?“Education is embedded now. It’s just business as usual now, and very much a core part of our day to day activities.”
Assuring members it is “managing expenses” in the face of persistent operating losses is a perennial of FINSIA reporting.
 
With three quarters of the windfall from the sale of the old education business to Kaplan now whittled away, you have to wonder when and whether Cox, El-Ansary and the board might change tack to preserve this capital.
 
“The answer is the three year strategy,” El-Ansary explained.
 
“My focus is to put into place the building blocks to turn [our] financial health and well-being around.
 
“It’s about being much more relevant to our members, to attract potential members to the ecosystem.
 
“We will grow our membership base.
 
“Over 15 years in membership bodies [our role] is to deliver education and knowledge.”
 
Asked when FINSIA might report a surplus, El-Ansary said “the trajectory we’ve got in place is to deliver a better membership proposition, grow our membership base and be more visible to our members.
 
“If we do those well then I am very confident.”