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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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Comments

There are 17 comments at the moment, we would love to hear your opinion too.

  1. Fraser Brydon - IFA 27th January 2011 at 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.

  2. 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!

  3. “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?

  4. 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?

  5. 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?

  6. 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.

  7. 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?

  8. 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?

  9. 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.

  10. Does anybody care what AIFA has to say?
    I know i dont. perhaps we should put it to a vote.

  11. Mr Gay clearly has no idea of the financial power and ‘out the box’ thinking that Banks posess.

    If there were limited or no opportunities for Banks post RDR then why are the majorioty of them funding complete costs of RDR? Answer: Because they know there will be opportunites post RDR.

    Also look at the way over recent years Banks have shed their IFA workforces and kept Multi Tied, there is a reason – a MT proposition can offer flexibility and simplicity where IFA’s sometime cannot.

  12. Andy Gray (no, not that one) 27th January 2011 at 1:16 pm

    I really don’t think Aifa has the intellectual clout necessary to do the job and have undoubtedly rendered themselves unfit for purpose. This is not a reflection on Mr Gay as I believe he has been handed a complete mess by his predecessor who abandoned ship for reasons best known to himself (and perhaps certain members of the Aifa Council).

  13. Yes!!! Come on Aifa – tell us exactly what you’re going to actually do to stop IFAs leaving the industry post RDR.

    Come on – let’s have a message here from every IFA calling for the same – perhaps the number of requests can reach a record number and then Money Marketing can put the question to them and then Aifa can once and for all show what a useless bunch they are when they don’t come up with anything.
    Personally, I’m sick of them grabbing headlines by stating the obvious and repeating last weeks news. They just jump on whatever bandwagon is running that week.
    They supported RDR and so for advisers that are struggling to pass the exams, they’re the last people you’re going to be going for help to.
    Does anyone know how these organisations are actually funded? Who’s paying their wages so that they can spend their time grabbing headlines?

  14. Another wise after the event statement, what on earth are these rubbish people doing representing any of us in the industry?

    So Mr smart **** Gay, how will this impact us on cost if all of them leave?

    What does the expert from AIFA estimate our new costs per adviser would be including the RDR, CFEB, exiting 30% of IFAs and the banks?

    There are advisers, advisers who are proprietors, then there are the rest and very few of them with a small number of exceptions know absolutely nothing about advice distribution.

    I wish they all would just get out of our space.

  15. Aifa – waste of space!!!

  16. Barclays understand that there are not enough people who will be willing to pay for advice ,only HNW clients which are scarce so they have left the building.

    My problem is that there are not a lot of HNW clients about in my rural area, and with costs increasing I might as well pack it in as well.

  17. RE Jack

    I dont think there are enough HNW clients to support the industry, HNW in the looser sense not all millionaires

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