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Alan Lakey: What kind of adviser trade body do we want?


Since the imposition of statutory regulation many have questioned what type of adviser representation is required.

More specifically, many have argued about how any representative body should conduct itself.  Should it cuddle up to the regulator and receive occasional goodies and pats on the muzzle like a slow-thinking lapdog?  Should it bite as well as make growling noises or should it position itself where it lives or dies by virtue of its successes or failures?

The history of adviser representation is littered with disparate figures, including those who pursued the objective of balance in what they believed to be a severely tilted field where the regulator kicks downhill (apologies to Walter Merricks).

There also those who believe that regular interaction with the regulator and other government agencies is in itself a worthwhile end result, possibly believing that using osmosis or some arcane methodology they can subvert the less savoury tendencies of the E14 inhabitants.

Advisers are far too divergent to ever agree on a single course of action.  Additionally there is the heavy overcoat of apathy that deflects every worthwhile attempt to engage the rump of advisers into some form of coherent action.

Many advisers are trepidatious, fearful of exposing their heads above the turrets and whilst there is much disagreement about the way to react to overzealous regulation there is not much dispute that such regulation exists.

Many see Apfa as a talking shop, and as a Council member for 17 months I am often asked whether I believe it is capable of making a difference.

I am also asked what it is that I have achieved during my tenure on the council.  Have I managed to insinuate any personal philosophy into the overall ethos?  Have I accomplished anything to validate my position?  The sad answer is no, I cannot think of a single difference I have made as a council member.  Conversely I can point to many achievements accomplished outside of the council with respect to the Financial Ombudsman Service, claims firms, the Ministry of Justice etc.

Recently it was announced that Apfa would meet with the FCA to discuss the long-stop issue.  My request to be party to the meeting was rebuffed yet history will show that Apfa both now and in its previous incarnation has a lack of knowledge regarding the long-stop and associated issues. 

So, is the jury still out on Apfa?  Perhaps, as an industry, we get both the regulator and representative body that we deserve.

Alan Lakey is partner at Highclere Financial Services



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There are 22 comments at the moment, we would love to hear your opinion too.

  1. Nick Pilkington 2nd June 2014 at 4:16 pm

    Any more news on :Long Stop?

  2. Julian Stevens 2nd June 2014 at 4:19 pm

    With just a very few notable exceptions, APFA’s just a talk, talk, talking shop for a bunch of dickless men in suits. They never accomplish anything of any real value, yet somehow or other they still believe themselves to be worthy of the spaces they occupy and the money they spend in so doing.

    Only when APFA embarks on a serious campaign for the creation of a Statutory Independent Regulatory Oversight Committee will I hold them in anything but contempt.

  3. Philip Castle 2nd June 2014 at 4:34 pm

    Having had Harry Katz persuade me to become a member of the then AIFA and before Alan joined the then AIFA ( and before I left for a while in disgust) I had a LONG discussion with the then head of APFA, Chris Cummings about the longstop and my client agreements, which were a bone of contention with the then FSA as they made mention to the Longstop.

    As a result, Chris Cummings accepted my application to be on the longstop standing committee/discussion group for AIFA and then went ahead and booked a date without checking holiday dates with any members!

    The FSA ignored everything and Chris then moved on before a new Head for AIFA was found. It is interesting to see that APFA are continuing he trend of bringing apparatchiks in to the fold and then ignoring them!

    As APFA were asking for members to get involved with their latest discussions on the Longstop, I replied immediately saying I was willing and able to get involved and………. NOTHING…….. no phone call, no email, NOTHING. I know they are busy, but so are the rest of us.

  4. Alan

    Thanks for the work and efforts you make – you have a thankless task!
    The “long stop rule” is overdue – please remind followers to sign the Government petition to bring this matter back onto the agenda for the benefit of all IFA’s – past, present and future.

  5. Derek Bradley ceo Panacea Adviser 2nd June 2014 at 4:55 pm

    I am reminded of Geoffrey Howe’s resignation speech if APFA aattend a meeting on the longstop and do not have Alan there with them.

    I recall it went something like “ sending your opening batsmen to the crease only for them to find… that their bats have been broken… by the team captain”.

  6. Firstly thank you, Alan
    I feel you have laid your heart on your sleeve and your honesty is penned for all of us to see.

    Any trade body needs to be forward thinking; any head on consultations with the regulator are (as we know) a waste of time, money and effort; the need to think out side of the box is paramount. I believe we need to start to promote ourselves in a positive way, and invite our MP’s onto the panel

    The more we continue to push for the FCA to change the harder they will stick to the same, what’s the saying; “if you give enough rope they will hang themselves”
    We know they think they are bullet proof, you only have to see how they brush the TSC aside with impunity

    What we have at the moment is a load of self serving “trade/professional” bodies willing to take the money but failing to deliver the goods.

    I would argue we don’t get what we deserve, we get farmed

  7. Philip Castle 2nd June 2014 at 6:06 pm

    I forgot to say thank you to Alan for his efforts at APFA and for Neil and Harry’s before them, it may feel a thankless task, but it is still important to us even if it feels like no notice is being taken.

  8. Alan

    You seem to have achieved as much as I did, but I took longer to get nowhere – about 4 or 5 years if I recall and failed abysmally in retaining the ‘I’ in AIFA.

    As far as the Long Stop is concerned many may know that I have wondered what all the fuss is about. So if you retire at an early age (say 65) then you will have to wait till you are 80 before it all washes through.

    I would have thought the following a far more practical solution.
    1. Lobby the insurers to provide a decent run off insurance.
    2. Be a little more fastidious in the first place in who you take on as a client
    3. Ensure you know as much as possible about all your clients and if at all feasible know where the bodies are buried.
    I guess those 3 points are probably as effective as a Long Stop and might actually be achievable. To those who might shout ‘point of principle’ I say for heaven’s sake pragmatism gets better results.
    As far as Trade Bodies are concerned – after over 25 years in the business I have come to the conclusion that in the main they benefit those who run it more than those who join it. Of course there is the usual exception. The Trade bodies are in the main run on the behest of and for the benefit of the large firms and most of all the Networks. Not surprising really as it is those who pay the piper. Unlike a professional body where each individual is an individual member. So like the other professions (as after all that is what we aspire to be) our Professional Bodies should take on this mantle. A far fairer solution and they anyway have their USP – the SPS.
    I of course will remain a member of the IFP.

  9. Christopher Petrie 2nd June 2014 at 11:23 pm

    Maybe APFA should represent IFAs more than Nationals and Networks…perhaps becoming…oooh…AIFA, say?

  10. Derek Bradley ceo Panacea Adviser 3rd June 2014 at 9:16 am

    @Christopher Petrie A very good point. It would be interesting to know how many non network members there are. I have been led to believe this is in the region of 100 firms.

    There must be a universal franchise in a trade body, one ‘person’, one subscription, one vote for it to work.

  11. Philip Castle 3rd June 2014 at 9:32 am

    Taking up Chris P’s comments – Harry Katz tried very hard to get AIFA to work on a collegiate basis so IFAs would be represented separately but within the new APFA.
    Alan Lakey understandably decided to become a Restricted Adviser as I believe it better reflects where the majority of his work is and in doing so gives him more protection (I wish he had stayed IFA, but I entirely understand his reasons and those who chose to do the same)
    I have remained IFA as most of my work whilst simple, is Investments and pension sand not mortgages or protection although we are just staring to look for this work again so my apprentices can cut their teeth on it.
    If you are a member of APFA s, you should be arguing for a collegiate system within APFA for IFAs as Harry does. If you are not a member, WHY NOT. If you were not a member of IFACentre, WHY NOT as it could have worked, but for adviser apathy and advisers need to engage with their trade body of choice not criticize whilst not being members.

  12. @ Derek

    Indeed, don’t you think that some of us were pushing for that for many tears. However the truth is (as unpalatable as it may be) that IFAs are a tight narrow minded lot in general and getting them to part with a few quid makes getting blood from a stone look easy. As Gill Cardy can testify – you can run bugger all without the lolly.

    Only when there is an imperative (what I call a USP) can you ensure that the money tolls in. This has been the SPS and AIFA, in spite of pleas didn’t want to take this ball and run with it. The logical thing to have done was to have merged AIFA with (say) the IFP. But like so much else in the M&A world egos and territorial protection got in the way.

  13. Julian Stevens 3rd June 2014 at 10:25 am

    The kind of adviser trade body we want is one that does more than convene endless meetings, issue routinely ignored or brushed aside calls for the regulator to rethink its stance on various issues and write sundry articles for the trade papers that tell us little if anything that we don’t already know.

    What we want is ACTIONS that will speak louder than mere words, but sadly action seems to be the one thing of which APFA is constitutionally incapable. My views on what APFA’s game plan should be are well known and need not be repeated here. That said, it would be interesting to know just what if any efforts Chris Hannant and indeed any other members of the APFA council have made to enlist the support and alliance of their local MP’s in the battle against regulatory injustice ~ and I don’t mean just writing letters, because we all know that that tactic is unlikely to achieve anything of any practical value. I’m meeting my MP this Friday and, although he may declare that he’s done as much as he’s prepared to, at least I’ll have confronted him head-on and put my grievances to him face to face. What efforts have you made in this direction, Mr Hannant?

  14. I have met with my MP twice on these issues, once BEFORE she was elected to Parliament and once after. Unfortunately she has chosen to stand down at the next election and once I know who I believe is good for my local area ( NI don’t care which party they are from as they are MY and other residents representative and not the parties) I will arrange to meet with them and make some points.

  15. Exasperated Me 4th June 2014 at 2:40 pm

    You get what you pay for, or don’t as the case may be…

  16. @Exasperated Me

    Not entirely correct. Normally if you join a club you have more or less equal standing with the other members. Not so with APFA or AIFA before it. They work on the old Labour party system of the block vote. So although as a small guy you may pay pro-rata three times as much as a Network member, you are not taken into account as much as those with the big wallet. Commercially perfectly understandable – but it makes your statement incorrect.

    They are petrified that if they merely had an individual member system they wouldn’t get enough to sign up – and in that case your observation would be correct.

  17. Exasperated Me 5th June 2014 at 11:13 am

    Harry, you don’t seem to understand the long stop issue or what I was trying to say which was if you don’t pay you don’t get anything at all.

    Most advisers don’t see any value in representation which is why it is a dead duck, or parrot.

  18. @ Exasperated Me

    I think I understand the longstop issue only too well. Just consider:

    1. If as a small IFA you retire (early) at 65 then you will be 80 before it all washes through.
    2. The Long Stop is far more in the interests of the big organisations and the networks who fondly believe that they will all still be here in 15 years’ time. I concede for them it makes sense as they continue when their people have long gone out to pasture. But they are conning the small IFA into believing that they need it too.

    What the small guys should be doing is pushing for accessible and affordable run off cover and let the big boys take the hindmost. The cost of the run off will be a tax deductible expense off your closing year accounts – so pretty tax efficient to boot. (None of this applies to the big guys).

    Of course the best of all worlds is to choose your clients carefully in the first place and ensure you dot all the ‘Is’ and cross all the ‘Ts’. Bear in mind that from the latest Ombudsman Report only 0.5% of complaints come from IFAs (and then the Ombudsman doesn’t differentiate between IFAs and Restricted).

    So I just think that for the smaller intermediary they are barking up the wrong tree and making a fuss, when they should be looking at the broader picture.

  19. Exasperated Me 6th June 2014 at 12:20 pm

    Consider this former AIFA Council member and prolific scribbler on blogs.

    Under the current situation you could have retired at 65 and reached 80 in January of this year and you died the next day, since then a claimant’s solicitor has obtained a court order to prevent your estate being dispersed, your dear widow faces losing her home that you worked hard to provide.

    Or you could have left the industry 20 years ago and found something more socially useful to do and still have the above problem at any age.

    Run off cover won’t last forever and if it did have you any idea how much it would cost to cover the 40 years that you were in business?

    No, you don’t understand it at all. Neither do the regulators or those who control them, your elected Executive.

  20. No less a scribbler than you I think.

    It seems that you have completely misinterpreted both the law and PII.

    And as I said 0.5% of all complaints – how many actually to IFAs? Probably less. If you are that worried have everything in your wife’s name, or retire abroad. You must be concerned about some pretty flaky advice.

  21. @ Harry Katz

    Harry, you stated, “If as a small IFA you retire (early) at 65 then you will be 80 before it all washes through”

    You seem to completely misunderstand the heinous ongoing liability that extends to every adviser.

    Advice provided by an adviser aged 35 would be outside of the complaints arena when the adviser reaches 50. In the real advisory world every single piece of advice is unchallengeable forever and if not limited the challenge extends to the personal assets of the adviser.

    With the FOS being as incompetent and capricious as ever the potential for a future claim is quite high. Whilst better quality advice will elicit fewer complaints this does not mean that there will not be any!

    The cost of ongoing PII cover is likely to be prohibitive and, in any event, why should this industry be singled out for special venal treatment?

  22. Exasperated Me 6th June 2014 at 4:08 pm

    Harry Katz, you just don’t geddit do you? You swallow the regulatory hype like a good un.

    You also assume too much, personally I have no liabilities to worry about, none at all.

    15 years ago was 1999 so the only complaints coming forward would be from before that, most endowments and pension transfer complaints have fizzled out and there was no long stop as far as they were concerned as long as they weren’t surrendered or sold and in that case the problem is waiting to bite you in the bum forever. Going forward ALL complaints relating to advice post ‘A Day’ can generate a complaint, even a TESSA or PEP from long ago.

    Now of course the regulators could do the right thing and recognise the law and not “introduce” it as is being discussed at the moment.

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