Aifa: Banks will struggle more than IFAs with RDR
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Aifa director general Stephen Gay says banks will find it more difficult than IFAs to comply with the RDR.
Speaking today at the Tenet Annual Business Conference in Ascot, Gay said the news that Barclays is closing its financial planning arm, revealed this week by Money Marketing, suggests other banks may also struggle with the RDR.
He said: “I do think there is an opportunity for IFAs, by virtue of their superior customer proposition and natural business flexibility, over the banks.
“The Barclays announcement yesterday was very interesting in that regard because it shows that banks will struggle with the RDR far more than IFAs will. IFAs should consider if they are able to demonstrate value for money for customers, then there is every reason to be optimistic.”
Gay said Aifa will try to reduce the number of IFAs that leave the industry post-RDR.
He said: “Of course some IFAs are going to decide that the pressures of the RDR will cause them to shut up shop. What we want to do is ensure that as few as possible make that decision by doing everything we can to ensure they are able to reach the standards required and to be able to offer a business that is sustainable in the future.”
Money Marketing also this week revealed research from Ernst & Young which suggested it would not be financially viable for banks to offer advice post-RDR.
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Readers' comments (17)
Fraser Brydon - IFA | 27 Jan 2011 11:54 am
Odd as a week ago they were saying the banks will hoover up the loose ends from the IFAs as they segregate their business and lose the non-profitable element, now there is nowhere for these clients to go - what a mess.
I fear greatly for the youth of today, they need to start saving etc and the advice route is slowing closing, someone has to be held responsible. A disgrace and another crisis is looming.
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Anonymous | 27 Jan 2011 11:55 am
As a member of AIFA we feel let down, we see little proper support, what have they actually acheived over the last 5-years? How will they stop/reduce IFA's leaving the industry? Big statement to make but what will they do? What are AIFA's plans and strategies to do this? Hot air and nothing more. I have no feith in this outfit anymore, We need more than poncing around seminars giving speaches, we need strong hands on support at a time when this industry is seeing its biggest crisis in many years. RDR will be a disaster just like all the other ill thought out plans the regulators have designed over the years only this time it could be much more destructive and leave ,illions of UK citizens with no advice, help or financial assistance from the true professionals!
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David Parkinson | 27 Jan 2011 11:55 am
“Of course some IFAs are going to decide that the pressures of the RDR will cause them to shut up shop. What we want to do is ensure that as few as possible make that decision by doing everything we can to ensure they are able to reach the standards required and to be able to offer a business that is sustainable in the future.”
O K Mr Gay exactly what are you going to do to help the small IFA reach the required standard and what are you going to do about a sustainable future?
We have heard plenty of hot air from AIFA now where is the action?
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zorro | 27 Jan 2011 11:57 am
So why did AIFA welcome RDR because what this says is that this is the end of the road for mass market advice and certainly the end for mass market independent advice and all at the time that the FSA claims RDR is in the consumer interest! Earnst & Young say it will cost £200 per hour just to cover costs - how many consumers are going to pay that?
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Paul Nash | 27 Jan 2011 11:57 am
Well it now appears that RDR has turned out to be something of an own goal for Hector and the boys from Canary Wharf?
According to their agenda,(and we all know that they definitely had an agenda!) RDR was meant to be putting the boot into IFA's and driving them out of business?
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Zorro | 27 Jan 2011 12:00 pm
The AIFA support for RDR and their refusal to accept grandfathering beggar’s belief and again raises questions of the role of Networks who fund AIFA and who would benefit from this stance! AIFA claims to represent IFA’s but we must also note that many IFA members are members of AIFA not through choice but via block Network membership!
This has been said before but is once again topical! So how could a Network benefit from the lack of grandfathering?
If an IFA’s business has income of say £100K 50/50 initial and trail and a Network takes 15% then the Network earns £7,500 on initial and £7,500 on trail i.e. £15K per IFA member.
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hugh Jeego | 27 Jan 2011 12:18 pm
The only way forward profitably in this business now is to set up to chase claims for bad advice from the banks and other ifa`s. No FSA fees and you will be dealing with the FOS and FSCS both of who will be on your side and will agree to whatever you say in an effort to prove they are fair. The precedents are being set every day in our courts, oh and finally no qualifications needed to be updated whenever someone else decides it. You will be regulated by no body....just like the FSA, brilliant eh?
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Mr Fisher | 27 Jan 2011 12:19 pm
Mr gay is not an IFA has no idea what an IFA does and does not care about IFAs this speech says it all.
Did he take the job because he knew he was for the chop at AVIVA?
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Anonymous | 27 Jan 2011 12:33 pm
Gay said Aifa will try to reduce the number of IFAs that leave the industry post-RDR.
He said: “Of course some IFAs are going to decide that the pressures of the RDR will cause them to shut up shop. What we want to do is ensure that as few as possible make that decision by doing everything we can to ensure they are able to reach the standards required and to be able to offer a business that is sustainable in the future.”
Go on then AIFA, instead of blowing hot air, tell us exactly how you aim to accomplish this.
Supporting Grandfathering would be a start!
Words without substanceor actions are easy.
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Al lover | 27 Jan 2011 12:41 pm
Does anybody care what AIFA has to say?
I know i dont. perhaps we should put it to a vote.
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