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