It’s not often I invite IFAs to skewer me in public but any readers of this column that will be attending Aifa’s annual dinner in London next week might see me wandering around.
I will be a guest of BPP Learning Media, which recently launched a case study retail distribution review qualification with Aifa. So feel free to come and say hello, or worse. It will be interesting to hear people’s views, as well as those of the Aifa, with regard to the RDR. One of those who I suspect won’t be making any speeches yet, sadly, is Stephen Gay, incoming director general at Aifa.
This week it was reported that Gay will officially be taking up his new post on December 1. He told Money Marketing: “Members need the assertive representation they receive from Aifa, AMI and AFB. I am keen to build on this and ensure the interests of members are recognised where it counts.”
The word assertive fills me with gloom. In recent weeks, Aifa has been coming out with increasingly bizarre comments, including the suggestion that IFAs are like shopkeepers and product providers should be paying them to distribute their products.
In the past few days, I have received a number of emails, including several from senior Aifa members, that disagree with this analysis. One of them told me last week: “My clients get the products for free – what they pay for is the advice. Whether they buy anything thereafter is irrelevant, they still pay.”
Another said: “I am bemused by Aifa’s stance as I have never thought any professional IFA/financial planner had a stock of products to sell. We only sell our expertise, like other professionals. If we need a new product, we get it from a manufacturer (generally via the internet) at cost price and pass it on at that price.
“If IFAs think of themselves as shop-keepers they should be quite pleased that Mark Hoban recognises they are as well qualified as a McDonald’s supervisor – they are indeed among their peers. Nothing wrong with that but it is not a professional service.”
Some advisers have suggested that Aifa’s latest pronouncement has been urged on it by its close ties with IFA networks, whose current business model will clearly be affected by the RDR.
It is an interesting theory. My own worry is that it is also indicative of intellectual drift at Aifa and an attempt to revisit the battleground of the early 1990s rather than deal with post-2012 realities.
What is really needed is an incoming trade association boss to spell out a few harsh truths to his members – and some of his staff. As PFS chief executive Fay Goddard pointed out last week, hoping that any of the RDR proposals will be watered down ahead of 2012 is likely to end in bitter disappointment for many. Far better to prepare for the future and make the support you will provide to those who begin to engage in the process your core message to members.
Ironically, Aifa is actually taking steps to do that. The new Diploma in Investment Planning, available through BPP Learning Media, allows advisers to gain a qualification that exceeds the minimum level four requirements stipulated within the RDR, without the need to undertake gap-filling CPD. These case study-based assessments still involve a series of examinations but reflect much more fully the daily work of an adviser.
To outside observers, a strong emphasis on this side of Aifa’s work would not only be highly practical but would also demonstrate the trade body’s new commitment to professionalism.
Instead, what we see are forlorn attempts by Aifa to stop the RDR clock. Only last week, another article in Money Marketing saw Aifa’s policy director Andrew Strange facing both ways. After spelling out precisely some of the points I have been making here, he still felt the need to call for “an appropriate, pragmatic transitional period, without cliff-edge dates, for competence to be evidenced through vocational routes rather than examinations”.
Not only is that not going to happen but, more worryingly, what this and Stephen Gay’s comments seem to suggest is there will be a balancing act between the militant tendency and more realist wings of the IFA community, with a public lean towards the former.
Like its 1980s counterpart, the IFA militant tendency’s views are forged on mistrust and suspicion. Its members regard any pronouncement by the FSA and other official bodies as an attack on their very right to exist.
By contrast, the realist tendency has a more sensible long-term appreciation of where Aifa and its own profession should be headed in the coming years. For their views to be ignored or downplayed in the hope of keeping the militants onboard is a tactical mistake. I would much rather lose the loonies than the realists.
Nic Cicutti can be contacted on firstname.lastname@example.org