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Aifa strategic review must come up with the goods

Many years ago, as a schoolboy barely out of short trousers, I went to see a band called Status Quo at the Bournemouth Pavilion. I know it’s not a cool thing to admit to nowadays but they were pretty good.

During a very brief phase before the excesses of punk, reggae, ska and eventually Northern Soul claimed me forever, I even learned how to play the simple but catchy opening chords to Caroline on a mate’s guitar.

As a result, I have always had a soft spot for Status Quo. There is a delicious irony in the notion of a band that has made the Latin term its own forever repeating variants of the three-chord riff that so excited me as a teenager.

My problem is that, amusing though the phrase “status quo” is in the context of post-modern musical irony, it sits less well when discussing the financial services industry. So when I hear that Aifa is conducting yet another “root and branch” review of the way it is structured, my heart sinks.

In an interview given to Money Marketing editor Paul McMillan the other week, Aifa chairman Lord Deben and new director general Stephen Gay were at pains to emphasise that Aifa’s three month strategic review meant “retaining the status quo is not an option”.

According to Lord Deben: “What we wanted was a proper review involving a great deal of individual and group consultation and seeing the best ways in which we can provide a better service to members, what is that going to cost and how we can best interact within the new structures.”

Ah, yes, a review that involves lots of “individual and group consultation” but in which the status quo is not an option – when have I heard those phrases before?

How about 2005, when Aifa consulted its members over whether to admit multi-ties and “whole-of-market commission-paid” advisers (as they were once called) into its membership. That option was turned down back then.

Or what about January 2007, when we were told Aifa’s retail distribution review working group would not be trying to come up with “yesterday’s answers to yesterday’s questions” and genuinely wanted “new thinking” on this issue.

Meanwhile, the then Aifa director general Chris Cummings was busy telling anyone who would listen “there has never been a time when we have listened more to members”, presumably with the exception of this present three-month review, when the “listening” will be even more acute.

A few weeks later, Chris was busy telling readers of Money Marketing all the usual stuff about “fresh thinking, honest assessment and radical debate” while also stressing “this is no time to trot out glib statements”.

Then there was July 2007, when Aifa unveiled its “biggest-ever” survey of advisers to help it inform its RDR response. We were told the survey would involve consumer research, as well as “data about the contribution the advice community makes to the economy”.

Among the topics to be covered were commission and customer-agreed remuneration, adviser segmentation, profess- ional status, indepen- dence and primary advice.

What was the outcome of all these incredibly detailed consultations with members, root and branch reviews, radical debates, fresh thoughts and listening to members?

Well, two years later, Chris Cummings called for a review of the Financial Ombudsman Service, which he wanted to become “a smaller, cheaper operation, sharing resources with other parts of the regulatory structure”.

Among the changes demanded by Aifa to the way the FOS operated back then were the introduction of a long stop for IFAs, a “no loss, no fee” system so IFAs are not charged if they are cleared of any wrongdoing by the FSA, claim management firms to be included in the annual levy and “for the FOS to be subject to the rule of law and bound by legal precedent”.

Strangely enough, these demands were almost identical to ones raised by the IFA Defence Union in February 2007.

Last year, we had Advice Horizons, which implied that while independent financial advice was “the gold standard” for IFAs to aspire to but restricted advice did not lower standards in terms of professionalism and quality of service.

It was hard then – and even harder today, in the light of the comments from Lord Deben and Stephen Gay – to ignore this as part of a softening-up of Aifa members, preparing them for the likelihood that this so-called “root and branch” review will recommend allowing “restricted advisers” into their ranks.

That, ultimately, is a matter for Aifa. My problem lies not with this tactical concession, generated as much by the demands of the trade body’s principal financial sponsors as it is by a desire to help those who abandon genuine independence.

The worry is that unless this review really does come up with the goods, it will generate yet more cynicism among both Aifa members and those whose main form of enjoyment lies in baiting the trade body for its inactivity.

There are radical answers to the problems IFAs are likely to face in the years ahead. Somehow, I’m not sure Aifa will find them. As with Status Quo, I expect the same three-chord riff in a few months time.

Nic Cicutti can be contacted at


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There are 21 comments at the moment, we would love to hear your opinion too.

  1. IFA Defence Union 27th April 2011 at 2:39 pm

    Yes, it is the same old song.

  2. AIFA are the authors of their own destiny.

  3. They must be hoping they don’t go down, down, down the dustpipe. Maybe they’ll roll over lay down rather than walk the wild side of life as us IFAs are having to do.

    Ultimately they prove to be matchstick men.

  4. If current IFAs adopt the Status Quo in terms of the way they currently assess their whole of market proposition, remember that post RDR many (most?) will be classed as restricted.

  5. Ever looked at the AIFA logo? Five lily pads and four letters! The blank second lily pad was for M for Multi tied. Now “R” for restricted. Twas in the original plan to ensure the providers had control of the advisers voice.

  6. The review will recommend allowing “restricted advisers” into their ranks because they need the cash to keep going. AIFA have not represented their members. They have been ineffective. Chris Cummings thought he could debate and persuade the regulators but that debate was with a deaf man and they did not hear, come to that neither did the IFA community! When AIFA was bypassed by the grass root IFA lobbying of their MP’s Cummings actually stood in its way saying that crude IFA lobbying would not work – well it got IFA’s onto the floor of the HoP and the TSC which is more that AIFA did and without membership fees!

  7. AIFA have been bankrupt of ideas and solutions for years. Paying them to represent our interests is like paying a Policeman to lock you up.

  8. Much as I abore terrorism, would Gerry Adams & Martin McGuiness have been where they are now were it not for the PIRA?

    Being reasonable and negotiating is important, but it does take both sides to be willing to come to the table. The FSA is NOT. Hence why we need to be vocal when we believe the F-pack is out of line and be willing to stand up and be counted (including being the victim of an arrow vist, simply for commenting, not that I have been yet, but I’m sure they’ll get fed up with the harping on)

    Chris Cummings was a good man, but then so was Neville Chamberlain…., his goodness didn’t help the Czechs, Polish and so on did it?

  9. Green Eyed Monster 27th April 2011 at 4:12 pm

    “Twas in the original plan to ensure the providers had control of the advisers voice.”

    Please tell us more Garry.

  10. Question.
    As a matter of interest what proportion of IFAs are or were fee paying members of AIFA, or any organisation for that matter? I may be wrong but it strikes me that most are not members of anything.

  11. IFA Defence Union 27th April 2011 at 4:55 pm

    Scotty Jock, you are on the button, they like to play but not pay.

  12. I was an IFA but now multi-tied. I do however give my voice to the support of IFA’s and have written to my MP to support you. I have received assurances that he does and he sent me my own copy of the TSC meetings. However… I’m not sure AIFA gives you support! Gary Heath recently suggested action and I remember him from past times. Larger than life and a champion of IFA’s. Time to get him on board. Ps I think we are all going to be shafted, IFA or RESTRICTED and think the larger the voice the more we will be heard. AIFA speak in whispers, get someone like Gary to lead and get results!

  13. they could rename themselves ARIFA

  14. We have one thing in common Nick!! We both saw Status Quo live in our youth and thought they were pretty good even if the same old chords were being twanged out all night. Until I saw them on the stage I was wondering who those ‘hippies’ playing pool in the pub were. They had very long hair which covered the table and went in their beer.

    Sad as I am I still have their round scratchy vinyl things.

    Now – Just Supposin’ IFAs were capable of acting as one… you could get Whatever You Want, nah, they are just a bunch of Spare Parts.

  15. What baffles me is the way Aifa’s Council seems to have been content with such indifferent performance from the Executive at Aifa. Do they never challenge the Director General? Shouldn’t there be someone directing policy on a day to day basis? I also heard that staff turnover was a real issue in Cummings’ day; it seems that years of hollow boasts and apparent incompetence have now reached some sort of critical mass – Stephen Gay must wonder what’s hit him. No sane person would take on the job of being Aifa’s DG had they known the parlous state it has got itself into.

    If I was a vet and Aifa was an animal, I would be telling its owners that it had suffered enough and it really is time to put it out of its misery.

  16. Whilst I am amongst those who consider AIFA’s efforts to date to have been ineffectual, it is perhaps unfair to prejudge the outcome of its latest strategic review before AIFA has actually published the conclusions of that review.

    The one thing we do know is that AIFA’s efforts thus far lobbying and trying to negotiate with the heavily armed and armour-plated leviathan that resides at Canary Wharf (largely) haven’t worked. What are needed now are a battle plan, nothing less, and for AIFA to admit that the FSA is an immoveable monolithic quango, accountable to no one. If the FSA takes no notice of the TSC, then it’s even less likely to take any notice of any representations made by AIFA. So AIFA’s strategy must take a new and different direction. That means giving up on trying to win any concessions from the FSA and instead lobbying Parliament for the creation of an Independent Regulatory Oversight Committee and for enforcement of the Law enshrined in the Statutory Code of Practice for Regulators.

    If AIFA’s new battle plan includes these objectives, this may be a sign that finally it’s faced up to the realities of the present situation and that it means business. If not, then the voices of disaffection are likely only to grow louder.

    P.S. I went to see Status Quo at Southampton in 1975 and they were too darned loud.

  17. Nicholas Cicutti anagrammatised becomes Caustic Loin Itch ~ apposite, some might say.

  18. @ JUlian Stevens: I like Caustic Loin Itch but prefer my old spellcheck, which had me down as Nice Cacti….

  19. Is nice cacti a sanitised version of pleasant prick?

  20. Have many reviews do they need to carry out, before it dawns on them, that they are complete failures!

    After 2012, the large Networks will no longer be around to bankroll AIFA…

  21. Did I see you at the Casino in Wigan in the 70’s Nic or are you mentioning Northern Soul because it’s ‘cool’!!


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