Towry Law has been criticised by other IFAs for surrendering its Aifa membership because it disagreed with the trade body’s opinions on the retail distribution review.
Chief executive Andrew Fisher accuses Aifa of being anti-RDR and has written an scathing opinion of it in this week’s Money Marketing.
He attacks Aifa’s defence of commission and accuses it of not encouraging advisers to gain further qualifications. The national IFA firm supports the FSA on the review and believes the regulator should go even further in driving up standards.
But some adviser leaders believe Fisher acted in haste. Tenet chief executive Simon Hudson says: “Resigning because of one or two things said by an organisation is unhelpful. Nothing that Aifa has said has been set in stone one way or another. It has still got to make its full view and set out its plan for the future.
“Fisher cannot say there is only one way to achieve professional standards. It is not just about fees. That is not to say commission is right, either. Customer-agreed remuneration seems to address both.”
Aifa director general Chris Cummings says: “The last thing I want is for people to think we are a segmented trade body with segmented interests. In the new world, the professional advice community needs one voice. I feel confident that the RDR is just one part of things. Being professional is not just about qualifications.”
He also questions Fisher’s pro-fee stance, saying: “Trying to define yourselves by what you are charging is not going to work.”
At the Positive Solutions annual conference in Birmingham last week, outgoing chairman and founder David Harrison could not heap enough praise on Cummings’ work on the RDR and many small IFAs agree.
Norwest Consulting principal Harry Katz says: “Aifa does an excellent job. The whole Financial Services Compensation Scheme debacle was a huge victory for Aifa and for the small IFAs it represents.”
But Master Adviser principal Doug Brodie says he fails to see the benefit of Aifa. He says: “Aifa only seems to have the networks’ interests at heart.”
Brodie believes the vast majority of IFAs fall into the oneto five-person band category and that this is what Aifa should be focusing on.
He says: “I do not care about all this. I care about doing right by my clients and whichever category allows me to best do my job is the one I shall fall into.”
Brodie says he agrees with Fisher over qualifications and queries why a degree is not the minimum entry level into financial advice. He says: “That is just crazy. There has to be a minimum of a degree. People keep talking about being more professional but that should surely then be the absolute basic.”
Cummings defends Aifa against accusations that it represents the interests of any group – networks or small firms – over another and he rejects any view that another trade body is the answer.
He says: “In all other professions – accounting, actuarial, medical, even banking – there is one voice. IFAs come under fire because, yes, they get a better return but then they are higher risk and therefore are in the spotlight. The industry needs a single position, a single voice.”
Thinc Group chief executive John Simmonds says: “My general view is that it would be better if, like the exam bodies, we have a more concentrated view. As an industry with fewer voices, we have a better chance of being heard and influencing people.
“I would like us to have a far more co-ordinated and understood view rather than all factions seeming to be having a go at each other. I have always said the reason we are at a disadvantage against the banks is that they are so much more focused than we are.”
Towry Law’s actions have been compared with a similar move by Barclays in 2005, when it quit its membership of the trade body after launching its multi-tie and there are some concerns that other high profile defections could weaken Aifa just when it needs to muster all its resources.
Cummings says Aifa’s focus is supporting the cause of the professional financial adviser in its many guises.
Katz says: “Andrew Fisher has a job to do for his shareholders. If in making this noise about his fees-only stance and the RDR, it generates publicity for his firm, he is doing a good job of that and the business will be happy.”