View more on these topics

Aifa&#39s 80/20 vision

When the new single trade body for IFAs was set up last September, its

dream was to give the community a united voice. So how does director

general Paul Smee respond to criticism that it cannot hope to represent the

views both of small and big IFA firms? &#39If you like what it is doing 80 per

cent of the time and only disagree with its stance 20 per cent of the time,

this should be good enough,&#39 he tells Joanne O&#39Connell

Are you the odd one out at parties? Is telling people you are an IFA a

conversation stopper? Do people whisper about pension misselling behind

your back?

For IFAs who feel nobody understands them, help is at hand. Association of

Independent Financial Advisers director general Paul Smee says IFAs can

join forces through trade bodies, be kept up to date on relevant issues and

be part of an organisation which lobbies on their behalf.

Launched last September, Aifa was set up with the int ention of giving

IFAs a uni ted voice.

Smee says: “Joining a trade body is the only way for IFAs&#39 voices to be

heard. Aifa was set up to represent the interests of all IFAs from sole

traders to large firms.”

However, Aifa has been given a mixed reception by IFAs. The trade body has

not hit the spot for some IFAs who say its lobbying is ineffectual, that it

does little to raise the plight of IFAs and its fees do not offer value for

money.

The Analysts director Tom Kean says: “I want a trade body to lobby on my

behalf and shout the views of IFAs from the rooftops but Aifa seems

ineffectual at lobbying, does not get our message across and its fees are

expensive. You can bet your bottom dollar most people do not know about the

plight of IFAs.”

Bateman Group senior consultant Ian Smith says: “IFAs do need a good,

single IFA organisation to speak out for us but we have not got one so

far.”

However, Aifa also has strong supporters, with some IFAs saying they have

been waiting for this type of trade body for a long time.

They believe Aifa will achieve results precisely because it is not as

confrontational as previous representative organisations.

Lambourn Buckingham partner Susie Footit says: “It is about time we had a

trade body like Aifa. It is quick to respond to issues at the forefront of

IFAs&#39 minds.”

Aifa&#39s recent move to secure the membership of the UK&#39s biggest

high-street IFA, Bradford & Bingley, sees it representing 60 per cent of

IFAs.

Smee says Aifa provides several services for IFAs. These include a focal

point for press comment and Government contact and disseminating

information on industry issues so IFAs can identify trends which may affect

them ahead of time.

Aifa has 13,500 regist ered individuals from more than 5,000 firms and

Smee says it has the membership of sole traders as well as big firms.

However, some IFAs from big firms say there is no need to join Aifa as

they can stand alone while small IFA firms say they have found other ways

to get their voices heard.

Hargreaves Lansdown chairman Stephen Lansdown says: “I am not a member of

Aifa as it would be a waste of time. We are a big company so we are large

enough to stand on our own two feet. If we joined Aifa, we would be paying

money for nothing.”

Informed Choice managing director Nick Bamford says: “I am not a member of

Aifa and do not need it to put across my views. I am fortunate enough to be

able to speak to journalists regularly in both the national and trade press

so I have a different channel to air my views.”

Some IFAs say Aifa membership fees are too high and the charging structure

puts them off.

Wentworth Rose managing director Philip Rose says: “We have been tempted

to join Aifa but we think the charging structure is problematic. If you

want to join Aifa, you have to pay a company fee and then pay another fee

for each member of your firm who wants to join as a registered individual

so our firm would have to pay four times over. Why should we do that when

Aifa will not go to four times more trouble on our behalf as a result?”

However, Aifa is worth the expense as far as Chadwicks director Richard

Ross is concerned.

He says: “I think Aifa is doing a tremendous job. It is actually doing

things on a practical level which makes IFAs&#39 jobs easier. For example,

offering meeting rooms in London at good rates for IFAs to meet their

clients is useful. I receive email every two to three weeks keeping me up

to date on industry issues. Aifa not only lobbies on your behalf but also

lets you know it is lobbying on your behalf.”

It is lobbying which is seen by IFAs as a primary func tion of trade

bodies and they say this is where Aifa falls down as it does not seem to

shout loudly enough.

But IFAs admit it is difficult for any one trade body to represent such a

diverse range of views, ranging from sole traders to big companies.

However, they are not happy to be a member of an organisation which may

not voice their individual opin ions on industry issues.

Bamford says: “A joint voice is a great strength but it is also a

weakness. There can be common ground among IFAs but there is also a range

of different views. When you sign up to a trade body, they have to

represent all their members but speak with one voice. I do not want a trade

body like Aifa to purport to represent me, the IFA, if they do not support

my views 100 per cent.”

Kean says signing up to a trade body is like being part of a political

party, as it must represent the views of the majority. He says: “Like in

any democracy, you have to toe the line. Trade bodies have to take the

views of the majority of their members.”

But Smee says he always answers IFAs who are concerned about the majority

view swamping their individual voice by saying it is the same in any

collective and they have to be realistic.

Smee says: “I always say to remember the 80/20 rule. If you like what Aifa

is saying 80 per cent of the time and only disagree with its stance 20 per

cent of the time, this should be good enough. As an individual member of a

collective group, you cannot expect to like everything Aifa says 100 per

cent of the time. But we do try to make sure everyone is happy 80 per cent

of the time.”

Recommended

US giant pays £1bn for Gartmore in big pension push

NatWest&#39s fund management arm Gartmore has been snapped up by a top fiveUS insurer in a deal expected to signal its expansion into the retailpension market.US giant Nationwide Mutual Insurance is acquiring the fund manager for£1.03bn, comprising £110m assets and goodwill of £920m. Regulatory approvalshould be completed by the end of June.The deal is being […]

Bill Mott

The investment indus try calls him a star fund manager but stockpickingguru Bill Mott talks about himself in far more disparaging terms.In his late 40s, he descri bes himself as a “geriatric” fund manager in agame played mostly by the younger generation. Such modesty seem typical ofMott, who advises other fund managers never to believe […]

Abbey National cuts 500 jobs

Abbey National has announced plans to 500 jobs throughout its 780 national branches.At the same time the high street bank confirmed plans to add 400 jobs to offset the planned dismissals. Those who are among the 500 who will be made redundant will be invited to apply for the new positions.A spokesperson with Abbey National […]

Mass transfer pension peril

Some of the UK&#39s biggest pension providers offering high early transfervalue plans face losing billions of pounds as stakeholder makes its fullimpact.Those at greatest risk include household names such as Scottish Amicable,Scottish Equitable, Scottish Mutual and Standard Life.Under their obligation to give best advice, IFAs are compelled toinvestigate switching their clients from higher-charging pension policiesto […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment