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Chris Cummings

Aifa director general Chris Cummings is a great believer that you should study history to avoid making the same mistakes as your predecessors. In fact, he is even contemplating studying for a PhD in the philosophy of regulation and has written his thesis proposal.

It seems a perfect blend of the three things Cummings most enjoys – philosophy (he studied this at undergraduate level), writing (he has written two books on regulation) and the financial services industry.

But his interests did not always lie in these areas. When he was younger, he wanted to join the army and spent some time at Sandhurst but says it did not suit him due to his “problem with authority”.

In addition to a dislike of being told what to do, Cummings says he likes to challenge and test people’s way of thinking and this means he was “probably destined to do this job”.

He says voicing his opinions is what got him where he is today. During his final year as marketing director at Sun Bank, he kept saying mortgage intermediaries should have a trade body because lenders were well represented but intermediaries were not. When he left the bank, former Aifa director general Paul Smee asked him why he didn’t set one up.

“So we set up AMI with no members, no money and a desk in the corner of the Aifa office and we took it from no members to about 90 per cent of mortgage intermediaries within a year.”

A couple of years later, Smee left Aifa and was replaced by former FSA head of retail investment products David Severn. Severn left soon after due to ill health and Cummings was asked to take over the running of both Aifa and AMI.

About 18 months ago, the secured loan broker industry approached Cummings because they felt their trade body needed strengthening and so he also took on responsibility of the Association of Finance Brokers.

“It makes sense because, as a minister, would you rather have three meetings with three trade bodies or one meeting with someone who can tell you what is going on across the whole community? It gives us far more lobbying clout.”

Aifa celebrates its 10-year anniversary next week and looking back over the past decade, Cummings says in its first few years Aifa was heavily focused on establishing regulatory credibility which he puts entirely down to Smee and modestly says the difficult bit had been done by the time he arrived.

On a personal level, he is most proud of the fact that Aifa is now recognised as a voice in public policymaking and is consulted by politicians and senior civil servants. “Regulators only do what they do because politicians tell them. Politicians and civil servants shape policy so you have to operate at a public policy level.”

He is also proud of the trade body’s success in lobbying the FSA to allow firms to pay regulatory fees in installments instead of a lump sum and on reviewing the compensation scheme to reduce the burden of costs on IFAs.

Aifa has also had several successes at a European level, including guaranteeing a place for advice in future regulation.

“So far, we have been good at engaging in close dialogue with members, understanding their key business issues, forming that into lobbying objectives and then going and winning the battle.”

The combined membership of Aifa, AFB and AMI now stands at around 126,000 individuals. When Cummings took over, Aifa had around 60 per cent market coverage, now it has 85 per cent.

He says advisers should look forward to the June RDR paper as there are “things in there that I think members will be pleased to see”. He says: “In terms of things that we have been lobbying for that we would like to think of a substantial win for Aifa, making sure we end up with a variety of routes through the forest with which to get firms to QCA level 4 would be a very good thing.”

Cummings believes the FSA sometimes makes life more difficult for itself and cites the capital adequacy requirement paper as one such moment.

“There are things in the capital paper they perhaps do not regard as being their finest hour, so we are hopeful there will be a more pragmatic approach taken.”

He says the RDR should have been more about encouragement and regulatory dividends for positive behaviour rather than using a “stick” approach.

“June 14 is the RDR’s third birthday and I really think we would have got to where we are a lot faster if there had been more encouragement than the process we went through, which seemed a bit negative.”

On the thorny issue of commission, Cummings is adamant it must still exist although he says it should be called “payment through the product”.

He says: “It must be there, otherwise the only option is somebody writing out a cheque. That is appropriate for some but not for 15-20 per cent of people who IFAs currently look after.”

He is not convinced the regulator’s recent hints that procuration fees on mortgages may be scrapped is the best way forward and says it is “rushing to a solution” that may be inappropriate.

“It was only 18 months ago, less actually, that, because of our work at the European Commission, we had it specifically written into our directive that mortgage lenders could pay commission as there was a group of other interests that wanted it excluded.

“That was a big win for us, to have an amendment introduced to the European Commission voted through, and that kept all our mortgage people in a job so I am not in a position yet to say, ban commission from the mortgage market.”

In addition to the RDR, Cummings says Aifa has a full programme planned for the year ahead. It will launch a business transition service to help advisers assess what they need to do to become RDR-compliant and there will be a series of workshops to help IFAs weather the financial storm.

Cummings also wants Aifa to have a more prominent role in educating consumers on the importance of advice.

“Most IFAs do a damn difficult job and they do it extraordinarily well. If there was one thing I’d like to do, it would be to deliver pride to the IFA profession because we have been told for years that we are the poor relation and an embarrassment. If I could change one thing it would be that.”

Born: Wakefield, 1967

Lives: Cambridge with wife and three children

Education: Philosophy degree, Newcastle University; fellow of the CIM, chartered marketer

Career: 2005-present: director general of Aifa and AMI; 2003-05: director, AMI; 1999-2003: marketing director, Sun Bank; 1997-99: management consultant, PwC; 1993-97: head of marketing, PPP Healthcare; 1990-93: trainee consultant, then senior consultant, Mercer Fraser

Likes: Film, fabulous red wine, hiking in Yorkshire, comedy, clever people

Dislikes: Dull people

Drives: A rather boring Audi A4 but has aspirations

Book: The Midwich Cuckoos by John Wyndham

Film: The Usual Suspects

Album: Whatever is on my iPod

Career ambition: To run a trade body that is the envy of all the others

Life ambition: To have good friends, happy children and a long and blissful home life

If I wasn’t doing this I would be…Writing novels and doing a PhD in regulatory philosophy

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