For anyone who rides a motorbike or a scooter, February is one of those exciting times as you start to prepare for the long-distance journeys you hope to be making over the next few months.
As a vintage scooter owner who carries out most of his own spanner work, I am often in a dilemma: do I spend my money on proven – but expensive – products that will give me thousands of miles of trouble-free riding? Or do I go for the cheapest bodge, save myself hundreds of pounds, but risk my machine breaking down three months down the line?
For me, it is no contest: quality trumps price. I do not want to be stuck swearing at the side of a road in a foreign country this summer, hands covered in grease, all because I tried to save 200 quid instead of fitting a new crank to my bike in January or February.
Which is why I simply do not understand the mentality of some advisers who, when faced with the choice of paying a reasonable fee for the services of a trade association they really believe in, decide they would rather save themselves a couple of hundred quid and sign up instead for another body they do not really like that much.
Yet that is what we are being asked to believe is happening at Libertatem, Garry Heath’s representational vehicle, as it competes – presumably with Apfa – to attract more advisers to its fairly thin ranks.
According to Money Marketing last week, Libertatem has revised its fee structure so that instead of a firm with three advisers having to pay £720 a year, it will now pay £600. A firm with 10 advisers would pay £1,440 instead of £1,800 annually, a saving of £360 – or £36 per year for each adviser.
Although this was not reported in MM, elsewhere in the financial advisers’ blogosphere Heath claims to have faced difficulties in recruiting members because Libertatem’s fee structure was such that it could not compete with Apfa in this “middle market” for advisers. Cutting fees means prospective members will no longer be able to use costs as a reason for not joining Libertatem.
Last year, a few months after Libertatem’s launch, I wrote in one column that Heath was being forced into considering just such a membership price cut.
At the time, my claim never made it into print, either for lack of space – or possibly because there was no evidence to support it. Well, now it is out there.
I must say I find this suggestion of potentially divided loyalties between Afpa and Libertatem because of a few pounds’ difference in membership fees to be utterly amazing.
The two trade bodies and their members are quite honestly chalk and cheese in terms of their public faces, never mind the differences in policy and, crucially, the strategies each has in terms of trying to achieve its goals. I cannot imagine anyone choosing one over the other simply to save £40 or £50 per adviser.
No, I fear the truth is far more prosaic – and it is that Libertatem is slowly sinking into oblivion.
At its launch in May last year, Heath set some incredibly ambitious growth targets for his new trade body. He said he wanted to recruit 4,000 individual advisers and 1,200 firms – 20 per cent of the directly authorised market – in the next 15 months. Financially, the aim was to raise up to £1m in that time, roughly equal to Apfa’s annual £800,000 budget.
Nine months on, according to the same blogosphere I referred to earlier, Heath now admits he has “over” 100 members and he hopes to achieve a far more modest objective of 500 members by the end of 2016, five months after his original target date.
Readers will also recall Heath launching a separate £50,000 fundraising campaign last November, with the aim of hitting that goal by 1 February.
Well, we are now a little past that deadline: I know at the start of the year there was talk of £22,000 having been raised, with the remainder being delayed by the Christmas season. Presumably, advisers were all too busy spending money on each other to send Libertatem a cheque.
Again, it would be interesting to know whether that particular target has been reached. My personal guess, however, is Libertatem will have hit neither its immediate £50,000 total nor its overall membership goals by the end of the year, drastically revised or otherwise.
I know there will be some readers of MM asking why I am picking on Libertatem.
My reply is simple: if you are demanding accountability and the truth from regulators, the Financial Ombudsman Service, the Financial Services Compensation Scheme and other organisations that impact on advisers, you have a duty to demonstrate some of that same accountability yourself.
More importantly, it is time advisers either put their money where their mouths are or they admit to themselves that, far from this being just a question of saving a few quid, they simply do not agree with the representational approach espoused by Libertatem.
If so, far better to put Heath out of his misery now than let him limp on into the summer. Trust me, he will thank you for it one day.
Nic Cicutti can be contacted at firstname.lastname@example.org