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Categories:Politics

The politics behind the back-bench RDR revolt

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iain-anderson.

The spending review was not the only moment of high political drama at Westminster last week.

For the first time since the election, the new intake of MPs had the chance to opine on the future of the IFA sector and it seems intermediaries have a lot of new friends.

Last week’s Treasury select committee appearance by Aifa caused quite a stir, with Aifa being accused by Conservative and, perhaps more surprisingly, Labour MPs of not lobbying hard enough on grandfathering IFA interests through the RDR process.

A Westminster Hall debate inspired by new Tory MP Harriett Baldwin reacted badly when Treasury minister Mark Hoban, responding to MPs concerns, compared current IFA entry level qualifications to “a diploma in shift management at McDonalds”.

Needless to say, many MPs and IFAs were not lovin’ it.

Why this change in the political mood? There are several things to note.

First, any effective lobby needs to understand its audience. An analysis of the new intake of MPs - the Conservatives in particular - which Cicero Consulting undertook during 2009 - showed a group of people who would be prepared to act in a highly independent and pragmatic way.

Many of the new intake - over a third of the new Parliament - have had successful business careers and have a natural empathy with entrepreneurs. It was this perspective we witnessed in last week’s debates from Baldwin, Jesse Norman and Andrea Leadsom - three new MPs who have worked in the financial services sector and have an understanding for it.

Second, the expenses scandal has had a marked impact on the propensity of new MPs to act directly in the interests of their own constituents. On the doorstep at the election, this issue came up time and time again and in all my dealings with new Parliamentarians they are fiercely aware of where their loyalties lie. Many of them have been elected on their second or third attempt and feel they owe everything to the electors.

It was this spirit which Treasury select committee chairman Andrew Tyrie noted when he told the IFA delegation that the MPs were here to reflect their constituents’ concerns about access to advice following the RDR.

Finally, many organisations have not adapted to this new Parliament and to the impact of the coalition on political life. Many of them are still deploying the arguments, the lobbying language used in the old New Labour era. The game has changed and those who are lobbying need to understand that - something we did not see from the IFA sector at last week’s select committee appearance.

What should IFAs and their representatives do about it?

I do not believe the RDR will be rowed back in its overall direction on remuneration and qualifications - Mark Hoban continues to make this clear - but there is clear scope for the implementation timescales to be phased in more gradually.

Aifa and IFAs more generally need to embark on an intensive campaign to talk to the new Parliament. As the draft legislation shapes up for the new UK regulatory bodies in the first half of 2011, there is a window of opportunity to adapt the RDR before MPs start voting from next summer.

Given what we have seen last week, IFAs should take it.

Iain Anderson is director and chief corporate counsel at Cicero Consulting

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Readers' comments (10)

  • I think you need to do some analysis of IFAs!

    Then do an analysis of AIFA, find out who controls it, what their MO is.

    Or, you could save lots of time and ask me.

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  • Nothing to criticise a good well thought out article.

    It is the time for IFAs to contact their MPs and make sure they get confirmation, a full 3 hour debate in the house of commons is the very least that IFAs and this industry deserve.

    Put pen to paper now if you have not already done so.

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  • Iain I agree, I do not believe the RDR will be rowed back in its overall direction on remuneration and qualifications (nor do I want to see that happen) - but there is clear scope for the implementation timescales to be phased in more gradually and a demonstrable and proveable need for this to happen (if only I could remember which of the FSAs own commisioend reports said this!)

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  • Between Aifa ,the FSA and Mark Hoban its like watching the Muppet show.
    Iain & Ron are right that IFAs need to embark on an intensive campaign to contact their MPs directly.It is now our only option left to get some common sense into the RDR debacle.

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  • It is now our only option left to get some common sense into the RDR debacle.

    Common sense......RDR......Government......FSA

    Surely these are not compatible words

    However, we have never had, nor will we ever have, a better time to rally the troops to action.

    Everyone now needs to write to their MP with THEIR concerns or has apathy set in again already

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  • Between Aifa ,the FSA and Note Hoban its same watching the Muppet demonstrate.
    Iain & Ron are moral that IFAs pauperization to get on an qualifier movement to tangency their MPs straight.It is now our exclusive deciding liberal to get whatsoever average judgement into the RDR collapse
    ==========
    Mortgage

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  • Iain gives a balanced summary and yes much of RDR will go ahead but this is not the debate.

    The debate is the decimation of the independent sector through the lack of grandfathering without cause!

    Iain's Cicero Consulting lists a number of banks as clients and HSBOS are one. So what does HBOS think of RDR:

    Head of HBOS Paul Selly said "Bancassurers are set to benefit".

    Mark Hoban MP also received advice and services (not payment) of £150,000 from Compliance Company, Oliver Wyman Ltd who also list their one of their core business activity as Corporate and Retail banking and the identification of opportunities for growth.

    Perhaps it time our MPs stopped taking advice from banks and started to look at the consequences of what they are doing.

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  • Evan is spot on as usual!

    AIFA is funded by Networks and Networks will benefit from the loss of 50% of their members and the gain of 100% of their trail. Work it out! Then calcualte the increase in buyout value based on the Networks trail! Hey Presto you have the answer to the Silence of the Networks!

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  • Take Five.

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  • I couldn't possibly have put it better then Vishal Kumar. Well said son.

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