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A body of work

How long have we been discussing a single body for advisers? Yet some people seem to be unaware of this and the fact that the Personal Finance Society is that body.

I know I did a presentation on this subject at PIMS in 1988 on behalf of the LIA. I had been working as a regulator only a few months before and experience of the somewhat ramshackle system set up under the FSA 1986 had convinced me the industry had to get its own act together if it was not to be subject to much heavier regulation.

There seemed to be few supporters. There were plenty who wanted to appear to be a professional body, but few who wanted to go through the pain of creating it.

The breakthrough happened shortly after the formation of the PIA when I was asked to prepare a paper for the PIA board to consider on the subject. After that, the now largely forgotten ProfCo Group did its work. Unfortunately, infighting stopped that initiative.

The issue came to the forefront when we were forced to define the distinction between professional body and trade association by the formation of Aifa.

Logical argument leads to the conclu-sion that a profess-ional body is the essential step for advisers. The alternative is prescrip-tive regulation. Initiatives such as Treating Customers Fairly, principles- based regulation, etc, are an oppor-tunity to take ownership of out reputation and standards. The reduction in prescription by the FSA creates an opportunity to raise standards and be seen as custodians of professionalism. The failure to take up this challenge leads back into prescriptive regulation and less initiative for the sector.

Creating a professional body framework is a specialist activity. It requires expertise of a number of kinds. The members contract with that organisation, offering loyalty in return for a promise of leadership to a much more favour-able public perception.

This is not to say the members have no input. In fact, in the case of the PFS, I feel strongly that the biggest sign of hope is in the standards and professionalism of some members who typify the goal which we want to achieve. But to raise the general stan-dard, it is some-times necessary to say no. Some of the short-term reac-tions which I have had presented to me are just not consis-tent with the role of professional body.

The whole point of creating a profess-ional body is to improve percep-tions and improve members’ success. The process will be boosted in the autumn when the PFS develops the consumer agenda and links consumer perceptions with being fit for purpose in terms of knowledge and ethics. Let us hope that advisers are prepared to pay the price – and reap the benefits.

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