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Body double

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


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. I wasn’t sure if this article highlighted Alan’s naiveté or hubris.
    It needs status.
    “Excuse me Mr Regulator there’s a bloke from Adviser Alliance to see you”
    “Oh just one of those part time trade body chaps who are advisers that continually moan about regulation”.
    It needs critical mass
    “How many firms does he represent?”
    “Well he represents about 150, The IFA Centre represents another 75 and AIFA represents approximately 300”
    “So if I see him I’ll probably have to see the others as well”
    “Oh – tell him to take a hike and come back when I can talk to one outfit – what next a representative for advisers with rad hair?”
    All this of course apart from the fact that the Elephant in the room is Europe and an effective representative body will need the gravitas, skill, recognition and funding to do even a half decent job.
    I’m sure you and Gill Cardy’s embryonic organisation have some good points, but unless we all join together we are only background noise. This was the main mantra a few years ago – (as I’m sure you well remember). The criticism then was that were all far too fragmented to make a real difference and it seems that we are about not only to go backwards in time, but to go in entirely the wrong direction when we need the size and strength like never before to grapple with European regulation.
    I am just amazed at how many are in denial and seem to have lost the plot and absolutely amazed that someone of David Severn’s calibre has decided that he is one such. (Perhaps he’s angling for a new sinecure? If so I would regard that as a good thing – he has the necessary status, experience and gravitas – but would he work for £2,500 a year?).

  2. AIFA did not begin to complain about the lack of a longstop until Adviser Alliance did so.
    AIFA did nothing for older advisers re level 4 which is completely unnecessary for those who were set to retire in a few years anyway.
    Some will attain level 4 just to remain in the business they have worked in for most of their adult life, others will be forced into retirement. I know you will say that is nonsense Harry but sadly it is the truth. AIFA had no answer and presumably studied the shine on their shoes when the TSC asked what they were doing for older advisers.
    If Harry is trying to tell us AIFA’s voice will be heard in Europe when it cannot even find a voice at local level then he really is showing a complete lack of understanding at how advisers feel.
    I do not think Adviser Alliance has all the answers but I would rather be represented by a body with my, rather than their own interests at heart.

  3. @Harry – I don’t know why you are using so much bile… there is nothing sto stop someone being a member og both Adviser Alliance and AIFA other than you pay twice. I am……
    But then Alan Lakey and AA have been consistent on the Longstop issue, while Chris Cummings blew hot and cold on it and NOTHING HAPPENED. Hector Sants has been grilled on the Longstop and is publicley on record as telling the TSC the FSA were willing to look at it again, but NOTHING HAPPENED since February.
    The record of regulatory side stepping is building up and sooner or later someone is going to get …….

  4. Again I have to admit that I’m baffled.
    Older advisers. I am one such. There are two points here.
    a. As I have so often repeated we older advisers have been in the buisness for more than 5 minutes. It was evident since the advent of regulation in the early 80’ that qualifications were on the agenda. The old LIA had some really good courses, but few bothered. (They began only when it became mandatory). If you didn’t realise that you were going to have qulifications then you weren’t really concentrating.
    b. I don’t have a lot of sympathy for the complaint that older guys will be retiring soon. So presumably you have been practicing what you preach and have a decent pension pot and a reasonable investment portfolio. So retire now and enjoy. Alternatively just because you have been doing something for years doesn’t necessariuly mean you have been doing it right. The test (and they are not all written exams) merely asks you to prove it.
    The long stop. I’m sorry if my earlier piece was considered bile it’s just that I don’t subscribe to wishful thinking and I really never understood the preoccupation with the longstop. Firstly run off cover is available – so you have to pay for it for years. In your closing accounts it would be considered a business expense and allowable against your closing tax. What you should be looking for is a lump sum one off payment. Anyway the preoccupation rather indicates that those pressing for it may have skeletons in their cupboard. In theory if you have done the job properly – as many of us have as there are no shortage of those who have never had a single complaint – then why should you worry so much about one cropping up when you have retired? If your paperwork is in order…………
    It also rather highlights why you shouldn’t just take on any old client. I concede that carefully selecting your clients is no guarantee, but it does lengthen the odds.
    Again as I have repeated (as have others) if there are things with which you are dissatisfied in the way AIFA has handled things – don’t just throw your rattle out of the pram – try to change things from INSIDE. Get involved.
    I know that most of this will fall on deaf ears – that’s the main reason that IFAs get crapped on from a great height – (excuse the pun) but it’s like herding cats.

  5. Not afraid of Skeletons in the cupboard harry, just retrospective, thematic reviews waiting to pounce.
    What do you mean get involved? do you mean pay up then shut up? or will aifa really listen to and represent the concerns some of us have?

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