There has been much talk recently about a trade body dedicated to the needs of advisers specialising in protection. Some have suggested that the Association of Independent Financial Advisers should provide the necessary infrastructure, whilst recently Phil Jeynes proffered the idea that the Association of British Insurers, with its protection working party, makes the idea superfluous and that we should all support this route.
Evan Owen asked whether there are too many trade bodies out there. From the regulator’s perspective, it would be far more convenient to interact with just one body. This fits their preferred template of dealing with large networks rather than those pesky, directly authorised one-man bands and partnerships.
It does beg the twin questions of how many is enough and what is the point of them all? Some appear to have developed a money lust where every action seems designed to reduce advisers’ profitability by selling exams and assorted paraphernalia.
Others see themselves as guardians of the advisers’ moral code and seek membership (for an annual fee, naturally) in order to big up their kudos and sit at the top table. Aifa has mutated to the point where it seems to sit comfortably in that middle position trying to balance all requirements, akin to a managed fund perhaps.
So, is Evan right? Should there be only one representative body for advisers? Presumably, this thinking also extends to bodies like the CII, IFP and ifs – should there be only one provider of exams, etc? The unsavoury pole-climbing and shuffling of egos is unlikely to turn such a theory into reality so the question is moot but in the new world of the Prudential Regulation Authority and the Consumer Protection and Markets Authority, advisers need to have their justified concerns taken seriously.
Aifa already operates the Association of Mortgage Intermediaries, so logic might suggest they should also drive any new protection body.
Equally, Aifa has lost many members and seen support bleed away as a result of its fumbling of the RDR consultations. What does Aifa know about protection and what could they offer to the new body other than an infrastructure?
We have a number of existing protection organisations, such as the Protection Review and the Income Protection Task Force, and there must be potential for one of these bodies to transform into an appropriate organisation. Peter Le Beau is a leading light within both so he would make an agreeable director general. This might also appeal to Aifa members because Peter has a reinsurance background and has never been a practising IFA.
How about the ABI? Tom Baigrie has been seconded on to their working party so there is existing adviser input. Should we leave the promotion of protection entirely to the providers or is it somewhat like giving a free rein to the FSA to determine the current and future regulation? The interests of the providers do not always accord with those of advisers and we know from the FSA and Financial Ombudsman Service complaint statistics that consumers are notably unimpressed.
Maybe such an organisation is not needed as there are already numerous opportunities for leading (or vocal) advisers to meet and pontificate on matters of concern. Maybe Money Marketing readers would care to share their views. Aifa might not enjoy member input but I think it is a valuable idea.
Alan Lakey is partner at Highclere Financial Services