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MANAGEMENT DISCUSSION & ANALYSIS
The following is the management discussion and analysis of the financial condition and results for The Financial Advisors Association of Canada (TFAAC).
The audited consolidated financial statements of TFAAC show current year expenses exceeding revenues by $2.5M that includes $571K net unrealized losses on investments, $256K gain from Advocis Broker Services Inc. and total assets of $16M.
Advocis Broker Services Inc. (ABS), the wholly owned insurance brokerage arm of TFAAC, reported a gain from operations of $256K, a $431K year over year increase in net income compared to 2021. The significant capital investment made in 2021 paved the way for ABS to embark on growth opportunities that would not have been possible without an updated infrastructure.
As the dynamic of the pandemic changed in 2022, the Association shifted to the return of in-person events, programs and activities. Many of the 40 local chapters across Canada offered combinations of virtual, in-person and hybrid solutions for their high-quality educational programs and community events. The summer of 2022 also saw the return of both the Banff and the Atlantic schools.
Unfortunately, the shift in delivery methods impacted both revenue and costs of events. Costs for in-person events increased significantly compared to pre-pandemic levels. Most in-person events required a virtual component as many individuals and companies remained cautious to return to in-person events, adding additional costs. Revenues were often reduced as volumes of many in-person registrations were below expectations.
While Membership revenue increased slightly compared to 2021, a combination of natural attrition and industry demographic shifts along with rising inflation, left growing membership challenging. Growing membership remains a top priority as the Association seeks new and innovative ways to engage advisors of today and tomorrow.
The demand for education programs declined during the year as Advisors adapted to the changing dynamics of the pandemic. Rising costs also impacted Advocis’ designation programs as well as continued requirements for maintenance and updates to programs including additional costs incurred as a credentialling body for Ontario.
Operating expenses were up 12% compared to 2021. Increased travel costs were a primary contributor to the year-over-year costs as in-person events returned, including the annual Chapter Leadership Conference. By mid-year, a hybrid work environment was implemented for staff, supporting the Association both in the office and remotely. Other contributing factors included additional staffing for the member services department, additional marketing and communications and additional consulting costs to support the Digital Transformation roadmap.
No doubt, the impact of the world opening after the pandemic impacted TFAAC significantly. The Association cannot continue with expenses exceeding revenues and Management has committed to significant changes in 2023 to ensure that TFAAC continues to provide quality education, community and support to members and the industry for many years to come.