Garry Heath: Professional bodies should not be lobbying for advisers

GHeath05

There seems to be widespread and potentially damaging confusion among advisers about the difference between a professional body and a trade association.

Professional bodies exist to improve the professional standards of their members. They set exam subjects and levels of excellence, and distribute learning materials. Crucially, every member is an individual. In contrast, the members of trade associations are businesses. Trade associations deal with the commercial needs of their member firms.

Unlike professional bodies, trade associations are animated by regulation, costs, supplier relationships and systems. Therefore, it is trade associations that lobby regulators, ministers, parliament and the European Union, not professional bodies.

Indeed, professional bodies tell me they get frustrated at being asked to lobby when they are not set up to do so. Doctors and lawyers try to do both but they have the Government as their major professional employer through the NHS and Legal Aid.

We do not. The big prize would be to lever the regulation of advisers away from the FCA and towards a professional body. That will be a long-term job requiring real sector unity but it would make sense to everyone without a vested interest in the current regime.

Meanwhile, it seems there are some that fear regulatory retribution if they join Libertatem.

Perhaps this speaks of the hostage mentality that seems to pervade some advisers. But it is nonsense. The regulator will not know the identity of members: that is confidential and will remain so.

Garry Heath is director general at Libertatem