Aifa director general Stephen Gay’s recent article, What we have done for IFAs, and the subsequent online postings, provoked an absorbing debate regarding what representation advisers want and what they deserve.
Much of the pontificating centered on what organisation best serves the needs of advisers and these arguments hinge on the assumption that a single body is capable of fulfilling such a role.
Consider the many problems. The term adviser camouflages the reality that each firm is distinct from its competitor in how it conducts business. Some favour commission, some fees and others a mix. Some firms applaud regulation and embrace its many distortions in the belief that a vigorous consumer champion is a requisite of industry probity.
Others feel regulation has created a misshapen environment in which the flag of consumerism has been hoisted too high. Many firms believe continual exam passing distinguishes them from their competitors, whereas others grudgingly accept qualifications as a means of survival.
Given such diverse categorisations, is it any wonder no one organisation can claim the support of a worthwhile majority? Maybe we are looking at this the wrong way. Perhaps we should accept the reality that these divergent viewpoints are widening the gaps and that the industry has become compartmentalised in its attitudes and beliefs.
Aifa attempts be all things to all people and while the broad-church approach provides for a media-friendly soundbite, it also means it succeeds in enraging a good proportion of advisers who believe it is spineless – a belief fostered by the previous director general. Equally, other firms may concur with Towry and resign because one or more aspects of policy fail to meet with their approval.
Gill Cardy’s mooted organisation is aimed at independent advisers – now an endangered species thanks to the FSA’s common-purpose thinking. Such an organisation must necessarily have a diminished membership that may prove non-viable if salaries and a robust infrastructure are intended. Other bodies such as the IFP and PFS have shifted into exam-selling and other remunerative areas such as professional status arrangements.
Adviser Alliance is different. As the only body operated by practising advisers, we are able to understand the reality of misregulation rather than repeating what others have told us. Unlike Aifa, we do not enjoy the auto-enrolment benefits courtesy of the networks and we operate on a shoestring, with no salaries or expenses.
More important, rather than opting for a broad-church approach, we only welcome those who feel regulation has failed and that it has shifted the balance to the point where advisers are in danger of falling off the edge. We can make a difference by focusing on strategic issues. In fact, when other bodies take up the cudgels in areas such as the long-stop argument, we know we have made a difference.
Hector Sants told the TSC that if individual regulators were made accountable for their decisions, few people would be willing to take up such a position.
Conversely, the FSA expects individual advisers to carry a similar and latent responsibility. This imbalance is the main divisive wedge that separates the regulator and the regulated and, until such time as the arena has had the bumps and the quicksand removed, there is never likely to be agreement between both parties.
Whether as individuals or as members of adviser bodies, we must keep fighting this encroaching menace.
Alan Lakey principal Highclere Financial Services