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Bodies of Work

ARTICLE BY

  • Samantha Williams
  • Head of Legal & Regulatory Affairs
  • FIA

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Trade associations vs professional bodies: Understanding the subtle distinctions between the two, why they should co-exist and how they provide mutually beneficial services to those they represent.

We are often asked why someone should become a member of the Financial Intermediaries Association (FIA), a trade association, when they are already a member of a professional body or vice versa.

While there are a number of similarities between trade associations and professional bodies, there are also quite significant differences.

A matter of semantics

Wikipedia defines a trade association, not to be confused with a trade union, as follows:

“A trade association, also known as an industry trade group, business association, sector association or industry body, is an organisation founded and funded by businesses that operate in a specific industry. An industry trade association participates in public relations activities such as advertising, education, publishing, lobbying, and political donations, but its focus is collaboration between companies. Associations may offer other services, such as producing conferences, setting industry standards, holding networking or charitable events, or offering classes or educational materials.

Many associations are non-profit organisations governed by bylaws and directed by officers who are also members. (FEC: Solicitable Class of Trade Association).”

On the other hand, it defines professional associations or professional bodies as follows:

“A professional association (also called a professional body, professional organisation, or professional society) is a group that usually seeks to further a particular profession, the interests of individuals and organisations engaged in that profession, and the public interest.

“The roles of professional associations have been variously defined: ‘A group of people in a learned occupation who are entrusted with maintaining control or oversight of the legitimate practice of the occupation;1 also a body acting ‘to safeguard the public interest;2 organisations which ‘represent the interest of the professional practitioners,’ and so ‘act to maintain their own privileged and powerful position as a controlling body.’”

The differences are nuanced, but in general, while a trade association will focus predominantly on representing and supporting its members’ interests and will work to tackle different challenges faced by those they represent, a professional body’s objective is rather to advance a particular profession and the interests of those engaged in that profession as well as advancing and maintaining public interest in the profession. In many cases a professional body will be established to monitor and regulate the practice of individuals in the sector it represents. Furthermore, a condition of membership for a professional body is often dependent on the passing of professional examinations set by the professional body, as well as ongoing periods of assessment.

Trade associations, while advancing the professionalisation of the industry, do not monitor or regulate and while they may have criteria to specify who is eligible for membership, this is not dependent on the passing of professional examinations or ongoing assessment by the trade association.

Through the South African lens

Arnesen and Associates (2016), as cited in Chetty et al. (2019, p.10), offer a distinction between a professional body and a trade association in the context of South Africa as follows:

“A professional body has the primary goal of ensuring a standard for the sector it represents. They can be statutory and non-statutory. That standard is a “guarantee” of competence of the duly designated members of the professional body. A trade association is, in the simplest of terms, a body set up to serve and protect its members. Trade associations are not established in terms of any overarching education legislation.”

Where the FIA fits in

The Financial Intermediaries Association is a trade association that represents over 1700 businesses operating in the intermediated market of financial services (life, non-life, employee benefits, financial planning, health and discretionary investment management). Our members are all financial services providers who collectively employ in excess of 45 000 people countrywide. The FIA strives to protect, develop, educate, promote and influence the professional service of our members and their employees, so that consumers can benefit from the value of advice, risk management and product fulfilment.

While professional bodies may also conduct lobbying activities on behalf of those they represent, the focus is often more on professional designation and adherence to the requirements to maintain that designation and hence it is our view that the two different types of body can co-exist, both providing mutually beneficial services to those they represent and also sharing a united voice for their members in respect of matters of common interest.

—

  1. Harvey, L. (2004). “Professional body”. Quality Research International. Analytic Quality Glossary. Archived from the original on 2019-02-16. Retrieved 2008-09-14.
  2. ^ Jump up to:a b Harvey, L.; Mason, S.; Ward, R. (1995). Role of Professional Bodies in Higher Education Quality Monitoring. Birmingham: Quality in Higher Education Project. ISBN 1-85920-108-3.

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