IFAs could become ‘collateral damage’ in European power shift
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Source: Michael Walter/Troika
Aifa has warned IFAs could become “collateral damage” as regulatory decision-making shifts to Europe where independence is defined differently than it is in the UK.
Speaking onboard the Aurora at the PIMS conference last week, Aifa director general Stephen Gay (pictured) noted that some advisers have questioned why the RDR is still going ahead despite potential conflicts with European regulatory developments, such as Mifid and the Packaged Retail Investment Products initiative.
But he said Europe is broadly moving to the same standards prescribed for the UK.
Gay said: “In any case, it is pretty much academic because the RDR is going to happen. But we could find independence is defined in different terms in the future than the way it is in the UK.”
He went on to explain that European authorities define independent advisers as those not tied to a particular provider or providers, rather than independent advisers covering the whole of the market.
Gay added: “While it is difficult for us to argue against the greater goal of European harmonisation, and it is pretty much pointless to do so in any case, we do need to work to ensure that our IFA community in the UK does not become collateral damage in the pursuit of this vision. We also need to focus on what might the opportunities be for us to exploit the quality of our experience and the advantage we have here in the UK over our European rivals.”
He also said that as part of the ongoing strategic review of Aifa, one consideration will be the level of funding needed to lobby Europe effectively.
Gay will be presenting at an Aifa board meeting this week to outline the level of additional funding he thinks is required to influence both domestic and European regulators.
Aifa has been holding monthly board meetings to discuss the progress of the strategic review since it was announced in December.
One delegate at PIMS asked how much money Gay thought was required.
Gay said: “I cannot answer that question for you until I take it to my board. The reality is there is a funding gap, and it is a substantial one. I can see how it can be bridged, based on the tariffs we can charge our members and based on the projections of numbers of members. But I cannot tell you what the numbers are until I have taken them to the board.”
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Readers' comments (8)
Nick | 23 May 2011 9:16 am
Pay fees for Aifa to represent us? No thank you!
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Steve Laird | 23 May 2011 9:19 am
IMHO AIFA should leave that job to the FECIF. I can't imagine AIFA members being very keen to stump up the extra.
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IFA Defence Union | 23 May 2011 10:00 am
We joined the FECIF way back, we expected some lobbying but the situation for firms in the EU varies between states and none are similar to the UK, even is we could have afforded the fees it wasn't worth maintaining membership for a couple of hundred small to medium sized firms.
You have to decide whether you want to fund effective lobbying from your own perspective or just walk away and let them get on with it, small firms will obtain nothing of worth from the likes of AIFA, history tells us this is so.
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Mike | 23 May 2011 11:14 am
Its a bit late now trying to find a voice. Where was AIFA when the RDR was being forged? Where was their voice then? Why would members pay for an inept organisation to 'NOT represent them?', in fact, why would members be members?
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Chris Miller | 23 May 2011 3:38 pm
'RDR in Europe is going to happen'. Well I never Mr Gay, how amazingly perspicacious of you.
Well they say the planet earth is going to be fried in +- a billion years by the sun. That too is right.
To get European financial ADVISERS THROUGH THE HELL HOLE THAT IS RDR ISN'T GOING TO HAPPEN ANY TIME SOON. Technically it might happen, but not in the working lifetime of a 50 something yearold.
Go on Mr Gay, keep talking about it; I'm sure it makes you feel good, trotting out the same old garbage.
Passporting is a very real alternative. All Gay and his cohorts are trying to do is try and head off a mass exodus to Dublin, and there is nothing he or his here today, gone tomorrow cronies can do about it. I suspect Msr Gay has a hot line to the FSA. Probably wants a job with them when he drifts from this highly paid job to his next.
The AIFA has about as much relevance to me as the contents of a manual on the Swiss hadron collider
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annonymous | 24 May 2011 8:08 am
AIFA have failed IFA's and many IFAs have voted with their feet. Now they clearly have a dwindling susbscription base and now realise that IFAs do not see value for money in this organisation and are therefore reverting to scare tactics to boost the coffers. Effectively trying to frighten us into thinking that if AIFA dont protect us we are all doomed.
I would have supported AIFA if they were representantive of IFAs over RDR but I'm afraid its too little too late for me. Bring on an alternative body who will proactively support us and I will support that.
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Julian Stevens | 24 May 2011 9:29 am
Given that "European authorities define independent advisers as those not tied to a particular provider or providers, rather than independent advisers covering the whole of the market" one has to ask just why the FSA is hell-bent on formulating a different definition that the vast majority of advisory firms will find impossible to meet. Once again, it seems to be a case of trying to fix something which manifestly isn't broken.
As for AIFA's funding problems, these probably aren't helped by its apparently ever-diminishing membership. If higher levies are asked of less and less members, those remaining will take an increasingly critical look at just what they're getting for their money. This in turn may lead to an increasingly steep and rapid downward spiral and Mr Gay may find himself captain of a ship that's coming apart at the seams beneath his feet.
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Mark | 1 Jun 2011 4:18 pm
Can't understand why any adviser (whether pro' RDR or not) is still an active paying member of AIFA! They have consistantly shown a total lack of empathy for their members and one would guess are now trying to stem the tide by issuing these consistant scare tactics.
King Canute comes to mind!
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