New faces in Parliament offer fresh hope for IFAs.
The politics behind the back-bench RDR revolt
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