All these vitriolic cries of opposition to Aifa opening up to restricted advice appear to overlook the fact that “the regulator has changed the goalposts about what it considers independence to be”. Independence after the RDR is going to impose a set of criteria that will be all but impossible to meet in the real world.
Consider a pair of hypothetical clients called Mr & Mrs Jones who run their own small business and who approach a fully fledged IFA for comprehensive advice on a retirement savings strategy, including, but by no means limited to, pensions. Just the pension part will have to include PPs, SSASs and Sipps, not to mention all the options available via the latter two. Then we have all the options available at retirement that a full IFA will be expected to explore, explain, compare and discuss. Also, Mr & Mrs Jones are fairly well aware of all the negative sentiment towards pensions, and they manage to divide their income to avoid higher-rate income tax, so they also want advice on other longterm investment vehicles, including property, directly held stocks and shares, collectives, VCTs, EISs, Ucis, structured products, onshore and offshore packaged products, etc. The report to cover them all will be so voluminous that the bill for its preparation cannot possibly be less than £5,000.
Just what is the FSA trying to achieve by decreeing that anyone who cannot provide such a report will no longer be allowed to call themselves independent but must call themselves restricted, with all the negative connotations? Bonkers and divorced from the real world.
As for Aifa’s achievements, there do appear to be two. First, it did manage to persuade the FSA to reduce the share of its total levy bill apportioned to the IFA sector, even though the FSA has since devised other mechanisms with which to bleed us nearly dry.
Second, Aifa has managed to secure from the FSA approval for a route to QCF level four which is cost-effective, relevant and (I hope) manageable for all us old codgers who could not cope with a CII-style programme of exams.
Aifa is not a total waste of space and we have to bear in mind that it is up against a heavily armed and armour-plated leviathan that is so unaccountable that it does not even have to take much, if any, notice of the Treasury select committee. We ought perhaps to give Aifa at least some credit for doing its level best in the face of an almost untouchable opponent.