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Aifa opens its doors to restricted advisers


Aifa is opening its membership to restricted advisers and will rebrand to reflect this change as part of a radical restructure.

Following a strategic review, which began in December when director general Stephen Gay joined Aifa, advisers offering a limited product range will be allowed to join the trade body which has previously only accepted independent whole-of-market advisers. Membership will not be open to single-tied advisers.

Gay says: “We are utterly convinced the way forward has got to be to represent some restricted advisers and to set our membership limits more widely than they currently are. It is right morally, it is right politically and it is right economically.

“I do not think it would be right to expel people from our organisation simply because the regulator has changed the goalposts about what it considers independence to be.”

Aifa will adopt a college structure made up of three subsidiaries – one for IFAs, one for restricted advisers and one for mortgage brokers, under the Association of Mortgage Intermediaries brand.

The three colleges will be responsible for policymaking while the Aifa board, currently known as the Aifa council, will be responsible for governance and running the trade body.

Membership will be opened to restricted advisers over the next 18 months. A decision on rebranding the trade body and any impact on member costs will be agreed by the end of the year. At this year’s PIMS conference, Gay warned of a substantial funding gap within Aifa.

Aifa was set up in 1999 as “the voice of the IFA profession”. When depolarisation was introduced in June 2005, Aifa members voted not to allow multi-tied advisers to join. No vote was held in this instance, although Aifa says the decision follows extensive research with members and non-members.

Yellowtail Financial Planning managing director Dennis Hall says: “Many current IFAs are probably going to operate on a multi-tied basis in the new world. The industry needs a voice that is loud is enough, and if membership is restricted only to independent advisers then it is just not going to have any clout.”

But Syndaxi Chartered Financial Planners managing director Robert Reid says: “Aifa already has a problem in managing its diverse membership. To add to its membership smacks of lunacy.”

Do you agree with Aifa’s resticted move? Vote here as part of our online poll.


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There are 22 comments at the moment, we would love to hear your opinion too.

  1. I guess you have got to follow the money if you live off other peoples profits, you will not continue to benefit from mine.

  2. Getting desperate for income are you Mr Gay?

    Can I remind you what the AIFA name stands for. Perhaps if you hadn’t sold the IFAs down the line you wouldn’t be in this mess!

  3. I absolutely disagree with this. Independence is under threat here and having heard Gay talk in an open debate with IFA’s on the subject of which was more important, independence or professionalism I could see this coming.

    It is not a debate about which one is best – some of still believe in both.I would like a trade body that represents me and my views and fear that this will completely distort what our ‘independent profession’ is all about.

  4. Hello – can everybody see AIFA for what it always has been yet ???

    Absolutely pathetic !!!

    AIFA has been dead as far as IFAs are concerned for years this merely underscores that fact. As a result they are skint !!!!

    Those IFAs who continually hung their hats on AIFA in the hope that there might be a bit if fight in AIFA to stand up for the IFAs interests – how naive is that !!!

  5. Adviser Alliance is the only body that represents IFAs and the only body that focuses on the issues that threaten the very fabric of our industry.

    We also want new members as this enables us to carry out the functions that AIFA refuses to consider. Talking can only go so far (as the RDR debacle proves) sometimes you have to get in the ring and exchange blows.

  6. Have they decided on a new name yet? I suggest Association of Independent Financial Advisers, Restricted Financial Advisers, Bank Advisers, Boiler Room Scam Artists, Holistic Lifestyle Coaches And Anyone Else Who Might Conceivably Pay Us A Membership Fee, Please God We Need The Money.

    Changing letterheads etc is expensive, so it would pay to think ahead and not have to do it again six months down the line.

  7. Incompetent Regulators Award Team 27th July 2011 at 9:33 am

    2 points here

    1 AIFA needs to change its name to AFA
    2 What did they ever do for IFAs? Nothing. What will they do for FA? Nothing

    More beaurocrats trying to save their jobs at the expense of those who actually do the job/work.

  8. We stopped giving money to this ship of fools years ago.

  9. AIFA is like a dog in misery and needs to be put down quickly before it can misrepresent independent advisers further.

    Remember when AIFA appointed a former FSA regulator and known opponent of independence, David (FSA) Seven. One of the first things he did was try and introduce tied advisers. Now AIFA has no choice especially as it no longer represents independent advisers and many that are not obliged to be members by block Network funding have seen the light and saved their hard earned dosh. AIFA has a cash flow crisis of its own making and the sooner it changes it name and removes “independent” the better.

    Will Aifa have a members vote on this?

  10. This topic has been discussed within AIFA at different times over the years and previously the AIFA Council did not approve of diluting the Independent element of its membership (hence AMI) but times have changed and many current IFAs will be restricted advisers in the future and therefore this change whilst it may not be desirable in some quarters is needed.
    Some IFAs are like Newcastle supporters believing they have a god given right to win everything in sight and not understanding why they do not. AIFA is a small organisation, under resourced, underfunded, with an enormous workload competing with trade bodies funded by the Insurance Industry and the Banks and battling the FSA who have budget of half a billion pounds.

    AIFA is not perfect but then few if any organisations are and one of its failings is not to blow its own trumpet about the wins it obtains for its members but is seems the same afflication applies to the Adviser Alliance. I would like to know of any concrete benefit achieved for IFAs by the Adviser Alliance. So if Alan Lakey will respond I will be interested in the answer and I would add that this is a serious question and is not meant as a criticism of Adviser Alliance but should be seen as an enquiry as to their worth.

  11. All these vitriolic cries of opposition appear to overlook the fact that “the regulator has changed the goalposts about what it considers independence to be”. Independence in the post RDR world is going to impose a set of criteria that will be all but impossible to meet in the real world.

    Consider a pair of hypothetical clients called Mr & Mrs Jones who run their own small business and who approach a fully fledged NM IFA for comprehensive advice on a retirement savings strategy, including but by no means limited to pensions. For a start, just the pensions part of the equation will have to include PP’s, SSAs’s and SIPP’s, not to mention all the underlying investment options available via the latter two. Then we have all the options available at retirement that a full IFA will be expected to explore, explain, compare and discuss.

    Also, Mr & Mrs Jones are fairly well aware of all the negative sentiment towards pensions, not least the annuity trap, GAD Annuity Rates, and they manage to divide their income so as to avoid higher rate income tax, so they want advice as well on other long term investment vehicles, including property, directly held stocks & shares, collectives (OEIC’s and Investment Trusts), VCT’s, EIS’s, UCI Schemes, structured products, onshore and offshore packaged products (because they may just retire overseas), etc. And so the list gets extremely long and the report to cover them all will be so voluminous that the bill for its preparation can’t possibly be less than £5,000. Nor could it possibly be prepared by just one person because no one person could have the required level of knowledge in all those areas.

    So just what is the FSA trying to achieve by decreeing that anyone who cannot provide a report such as would be necessary to meet the demands of our fictional Mr & Mrs Jones will no longer be allowed to call themselves independent but must instead call themselves restricted, with all the negative connotations that entails? Bonkers and, of course, completely divorced from the real world.

    As for AIFA’s achievements, there do actually appear to be two. Firstly, it did manage to persuade the FSA to reduce the share of its total levy bill apportioned to the IFA sector (even though the FSA has since devised other mechanisms with which to bleed us nearly dry, such as all these extra FOS levies). Secondly, AIFA has managed to secure from the FSA approval for a route to QCF Level 4 which is cost-effective, relevant and (I hope) manageable for all us old codgers who couldn’t cope with a CII-style programme of exams. There may be something else as well, though just now I’m unable to call it to mind.

    So AIFA isn’t a total waste of space and we have to bear in mind that it’s up against a heavily armed and armour-plated leviathan that’s so unaccountable that it doesn’t even have to take much if any notice of the TSC (though that may change now that Andrew Tyrie’s on the case, because he doesn’t seem to be the sort of guy who’s going to give up and skulk away with his tail between his legs).

    So, all things considered, we ought perhaps to give AIFA at least some credit for doing its level best in the face of an almost untouchable opponent.

  12. All mouth and no trousers 27th July 2011 at 10:56 am

    Some of the comments left are unbelievable – what on earth is Alan Lakey saying with the below comment?
    “Talking can only go so far (as the RDR debacle proves) sometimes you have to get in the ring and exchange blows.”
    Unless the Adviser Alliance is actually a militant protest group this sounds to me like hot air and little else. If AIFA is having to expand out its membership base to fund its activities, which increasingly demand that it deals directly with Europe, then that’s a commercial reality its membership will have to deal with. The alternative is that membership fees go up – I doubt many of the tight wads that write on this site would be up for that. This industry has relentlessly milked the commission payments of consumers over the last couple of decades and many have got rich as a result. But when it comes to paying for something that might improve their industry or support the cause of advisers the whole industry seems to have collectively left its wallet at home. If the industry wont pay up then I would suggest it shuts up.

  13. Neil F Liversidge 27th July 2011 at 10:57 am

    Get real. Many of you who are fulminating about this, and who rightly think yourselves independent, will very likely find that the FSA defines you as ‘restricted’. This is NOT about opening the door to one-club golfers like SJP and Towry Law who only push their own products and funds. It IS about defending the interests of the current IFA community who will otherwise suffer from the wedge the FSA is trying to drive between us with its illogical, irrational and downright spiteful stance. The most dispiriting thing is that so many of you cannot see through what the FSA is about and would rather spend your time blogging against AIFA rather than putting your shoulders to the wheel against the common enemy in Canary Wharfe. It’s the Life of Brian all over again – Judaean People’s Front v Popular Front of Judaea. Quit the timewasting, moaning and infighting if you really want to make a positive difference. What’s with all the ‘anonymous’ posters anyway? What are you frightened of? Any wimp and chicken can snipe from the bushes. We are up-fronting the FSA – what are you doing?

  14. Hi Bill.

    What has Adviser Alliance achieved?

    Unlike AIFA we were one of the instigators of the TSC’s investigation into the RDR. We unearthed statistical confirmation that the RDR proposals were built on a tissue of dubious data and exaggerated nonsenses.

    We directly involved ouselves in meetings with MPs and others influencers.

    We are currently involved in a major challenge that AIFA shied away from.

    I could add others but they are currently in gestation.

    We are not fighting AIFA but we are saying to those disaffected IFAs that a viable alternative exists and that bnot all representative bodies are all mouth and trousers

  15. A predictable and welcome move. What most IFAs haven’t worked out yet is that if you keep operating in the same way, you will be restricted under the new rules and AIFAs stance is therefore sensible.
    Be good if all commentators posted whether a member of AIFA or not to give validity or otherwise to their comments. Easy to be a spectator and criticise the players on the pitch..

  16. I have a suggestion, the Money Advice Service should join AIFA. It has very deep pockets thanks to the FSA which sends the bill to IFAs, it isn’t regulated and offers no redress when its ‘advice’ causes consumer dertriment. One day it may be the only option available to the mass market…sooner than you think perhaps?

  17. I was a founder member of AIFA and all its previous incarnations left in 2002. Yes the writing was on the wall as early as that !!!

    Those in defence of AIFA are missing the point again – regardless of whether they admit restricted advisers or not they simply do not/will not represent the feelings of those that they are charged with representing and have not done so for years.

    Many in their defence are walking into the same trap in thinking they can hang their hat on AIFA to fight for them THEY CANT.

  18. Neil F Liversidge | 27 Jul 2011 10:57 am

    We are fighting the FSA, what we are saying is AIFA is no help. Can’t you see that? The FSA actually use AIFA against us!

  19. To answer Simons question on Will Aifa have a members vote on this?

    The answer is probably yes, the last two remaining IFAs will both be allowed to vote.

  20. I am in no way attempting to be cynical here, but won’t independence rely on software that pumps out reams of irrelevant burble that says the following six thousand forms of alternative product were discussed etc. I recall suitability reports following RU64 became 22 page tedium studies that nobody read. Evidence of research is already often just software supported nonsense. I guess that more and more people will just use the title financial planner or consultant if we are pushed down the restricted route. It is all a Kafkaesque nightmare if you ask me. I have discussed RDR and implications with several clients and they had to be revived with smelling salts after the first five minutes. It is all so totally dull.

  21. @ Bill Taylor: AIFA can never compete with the ABI etc if it continues to play the establishment game.

    The point is it shouldnt try. If you would fight using the media and parliament you would have the financial support from the IFA sector as I had.

    I had half the staff of AIFA and packed 3 times the punch

    Europe isnt new either It cost IFAA £100k in 1999

  22. Like all drowning rats they cling to anything for a bit more life. I have no sympathy for AIFA. They should have fought the RDR attack on the IFA and their livelyhoods, but they didnt and snuggled up to a disgraced regulator who cant admit they have got it miserably wrong and in doing so will throw many inc me into an early and unneccessary retirement. But hey whad I do I know!, the country loses my NI contributions, the regulators lose my fees, Aifa loses my subscriptions, the banks gain my clients and I will watch another uk industry be decimated by ignorant people who wont be around in 5 years time to answer for the carnage they create. Lets see where Sants and Gay are in 2016. My guess will be nowhere in financial services.

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