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Aifa’s view – David Severn

I now have all of 37 days’ experience working at Aifa. If there is such a thing as a “honeymoon period” for the director general of a trade association, I guess mine is over.

Last week included trips to Glasgow to speak at Aifa’s West of Scotland regional meeting and to Stratford-Upon-Avon to speak at the IFA Care conference. Both were excellent opportunities to meet members and prospective members and at both venues there was a very lively question and answer session.

The IFA Care conference cannot pass without mentioning Graham Fidoe, who stood down as chairman. Graham’s approach has been a model of how the industry and regulators can work together sometimes. One of the ways in which that spirit of co-operation can be encouraged is by actually speaking to each other. In that context, I was disappointed to hear from the FSA that so far it has not had any Aifa member come forward to offer a short placement to a member of the FSA’s staff to help it develop a better understanding of the problems and practicalities of working in a small IFA firm. If you want details, contact Paul Rich at the FSA.

Although the audiences in Glasgow and Stratford-Upon-Avon were different, the issues raised were similar and all fit with my themes of the IFA community needing more stability and certainty in the regulatory environment and lower regulatory costs. On the last of these themes, one IFA had costed what needed to be done to meet one regulatory requirement or another even before getting to the serious business of advising the client. That figure averaged out at 300 a case and if anywhere typical of the market as a whole, it is no wonder that consumers on more modest incomes are progressively being priced out of the advice market.

To have influence with the Government or the FSA, we need facts like this. The FSA is looking at the cost of regulation and will pay particular attention to the affect of costs on small firms. This is a golden opportunity for IFAs to voice some of their concerns over regulatory costs.

The requirements for all firms to have a menu is now only two-and-a-half months away. That might not be a problem if there was certainty about what goes in it but I am still awaiting a reply from the FSA to the argument I have put that some of the market averages are trying to compare apples with pears because the figures concerned include a significant amount of non-advised business. Aifa is also still awaiting a reply to the question of whether client money rules apply when an IFA retains commission to offset against future fees.

My first harsh word against Paul Smee. Paul, how could you have fixed an Aifa council meeting during the Cheltenham Festival? I am having to break my holiday and return to London and it will be the first time in 16 years that I will have missed a day’s racing at the festival.

David Severn is director general of Aifa

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