Heath warns Aifa could lose relevance
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Former IFA Association director general Garry Heath has warned that Aifa’s decision to open its membership to restricted advisers could make the trade body less relevant.
Heath led the IFA Association between 1989 and 1999. The organisation later became Aifa when the trade body was set up in 1999.
He says: “When organisations expand their footprint, they become less relevant to each sector of their membership.
“As I understand it, Aifa is having enough trouble as it is attracting IFAs to take up membership. If the breadth of the organisation keeps expanding, it will end up representing nothing for everybody.”
Heath says there are already IFAs who question Aifa’s role under its current structure.
He says: “There are a lot of IFAs who look at Aifa and ask ’what is it doing for me?’ It seems to be some sort of a pacifist army. If you are not fighting for your current constituency, having a wider constituency really makes very little sense.”
But Personal Finance Society chief executive Fay Goddard disagrees.
Goddard, who was deputy director general at Aifa between 1997 and 2009, says: “The new definition of independence is very challenging. Restricted advisers and independent advisers will be facing exactly the same challenges.
“It is important that the advisory community has a strong and united voice on the things that are relevant to all of them. I would hope that people would support this.”
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Readers' comments (1)
Julian Stevens | 28 Jul 2011 10:13 am
It shouldn't be overlooked that Garry Heath's comments are made from the perspective of someone who's affiliated with a very much smaller rival IFA body, namely the Adviser Alliance (of which I am also a member). The last time I checked, AA's membership had barely reached three figures.
Whilst it's true that AA is fighting the battle on fronts for which AIFA appears not to have the stomach, it should be borne in mind that each organisation has different views as to what constitutes the best strategy. It's worth remembering that the FSA eventual reaction to Evan Owen's overtly confrontative style led eventually to the FSA slamming the door and declaring that it was not prepared to entertain any further dialogue with him.
Right now, AIFA's strategy may appear to be a bit too softly, softly by comparison with that of AA but its decision to open its doors to what the FSA (and nobody else) has decided to classify as restricted advisers is, in reality, merely pragmatic. The vast majority of advisers who presently consider themselves WoM independent will pretty soon realise that meeting the FSA's criteria for fully independent are simply impossaible to meet. They will, therefore, have no option but to reclassify themselves as restricted.
Also, AIFA is not blind to the fact that its membership is dwindling and that it needs to up its game if it's to be taken seriously. Who knows ~ the FSA may be persuaded, one way or another, to relax its criteria for advisers to be able to call themselves independent. The important distinction to retain is the difference between IFA's (of whatever hue) and tied or multi-tied agents.
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