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Do we need another trade body?

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

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Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. Great a new trade body. A new high profile CEO with no industry background no doubt, a board of directors, bank of secretaries, City of London address Rents and overheads, lawyers fees to set up, on going accountants, final salary pensions DIS, expenses staying in 5 star hotels, chauffeurs. My CV is on its way.

  2. Why don`t we just all set up a standing order for £20 per month per registered individual and send the money to Gareth “the hatchett” Thatchett. I feel that as we are constantly battling idiots in our industry who are only hurt by legal decisions made against them this would be prudent.

  3. Alan – the answer is obvious. Assoc. of Protection Intermediaries (API) as part as AIFA – just like AMI…

  4. One of Alan Lakey’s planks for suggesting a trade body for protection is that AIFA doesn’t know anything about protection. As an IFA and a member of AIFA’s RDR working party I was able to liase with the FSA to make them aware of the consequences of banning commission on protection plans and to point out the flaws in their idea that investment business paid for by fees could enable IFAs to advise on protection with a cross subsidy from the investment fee. Protection commission has not been banned. So AIFA does understand protection and so do the members on its Council. I do not know if Mr Lakey is equally ill informed regarding the other bodies he mentions to fly his kite but if he his, he does not deserve to be taken seriously.
    We do not need amother trade body with its as any one with a degree in” the bleeding obvious” would know.

  5. Does AIFA have lots of members? Any members with a view? What is the ABI all about? What has Chris Cummings move over to?

    Do IFAs care about their futures? Do they have one?

    Do the regulators and their political masters give a fig?

    Examples of useless advice are as common as evidence of useless regulation.

    Does Joe Public care what happens to what little money he has left after the system has rifled through his pay packet?

    People used to save, credit cards didn’t exist, Tesco nearly went bump, banking failures were tiny in comparison with recent events which happened during the watch of the most powerful regulator of all time.

    What has regulation done for us? By us I mean Joe Public, me for example.

  6. Oh dear, I seem to have ruffled a few feathers.

    Bill, if you re-read my article I was not suggesting a protection trade body, merely setting out my thoughts on the obstacles involved.

    I have no idea what AIFA knows, I merely judge on results as opposed to talk.

    The idea was to excite some comment – clearly I’ve succeeded.

  7. Any new trade body would obviously need teeth to tackle the regulator.

    To date we have seen little evidence of anyone bearing their gums on behalf of IFA’s.

    What we would not want is The Judean People’s Front compunding upon the The People’s Front of Judea.

    Michael Cotter

  8. Michael Cotter

    So, what do you recommend?

    There have without doubt been problems in the past with provider influence, something the FSA is attempting to remove from the market. Unfortunately the providers and their favoured distributors are quite capable of side-stepping any regulatory initiative.

    If we, sorry you the IFA could offer the regulators and their political policymakers a solution to all their ills they might just listen if it made any sense, but there’s the rub, are they capable of accepting something radical?

  9. Brian of Nazareth 23rd September 2010 at 5:20 pm

    Splitter !

  10. AIFA have been very effective… in setting up committees and issuing warm words.

  11. I personally think that we should have one trade body alone.

    The reason that the FSA has been able to deal with us in such a rough shod attitude is that we are a divided profession with too much snobbery where some advisers feel they are better than others.

    Until we all join together we will never be able to deal with the authorities from a position of strength.

  12. Bill – well done for standing up and putting your views across. I know Bill is knowledgeable on this subject and has been plugging away for some years with the FSA on his committee.

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