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Aifa right to take a long hard look in the mirror

Every now and then it is healthy to take a long hard look at yourself to check you are going about things the right way.

News that Aifa is to launch a strategic review to examine its purpose, the service and value it offers members and the scope of its membership is something that should be welcomed. 

The retail distribution review is demanding the vast majority of its membership reassess their business models. This, of course, includes qualifications and remuneration but there are a number of options open to IFAs looking to reposition their businesses.

Rarely has a profession undergone such a dramatic mandatory reform and it is only right that its main trade body keeps its eyes and ears wide open in deciding its future trajectory.

One significant issue will be whether Aifa allows restricted advisers into its membership. It would surely have been foolish for the trade body to dogmatically refuse to even consider whether to allow restricted advisers given the background of the RDR.

In his last interview before leaving Aifa, former director general Chris Cummings suggested that such a dramatic move should be put to a member vote.

Aifa says its strategic review will include a membership consultation and you would hope that any decision on restricted advice was based on the wishes of the majority of the membership. This was the case when the trade body rejected multi-tied advisers around the time of depolarisation.

Personally, I think Aifa would face many dangers in moving away from a focus on independence. I’m also pretty sceptical about the number of advisers that will move away from independence to restricted.

The straw poll currently on our website suggests that 44 per cent think Aifa should allow restricted advisers but it is impossible to get a sense of the agenda behind those voting as many consultants and people working for providers can also influence the vote. IFA research suggests the hunger for restricted is pretty low.

Restricted advisers will have to reach the same qualification requirements as IFAs. The major differentiator will be the need to offer a whole of market advice service based on a more demanding set of criteria than at present.

There will be help at hand. All the big networks and support service firms will be offering various kinds of investment support solutions to advisers which will help them meet the new whole of market requirements. I would suggest that approaching a network or support firm for help in retaining independent status would be preferable to a move to restricted advice for many advisers with significant concerns.

I chaired a round table a few months ago mainly made up of trendy business transformation consultants and consolidators and was in the minority in believing the “independent” brand will retain significant value in the eyes of consumers into the future.

It may be an old-fashioned view but I think the independent tag will continue to carry a huge amount of weight with clients and the majority of advisers will be loathed to give it up unless they really have to.

More advisers may look to provide a layered advice offering, which may encompass independent, restricted and simplified advice, but I do not see a large movement away from independent advice.

I am yet to be convinced of the drivers of a move from independent to restricted advice and Aifa risks diluting its power and influence by expanding its membership.

But it is certainly right that Aifa carefully considers all its options, including allowing restricted advisers, openly and consults fully with its membership about its future direction.

Paul McMIllan is editor of Money Marketing – follow on twitter here

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. I chaired a round table a few months ago mainly made up of trendy business transformation consultants and consolidators and was in the minority in believing the “independent” brand will retain significant value in the eyes of consumers into the future.
    In other words the vultures have begun to hover.

  2. “Mirror, mirror on the wall / Who represents the IFA best of all? To which the mirror replies: “AIFA, you are full fair, ’tis true, but Adviser Alliance is fairer than you”.

  3. what does it matter Aifa are totally useless anyway, no teeth no backbone. They have been little or no help at all in our fight against RDR.

  4. The mirror cracked a long time ago.

  5. The sooner we have a truly dedicated body to focus on all of the positives of being totally Independant in the post RDR world the better.

    IFAP have probably done more to support and promote IFAs than AIFA

    What we need now is dedicated professional representation that can unify a significant amount of like minded IFAs who want to provide RDR readyprofessional independent advice and move this profession forward positively – the time for petty squabbling has to stop.

    I belive it would be best to have a totally separate organisation to represent anyone who is either RDR resistant or wants to offer restricted advice.

    The time for petty squabbles has gone and like minded IFAs must unite to promote what we offer. Yes that will be to a smaller percentage of the population but so be it.

    Come on let’s get positive about the wonderful service we provide to our clients

  6. We have history to view! AIFA appointed David Severn who was an FSA Witch Master General and known opponent of IFAs. Shortly after Sevens appointment AIFA mooted an invitation to multi tied advisers, but this was then dropped. Stephen Gay, in his former incarnation was instrumental in the development of the AVIVA tied proposition and now we have history repeating itself. It is natural for AIFA to look to the ranks of tied advice for its new members post RDR but tactically I feel such a move is another mistake on the part of AIFA as it will be seen as a sign of rats leaving a sinking ship at a time when that ship may just float

  7. I see another positive response from Michael Fallas, why do you print this fools comments. He’s obviously not very busy as he spends all his time calling people on here!

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