Aifa could vote on restricted advice firms
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Aifa says it will consider holding a member vote on whether to allow restricted advisers to join after the RDR deadline.
An Aifa spokesman says a decision will need to be made about membership criteria for firms that decide to become restricted or offer a restricted service alongside independent advice.
He says: “Any decision to offer restricted advice is one that individual adviser firms will need to consider over the next couple of years. Should member firms elect to offer restricted advice alongside independent advice, then Aifa, through a process determined by its elected council, will need to make a decision about its membership criteria and who it represents.
“It is, however, a theoretical question which will only arise in the future. We will continue to maintain a healthy dialogue with members on the challenges and opportunities facing the profession.”
Aifa published its Advice Horizons RDR paper last month which encouraged advisers to consider offering restricted advice, saying it could generate efficiencies and open up new opportunities.
In 2005, when Chris Cummings took on the role of Aifa director general, the trade body decided against allowing multi-tied firms to join following a member consultation.
Speaking to Money Marketing before his departure from Aifa last week, Cummings said a decision should not be made by the Aifa council. He said members should again be given a vote on whether restricted advisers should be allowed to join.
He said: “All the council members are elected, so that does give the council a legitimacy on this issue but I think something as big and as fundamental as this should always be thrown back into the hands of members.”
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Readers' comments (14)
Nick | 16 Sep 2010 9:26 am
do I care who Aifa admit as members....NO!
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Anonymous | 16 Sep 2010 9:38 am
I think AIFA should make sure that it clarifies to all its members involved in this vote what 'Restricted Advice' actually means!
It does not (as many advisers I speak to think) mean that advisers are Multi-Tied. There is NO link between the current Multi-Tied regime and Restricted Advice.
If members do not understand the fundamentals of what they are voting for they will not necessarily vote appropriately.
It would, of course, help if the press understood these terms and what they mean and make these meanings clear in their articles rather than add to the confusion by linking them inappropriately.
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Evan Owen | 16 Sep 2010 9:53 am
I name this good ship AFA, God bless her and all who sail in her...
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Anon | 16 Sep 2010 9:53 am
Reminds me of the Life of Brian sketch were the PFJ (Peoples from of Judea) take endless meaningless votes on trival matters whilst the real issues are going off around them.
They end up singing "For he`s a jolly good fellow" to their member, Brian while he is being crucified instead of rescuing him.
You wont have a choice people, your membership numbers are going to be decimated to the degree that it wont pay your salaries or pensions and what you say wont matter to the power that be, if it does anyway.
What makes you think the restricted advice people would want to join AIFA after thier toothless reponse to the Keydata and Lifestyle atrocities and their muted resonse to the secondry attack by the FSA with the Wills and co STOCKBROKER levy being lumped onto the IFA community "Without even a by your leave" (another Life of Brian quote).
I wouldnt be at all surprised if the Resticted community sets up its own trade body but ensured it had some teeth and the gumption to fight their corner aggresively.
Im afraid singing "For he`s a jolly good fellow" doesnt work with the FSA.
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Anonymous | 16 Sep 2010 10:17 am
Given that there will be no significant advantage (in terms of costs or reducing the regulatory burden) by offering restricted advice rather than maintaining IFA status, Aifa's considerations are likely to prove pretty irrelevant in the great scheme of things.
More to the point, given their lacklustre performance in fighting the corner of IFAs over the years and the disenchantment with Aifa that is widespread in the IFA community, perhaps now is not the time to be talking about restricting acess - Aifa might be glad of every member it can hold on to a year or two from now.
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Tom IFA | 16 Sep 2010 10:20 am
Didn't take the new guy long to show that rather as expected he really doesn't understand the IFA world - I must now question my membership.
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Simon Mansell | 16 Sep 2010 10:58 am
This move will accelerate AIFAs fall from grace!
AIFA have "previous" on this! They appointed David Severn, in 2005 the former anti ifa head of retail investment projects at the FSA. Shortly after AIFA moved to include tied advisers!
AIFA compliance with RDR has rewarded them will by pulling their fee base from under them. As a result many thousands of good honest independent advisers will face the destruction of their businesses and not a shot fired in their defence (several blanks maybe).
AIFA now faces a huge reduction in future fee income because there won't be any IFAs left to pay! In an attempt to replace this income loss AIFA will be forced to prostitute it’s identify. I don’t blame them but do feel this is a signpost to existing IFA’s who might feel their money would be better placed elsewhere – Adviser Alliance or perhaps into the Keydata Judicial review?
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Julian Stevens | 16 Sep 2010 11:37 am
Agree with the first post ~ Do I care any more what AIFA does? Unless AIFA produces convincing evidence of its achievements being worth what we pay to support it, then why maintain our membership if we have very little idea of what we're paying for?
For the most part, merely lobbying an all-powerful, tyrannical and unaccountable regime that acts entirely without regard for the Law of the Land appears to accomplish very little. Okay, so AIFA got the RDR requirement of QCF Level 6 lowered to QCF Level 4. Big deal ~ in all probability, the FSA has merely postponed it.
What the FSA doesn't wish to negotiate on, it simply rejects and there's nothing that AIFA can do about it. "Some battles", I've been told by a senior member of the AIFA board, "are unwinnable". Okay ~ so tell us how many battles AIFA has lost (and the issues on which those battles were pitched) by comparison with how many it's won.
As for WoM vs. Restricted Advice, the only principal difference as far as I can see is that WoM advice supposedly entails a hugely time consuming and expensive research exercise for every single client regardless of their particular circumstances and budget. Okay Mr Client ~ you can either pay £120 for a report based on my knowledge and experience without going all round the houses explaining how I'll have arrived at my particular choice of product and provider or you can pay £1,200 for the full monty job which will arrive at pretty much the same conclusion but take 30 pages to do it instead of 10. Which do you prefer?
Why are people so obsessed with trying to fix what ain't broke? It seems to be a self-justifying contagious disease cultured within the bowels of Canary Wharf. Like so much else.
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Gerry Cooper | 16 Sep 2010 12:13 pm
Let's say I'm an IFA and at the present time, I choose not to advise clients in respect of, say structured products and, say unregulated investments.
Sound familiar?
That's fine at present, that's my decision.
Post RDR, if I choose to continue as before, I will, presumably, become a restricted adviser.
How many current IFAs will this describe?
A significant proportion I would expect, and a Anon above has said, I suspect there is currently a great deal of confusion surrounding this.
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Anonymous | 16 Sep 2010 2:31 pm
@Tom IFA - the 'new guy' hasn't started yet so this has nothing to do with him! For your information he does understand the IFA world so give the guy a chance and check your facts before posting silly comments!
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