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Aifa’s View: High stakes

Aifa’s Stakes in the Ground initiative has come about in response to members’ continuing worries over retrospective action by the FSA and Financial Ombudsman Service, where there is a risk of current regulatory standards being applied to assess actions that were taken against a different economic and regulatory backdrop.

There is little universally accepted documentary evidence of custom and practice from years gone by. Stakes in the Ground proposes to document today’s accepted practices, the prevailing economic climate and general environment for financial services. The benefit is that, should complaints be received about a type of business in future years, the FSA and FOS will have an accepted record of market practice to refer to.

This will not be a one-off exercise, as times and economic conditions change.

No system is ever perfect but this will provide a much more robust mechanism than exists at the moment, where we are forced to recreate past practice from scattered sources.

The initiative is simple to describe but will be tough to implement. It is important to say that we are not seeking to establish best practice. This is a simple recording of how the market operates, which can then be reviewed in future years when it becomes necessary to understand industry procedures and the factors that influenced decisions.

So far, we have received positive comments from all sides of the industry – and that includes policymakers. Aifa started the project but it can only be truly successful if we engage with all sides of the industry, so the AMI, ABI, Apcims, IMA and BBA have all been consulted.

We have now moved on to inviting research firms to pitch for the work and recently issued an invitation to tender. Response to this has been excellent and we aim to make an appointment in the autumn. Member participation will be absolutely critical and further details will be supplied shortly.

Talking of our members, we are rapidly approaching the deadline for the Aifa membership consultation. If you have not had your say, download the (brief) consultation paper from our website at www.aifa.net. As they say, decisions get taken by those who show up, so please do it today.

One of the bad habits I picked up from a previous chief executive is to use my summer holiday as a time to reflect on what is going well and what needs improvement in my organisation.

Frankly, this chief executive could be a real pain in the rump, as he would also come back with a new management theory, courtesy of the latest guru he had read while on the beach. I hope I have not picked up that trait but the autumn will see Aifa ramp up our activities and improve the services we offer to members.

I realise this column has been light on the usual regulatory topics. They will probably return next month and anyone want- ing an update on Mifid can always phone me.

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