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Aifa posts deficit of nearly £200K

Aifa has posted an operating deficit of £194,419 for the year to June 30, down from a surplus of £14,919 for 2009/10.

Results published on the Aifa website show that turnover at the trade body is down 12 per cent from £1,853,393 to £1,629,319.

Aifa is currently considering introducing higher fees for networks to bring their contribution more into line with the fees paid by directly authorised firms as part of an ongoing strategic review of the organisation which has already seen it extend its membership to restricted advisers.

Director general Stephen Gay (pictured) said last month the appetite among advisers to fund the trade body was “patchy”, and that Aifa would either need to increase its funding or reduce the scope of what it does.

Aifa’s results show that office costs are up 7 per cent from £281,456 to £300,119, while marketing and distribution spend has been slashed by over half from £90,318 to £38,799.

Over the year Aifa’s total reserves have fallen from minus £47,556 to minus £194,781.

Annual subscriptions have fallen by 14 per cent from £1,393,680 to £1,202,984.

Staff wages for the 15 employees have remained relatively flat at £752,988 while pension costs have fallen 27 per cent from £88,145 to £64,263.

Directors’ pay has been cut by 33 per cent from £205,000 in 2009/10 to £137,310 for 2010/11.

The cost of events and research projects has risen 14 per cent from £290,766 to £332,808.

European costs associated with membership of BIPAR, the European Federation of Insurance Intermediaries, have more than doubled from £14,552 to £30,129.

Total spending is down by less than 1 per cent at £1,824,175, compared to £1,838,859 the previous year.

Gay says: “From an economic perspective it has been a challenging year for the advice profession. Aifa is not immune to this. We have found that some members have ceased trading or intend to do so, whilst others have merged. The association reported a loss in the year to June 2011 and has been restructuring this year in order to correct this position and to ensure that it is equipped to represent the interests of our members.”


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There are 23 comments at the moment, we would love to hear your opinion too.

  1. Ancient a IFA in N3 7th November 2011 at 11:54 am

    cut jobs, not raise fees. too many chiefs, not enough indians.

  2. What is the point of AIFA apart from being a job creation scheme. What do they actually do for us IFA’s , where are they in our hour of need.
    There are 30000 plus IFA’s, we all have lots of clients, we only need ourselves and 3 or 4 clients to sign a petition and RDR would be properly debated in parliament. What about a big push for a judicial review because im sure there is a case here.Why isnt that no teeth AIFA doing anything along these lines instaed of rolling over, accepting everything, and getting into debt to top it all. ANSWERS PLEASE AIFA.

    hour of need ?

  3. Neil F Liversidge 7th November 2011 at 12:09 pm

    Whilst AIFA certainly does not have enough Indians, it does not have too many Chiefs. Most of us on the Council of AIFA give our time completely for free in addition to paying our subscriptions. The problem is that all too many advisers are happy to benefits from the fruits of our endeavours without contributing themselves, even though the subscription rates are quite small compared with the other costs that people in this business pay more or less gladly. For a two-adviser firm thre annual cost is about the same as a set of tyres for a modest saloon car; not a lot to ask really folks, so sign up and contribute, please!

  4. Quite ironic that the trade association goes broke shortly before the industry it is there to serve. Somewhere along the road we seem to have slipped into a parallel universe.

  5. You could not make it up, perhaps they needed the services of a good IFA to do some financial planning.

    We stopped giving money to this ship of fools long ago.

    As Mr Wright correctly points out, where were they in the hour of need of the IFA. Down the pub I expect working out ways to get even more money for doing nothing.

  6. I don’t think cutting staff would help – AIFA has always been run on a shoestring – there are no more than about 10 staff anyway.

  7. Poor Stephen Gay. I suspect he has probably been left to deal with the consequences of financial mismanagement carried out before he started at AIFA. If the IFA community wants a strong consistent boice then it must support AIFA.

  8. Mr. Neil Livesedge, I Really Cant Believe that instead of answering my earlier Question you actually write a comment touting for more members !! If You started fighting for us every IFA in the UK would join AIFA. So I ask again, where are your teeth? Fight for us. Why No Petition to parliament? You only need 100,000 signatures. Why not push for a judicial review. Make IFA’s want to join you. An Answer would be most welcome !!

  9. Having spent a number of years speaking to Paul Smee, Chris Cummings and Stephan Gay, I stopped my membership because they were doing nothing for the IFA, Neil Livesedge is trying, but unfortunately he has joined a sinking ship brought on by AIFA NOT listening to IFA’s who could see precisely what was happening.
    The FSA wants rid of IFA’s and are not subject to the laws of the land thanks to Labour and the FSMA, I thought the Conservatives would sort it out, but unfortunately when you have people like Mr Hoban around, the destruction of the IFA will continue, and AIFA wont have any Independent members.
    Presume they will need to become the Association of Tied none Independent and Bank Advisors. ATNIBA

  10. Parties, brewerys failure to organise come to mind

  11. The Turnover of AIFA is now less than the IFA Association’s turnover in 1998.

    It is very sad

    Well done ABI – you emasculated the only body with the guts to fight for the industry and its clients

  12. Someone must have seen this Cummings.

  13. “European costs associated with membership of BIPAR, the European Federation of Insurance Intermediaries, have more than doubled from £14,552 to £30,129.”

    A lesson there then?

  14. Oh dear, it sounds like the end of the line for the ‘free lunch’ brigade?

    I’m sure that City UK may be able to help?

  15. test – do not post live

  16. What a load of clever critics. No doubt many of you provide valuable and voluble advice from the touchlines on a Saturday.

    I haven’t noticed any of these pundits actually getting off their backsides and doing something. If you really want to change things then you need to get involved from the inside. Shouting from the touchline often just irritates the team that’s trying to score and actually achieves little else.

    If you don’t like the organisation you really have only two choices – ignore it completely (a compelling proposition when it comes to our Governments) or get involved and try to better things.

    Those of us (and there are many) who have been around for more than 5 minutes well remember all the criticism – IFAs were too fragmented, we needed a single voice. So now it seems we have decided to go backwards.

    Fatuous comments regarding Europe seem to overlook that £30k is a flea bite if you really want to get a handle on the European dimension. Sure this may (as a result of current traumas) turn out to be not as significant in the future, but as of now it is not to be ignored.

    Anyway for those of us who don’t get our botties wiped by a Network there is more to a Trade Association than whinging about what we don’t like. (And I agree with you all that there’s an awful lot not to like). I value AIFA for keeping me in touch with the regulations and rules and all the other bureaucratic hoop- la in an understandable way that doesn’t take up half a telephone directory. Who else does that today? Who was the first to bring you a level four classification without the need to sit at an examination desk? I heard the moans of the oldies – “I’m too old and decrepit to sit an exam” – so AIFA gave you the case study route. Still not good enough.

    I don’t think that many can moan better than I can, but I hope that I am able to see a benefit when it stares me in the face.

    Seeing these figures – do you think any of the Mickey Mouse wannabes are going to even get near this level of funding. Even then it isn’t nearly enough if you want to run a really effective trade body that will do more than just whinge at the Regulator – always assuming that the regulator will listen! Petitions to Parliament will hardly do any good when the current and the proposed Regulators are free to follow their own paths – and Government – this one or any other – are not minded to change that particular aspect.

  17. I think Mr Wright should first confirm he is with a fully paid up subscribing member firm before he is afforded the dignity of a reply to his ‘what has AIFA done for us’ rhetoric.

  18. Incompetent Regulators Award Team 7th November 2011 at 10:40 pm

    Gay will be OK. These types of political animals always seem to come up smelling of roses despite being in the sh*t. Just like the F-Pack staff, all looking after themselves 1st.

    I feel sorry for Neil Liversidge as he is a proper IFA but misguided that AIFA might actually do a major something. Pigs might fly. AIFA have always been far too complicit with the regulators. They have just been a punchbag for the F-Pack for years. I agree with Rod Leonard wholeheartedly.

  19. IFA’s understandably want to defend the hill on ‘independence’ but to create an effective association that represents their views takes commitment, both politically and financially. Other professional associations have charges way in excess of the current going rate charged by AIFA of £365. The fact is most of AIFA’s income comes from Networks who are are charged a tiny fraction of that. The result is that currently AIFA depends on the financial support of Life Offices because it doesn’t have enough IFAs (or otherwise) who are prepared to put their money where their mouth is and get behind it. The first question IFA’s should be asking themselves is do they want an effective trade body. The second is how it should be funded.

  20. Ancient a IFA in N3 8th November 2011 at 9:51 am

    @ Mr Liversidge

    What exactly have you done for the IFA’s? You are a totally needless set up and are profiteering from our hard earned cash. Who on earth will be paying you after RDR?

    I bet most of you do just a 9-5, why not disclose your salaries to the IFA community? I bet they are too handsome for that.

  21. Aifa’s results show that office costs are up 7 per cent from £281,456 to £300,119:
    – that’s £20,000 per employee
    – just read that again….£300,000 office costs. Move to Hounslow, save £1/4m subscriber money. Or Cardiff.

    while marketing and distribution spend has been slashed by over half from £90,318 to £38,799.
    :- increased fixed overhead, cut variable overhead budget for new business. This isn’t a strategy its a reaction.

    Staff wages for the 15 employees have remained relatively flat at £752,988 while pension costs have fallen 27 per cent from £88,145 to £64,263:
    – £50,000 average salary, with 8.5% pension cost. No comment.

    Companies only get into trouble if the directors pay out more than the company can afford.

  22. As one of the “Mickey Mouse Wannabe’s”, (I assume Harry was having a poke at Adviser Alliance – again) I believe that a degree of perspective is required.

    AIFA was set up some ten years back and a media friendly face installed instead of the argumentative Garry Heath. Successive DG’s have used the AIFA position to clamber up the rungs of the greasy corporate ladder and their support of advisers has to be in doubt.

    The RDR represents the greatest threat to advisers since the arrival of Mark Weinberg and similarly represents ongoing detriment to consumers. Therefore it was anticipated that AIFA would fight the RDR tooth and nail. That they didn’t is fact and despite the efforts of Adviser Alliance and numerous individuals (including Neil Liversidge) we can see that the unaccountable FSA is intent on defying the TSC, the bulk of the industry and commercial logic by pushing ahead with their experiment.

    Because of this failure to display teeth, and no doubt also due to dwindling IFA numbers, AIFA is finding its commercial future in jeopardy and therein lies the lesson. If you bite the hand that feeds then very soon the diet turns to thin gruel and then nothing.

  23. Perhaps AIFA, in addition to the issue of office costs, need to be asking whether or not the position of DG warrants a salary of £180,000 p.a.

    Neil L would almost certainly do it for half that amount.

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