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Derek Bradley: Trade body or union? We don’t need any more

When I started PanaceaIFA some thought we were a trade union for IFAs. Nothing could be further from the truth. We achieve a lot with a low level of resource. We recognise that if someone else does something well, work with them and do not try and re-invent the wheel.  But it does put us in a position where we see a lot going on around the trade body world and where more could be done.

So, despite Aifa’s past failures and various moves to form another trade body, it may be better to look at a Mary Portas-style makeover rather than to ‘bin it’ and start again.

The problem Aifa has in the eyes of many disaffected IFAs is that it has not engaged with its membership as it should. Indeed a recent survey we ran demonstrated that IFAs no longer seem to have any confidence in the ability of Aifa to influence the FSA.

The pre-Stephen Gay leadership has ploughed an often poorly consulted furrow with little or no understanding of what the root and branch membership either wants or stands for. That is changing but I would suspect not quickly enough for many.

To set up a new trade body is not an easy task. With Aifa and Adviser Alliance already available, setting up another body solely for IFAs has no merit and it is unlikely to gain sufficient support, beyond an initial wave of euphoria, to achieve any long term credibility.

What do IFAs want a trade body to do?

Is it to act as a centralisation of views and opinions, or to see regulatory fair play for its members?  Or is it to see the protection of the word Independent?  If it is to protect the word Independent is that not better achieved by way of relationships with the CII in the ‘Professions’ makeover underway with the RDR process?

As restricted and independent advisers are all subject to the same regulatory constraints and controls, and to a great degree share the same ideals when it comes to looking after their clients, surely strength can found in the broad church model rather than creating a sect like trade body representation that will never get heard with any degree of seriousness.

So that brings us to the thorny question of trade body or trade union. The latter in society today does not carry the clout of pre-Thatcher years but unions still have the capacity to bring normal life to a standstill.

Professions do not make easy bedfellows with this ideal and I suspect IFAs would feel uneasy at being represented by a trade union and unwilling to get involved with mass protest.

Despite many IFAs feeling rightly aggrieved with the seemingly undefended imposition of regulatory change, I cannot see that a cry of “everybody out” will garner too much support from the industry or the public.

The sight of IFAs huddled around braziers in high streets up and down the land would not do the credibility image too much good.

So, where should we go in search for the holy grail of strong and united representation? Do financial advisers need another trade body?

No is the answer. But a lesson can be learned from the amalgams found in trade unions today.  There is strength in our industry in resource and a shared ‘enemy’. Because that very financial resource is just what is needed to fuel detailed relevant research, strong lobbying, PR and a lack of fear of persecution.

And if this is the case perhaps an industry alliance should be a consideration. Would it be so terrible to have Aifa’s office, for example, within the ABI as a sub-division allowing the larger rich resources to be shared for the overall benefit of the industry to enable, as trade unions would say, the interests of the “fare paying public” to be better looked after?

After all, regulation is seen to rain down hard on those least able to defend themselves. The banks have remained relatively removed from draconian punishments because the FSA is frightened of their legal Panzers as they sweep through Canary Wharf on a mission to inhibit the prevailing effect of regulatory creep upon their world.

So a New Year suggestion to Steve and Otto at Aifa and the ABI, get a date in the diary to smell some coffee together, I am happy to pay.

Derek Bradley is the chief executive of PanaceaIFA


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There are 13 comments at the moment, we would love to hear your opinion too.

  1. LOOK at the real situation.

    The majority of IFAs are self employed.

    That means in effect we operate in an environment of “every man / woman for themselves”

    Selfish as it may seem, small IFAs and Smaller firms do not have the werewithall to withdraw their labour or go on strike or exert pressure or whatever.

    If the CEOs of the large Life and Investment firms had originally got together with the heads of large firms and networks and said to the FSA – No, we are not going to co-operate on this mess, then we would not be having these meaningless discussions about trade bodies /unions.

    They did not and the unintended consequences of the whole RDR mess is going to be less providers, offering less products, with less advisers being able to provide economical services to even more consumers, who will be lulled by the major banks and direct providers to buying product without advice.

    Consumer detriment is built into the RDR and it is only when the consumer organisations such as Which and the media get behind the fact that this is what will happen that we have any chance of halting the lemming style approach the FSA has adopted and dug its heels in.

  2. More opinions than you can shake a stick at, that is the problem.

  3. Derek raises interesting points and I agree with much, if not all, of what he says.

    AIFA has a remarkably diverse membership – firms which are one-man local businesses through to major nationals and networks. Of course there will be many ways of looking at the issues. He is right too to say that there are more similarities in the services provided by independent advisers and whole of market restricted advisers than some may want to admit to. Remember that specialism puts us into a restricted box however independent within that field we are. It is the regulator which has changed the definition not the consumer and not a change by the practitioner. For that reason I support the continued inclusion of such advisers.

    The concern for all of us must be to support the research, the negotiating/lobbying of people with the time, knowledge, skills and patience we cannot individually muster. All of that only has credibility if the association is taken seriously. I suggest that finding ways to go forward on what we can agree on, and in sufficient numbers is key. Ranting and raving, without research, will be defeated. Divisions will be defeated. I happen to believe that any differences go with the territory but unity on key elements can be powerful. For that reason my firm is committed to AIFA and not in favour of further sub-divisions in lobbying capability however good some of the individuals are.

  4. The trouble is Len we are already defeated! AIFA have been no help at all.
    If the RDR doesn’t finish you then the levies will! The FSA wants shut of us and soon it will get its wish!

  5. I agree we really dont need another trade body. But having a union is a different matter. If we had a strong union RDR would no be happening in the way it is. Also there are IFA’s out there that have been poorly treated for decades by their “employers” (even though they are so called self employed”) by being paid poor rates of commission, no renewals, had clients taken from them if they left the company, not receiving due commissions when they left, and having agencies terminated for no reason, oh yes and being held to ransom by being told that if they complain and make a fuss dont expect a good referance!!. The way most nationals and a large number of smaller IFA’s have treated their self employed IFA’s is nothing short of scandalous.
    Yes im very much i favour of a union, whos with me?

  6. Derek is a great ambassador for our industry, but AIFA is history!

    AIFA told the TSC that only a minority of IFA’s are against RDR and grandfathering is a bad idea!
    How wrong and stupid can you get?

    Ok so AIFA claims this view represents their members but I’m more certain that this view represented the views of the Networks who fund AIFA. THose same Networks will benefit by the restricted advice and loss of members numbers because they inherit their trail fees 100%.

    AIFA claim to be the representative body for the IFA profession – who says? AIFA say! What we really need is a Trade Union and a leader like Bob Crowe. Now I’m a little to the “right” of Genghis Khan but the way the FSA has acted has almost trurned me into a revolutionary! Bob Crowe has made his members wealthly and our trade body representations has all but destroyed us.

  7. How much do Bob Crow’s more than 80,000 members contribute and how many maintain membership through thick and thin without a whimper? Without any back stabbing?

    Bob Crow would soon be bankrupt if he ran a union for IFAs.

  8. Derek’s correct – the ABI and AIFA would sit well together.

    Both made a massive error of judgement in complying with and supporting the FSA over the RDR. Now their members are feeling the effect of the changes and they need to get their act together quickly. I fear that it may be too late for many of the big insurers as IFA’s have built new models that exclude them. They are investing a fortune on systems to meet regulatory requirements and can see future business going to the wrap providers.

    But if the ABI and AIFA were to work together maybe they can roll back the ever increasing regulation that achieves little, acts as a drag on the profitability of the good and provides the bad with something to hide behind. The ABI has the strength to say No to the FSA. If its members refuse to co-operate there is little the FSA can do. There could be real strength in AIFA and the ABI together.

  9. Not to worry
    there will be no need for any representatives soon.
    You cannot represent an indusry which no longer exists.
    Julian Stevens is correct, Aifa shot itself in the foot over grandfathering, or rather the lack of it.
    The only way ahead is a revolution with perhaps Alan Lakey at the helm.
    Revolutions usually happen when people have nothing left to lose because the powers that be have taken it from them and are so busy Lording it over the minions, they are totally unconcerned as to their plight.Vive la revolution.

  10. If I felt that I could influence AIFA I would join.

    I fear that like others I would be a lone voice in the wilderness and worse, I would be bound by collective decisions with which I totally disagreed. i.e. RDR, grandfathering and the historic failure to argue for the return of the longstop (something that the current incarnation supports).

    Adviser Alliance is not aiming to replace AIFA. Its aim is to fight against bad regulation, mis-regulation and regulatory duplicity.

    Like AIFA we need new members. We want disenfranchised advisers to join with us. We want the networks to support those areas where we are fighting rather than mumbling in dark corners.

    If we lose these fights then in years to come there will be many who will moan about the dark winter under which those remainign advisers will eek out an existence. Do something now, make it your resolution for 2012 to fight for balance and fairness. To fight for reasonable regulation. To fight for the restoration of our Human Rights which have all but disappeared since 2001.

    Who is prepared to fight and who is content to talk?

  11. What we need is a body that will proactively show IFAs how they can survive and prosper as an indpendent post-RDR.

    That work needs to be done in the crucial 12 months before RDR-day, before there is fatal loss of moral in the sector.

    It is not the place of the IFP, PFS or other professional bodies to do this. AIFA are hopelesslessly compromised by allowing restrcited members. Adviser Alliance are fighting over history (and worsening the confidence needed to keep the sector alive).

    Step forward IFA Centre. Good luck for 2012 Gill Cardy, independents need you.

  12. As others have said – disparate opinions within the IFA community. Indeed like herding cats (Katz?).
    I would like to add a few points.
    A Union? I wouldn’t want to join any Union that would have me. Seriously the very idea of a union is for me about as appealing as sitting in a slurry pit. I just loathe the very idea. (I wouldn’t even join the NUS as a youth).
    Cozying up to the ABI? Well there might have been some advantage provided we could have a Berlin Wall between us, but a close association – not on your nelly. Pewrsonally I feel the ABI is more the enemy than a friend. They represent much of what I consider sub-standard in this industry – the life offices.
    As to comments regarding Grandfathering and the RDR. Well I must mix in different circles, but in my experience AIFA was right – those complaining about these topics are in a minority – a very vociferous one, but a minority nevertheless. I’m certainly old enough to be a Grandfather and have absolutely no sympathy with the concept. If you don’t have the intellect or the work ethic to get through the academic requirements one must ask if you have the ability to operate in our field which requires a high level of cerebral input.
    All this whinging about the regulations is of course understandable, but myopic. In the modern UK what say do we have over anything that rules our lives? There may be many who don’t agree with the EU. I happen to be a Europhile but my view and those against, I fully realise, count for nothing. Every facet of our lives is tied in red tape and rules, from where we park, to who governs us and we can shout from the rafters it seldom makes an iotas difference. No matter who is in power at Westminster we – the guys in the middle – get shafted. So in our daily lives we just get on with it – so why do we have such difficulty doing so in our working environment? We effectively live in a semi dictatorship – so we should be used to it.

    To plagiarise Bertrand Russell: We all have the opportunity to have a say in the Governance of the country but it only a 60 millionth say.

    Happy Christmas and a contented New Year to all.

  13. I am currently (one again) a member of AIFA. I think there needs to be a broad church and we will NOT agree on everything (eh Harry!).
    Network bosses do have too much influence, just as block votes from Unions do (look at who became head of the Labour party and how!)
    Sharing some services and costs with the ABI?….. well Maggie Craig often makes a lot of sense to me.
    Adviser Alliance – Are battling on specific issues and as a I agree with the issues they stand for/on, I am paying my dues there too.
    I have a lot of time for Evan Owen of IFADU, but disagreed on the structure, hence AA.
    As to Gill Cardy’s new IFA only block, I just think more advisers will end up restricted than was originally thought and as a result an IFA “college” within AIFA would be a better move and that is where Gill and those supporting her would better spend their time.
    Let’s not re-invent the wheel, let’s juts give it new spokes, which is what I wanted to see done with the FSA-FCA, rehabilitatate, don’t execute and resporn.

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