View more on these topics

Harry Katz: Why I stepped down from Aifa council

Harry Katz 480

Former Aifa council member and Norwest Consultants principal Harry Katz says he quit the council because he believes the adviser trade body often puts the interests of larger members before smaller advisers.

Katz (pictured) formally stepped down from the Aifa council last week after eight years, though he remains a member of the rebranded Association of Professional Financial Advisers. The trade body changed its name following a member vote last week, which also saw Adviser Alliance director and Highclere Financial Services partner Alan Lakey elected to the council in Katz’s place.

Speaking to Money Marketing, Katz says while he remains a member of Apfa, he did not feel it was right to remain on the council.

He says: “As a small adviser I have often felt that although there is lip service to our interests, they are subordinate to those who have the biggest wallets. It is also important that if you are on the council, in a similar way to ministerial responsibility, you have to toe the line. It would not have been appropriate for me to stay because I would not be singing from the same hymn sheet as other council members.”

Katz does not agree the decision to accept restricted advisers was a pragmatic one in the wake of the FSA’s new definition of independence.

He says: “What did Aifa do to try and get its membership, which is supposed to be independent, to understand that being independent might not necessarily be the hurdle that some vested interests were saying it was? It did nothing. And why? What vested interests were at work within Aifa?”

Katz is keeping a watching brief on the progress made by IFA Centre, run by Gill Cardy, but says he does know enough about the organisation to commit to joining at the moment.

On stepping down from the Aifa council, he says: “I do not want to sound anti-Apfa, or particularly bitter, but there are times when you have to do the right thing according to your own conscience and that is what I think I have done.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

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

  1. Harry, as a supporter of all things RDR you did not do anybody any favours.

    Hope you keep yourself to yourself in future.

  2. David Trenner - Intelligent Pensions 22nd November 2012 at 11:43 am

    Don’t you just love it when people come on here anonymously to slag others?! Exasperated … well your anonymous – and probably uninformed – comments exasperate me!!

  3. Any IFA who supports the RDR ban on customer choice regarding IFA remuneration is definitely not doing anybody any favours…

  4. Neil F Liversidge 22nd November 2012 at 1:01 pm

    Mine is a one adviser firm, independent and remaining so. We are small but it does not bother me because I do not suffer either from an inferiority complex or delusions of grandeur. Neither do I suffer from the delusion that advisers’ interests are in any way served by a pointless large v small, DA v network, independent v restricted argument which some, Harry and Gill among them, seem determined to perpetuate. AIFA’s Council – now APFA’s – took a sensible and mature decision which reflected the fact that the competition is not the opposition. The opposition is bad regulation by the FSA and MoJ which is a problem for larege and small, DA and network members, independent and restricted alike. As a small firm APFA member and an APFA director I don’t feel that it is or ever has been run in the interests of the ‘big boys’ to the detriment of small firms. Part of my job as a small firms’ representative is to ensure that our constituency is fairly represented, and that I do, but it is also my role, along with every other Council member to ensure that the whole advisers’ cause is advanced, not just one section of it. That I also endeavour to do. Simply put, if we all keep on trying to kill each other off the FSA will kill us all off. Harry doesn’t seem to realise that but for all your sakes I hope the rest of you do.

  5. Neil

    I really don’t want to enter into a public slanging match, but you have a politician’s ability to shape events and the truth to fit your purpose.

    I was a council member for eight years, during most of time the council had no such impediments to shouting from the rooftops that Independence was (and is) best. Those of us who sat on the council when the divisions of the RDR were announced can well remember (and it is no doubt minuted) that statements were made by our Chairman and others that Independence was ‘the Gold Standard’.

    That financial considerations forced a volte face is something that many – including you – don’t have a problem with. That of course is your prerogative, but I can’t change my colours with quite such facility.

    Unlike you I am not a paranoid hater of the Regulator. I do regard them as an inconvenience, but know that all industries have their bureaucratic burdens to bear – ours more than most, but I have learnt just to get on with it. I find the incessant moaning of some in the industry both wearing and boring. I don’t see an association as just there to fight unjust or unpopular rules and legislation, I believe there is much more to it than that. I think it would have been more helpful if the association had taken the lead (as indeed it did in some respects) to help members deal with and adjust to changes. But I found it hard to take that AIFA stayed silent when it was generally assumed that staying independent would be unbelievably onerous.

    On the issue of large Vs. small. Again I’m afraid you are not facing self-evident and demonstrable truths. I don’t want to regurgitate facts that may harm APFA – in spite of what you may think I’m not an enemy of APFA (in spite of some people’s efforts to make me such) – but you yourself will recall certain issues raised by a new member at the last meeting.

    Indeed I was for many years a keen member of the LIA before it was raped by the CII. That organisation had advisers of many persuasions and I was quite relaxed about it. No politics were involved and it never started out promulgating one type over another. However the important difference there was that it was individual members who paid individual subscriptions – it didn’t have corporate membership. Although like any other association it did benefit from sponsorship.

    I think your swipe at Gill was uncalled for. She is filling a very evident gap. There are those (and I am far from alone) that will still want to differentiate themselves as being independent – I can’t see what’s wrong with that. Individual businesses and groups of business in all industries seek to differentiate their offerings – it’s called marketing.

    I’m afraid we will just have to agree to differ on certain points. Financial advisers always have been a disparate group and a ‘one size fits all’ approach has never gone down well. It’s rather like herding Katz!

    Notwithstanding I wish APFA well and hopes it achieves some of the targets it has set itself.

  6. Neil F Liversidge 22nd November 2012 at 5:50 pm

    Harry

    As you’ve opened your piece above by calling me a liar I shall not feel obliged to pull any punches when I deliver some long overdue home truths.

    The FSA has moved the goal posts. Many advisers will be doing exactly the same job for their clients on 1 January 2013 as they were doing on 1 January 2012. However they will have felt forced, by the FSA’s re-drawing of the definition, to describe themselves as ‘restricted’. Many such advisers will have been AIFA Members when you sat on the Council and were glad to take their subscriptions. Strange then that you should now disdain them when their business model is, in reality, no different to what it was previously. Personally I’ve never needed to bull myself up by doing others down, but it takes all sorts I guess.

    Contrary to what you suggest, I am not ‘paranoid’ about anything and I try not to hate anyone; it’s bad for the soul. I do have a policy though – and have had all my life – of not accepting the imposition of power over me by anyone or anything unless he or it has professional legitimacy and is properly accountable. As even the politicians have come to realise in the last few years to their discomfort, the FSA is an unaccountable entity exercising arbitrary powers, and as pretty much everyone else realised when the banks bust the country, it wasn’t even very good at its main job.

    For the record I have never dealt with a single individual at the FSA who has been in any way unhelpful, discourteous or unpleasant. On the contrary, from the top down I have always found them delightful people to deal with. I just believe that their focus is wrong a lot of the time and that they do not appreciate commercial reality.

    You allude to ‘issues raised by a new member’. I believe in openness however, so rather than alluding, let’s call a spade a spade: Deals were cut years ago which gave discounts to larger members. They weren’t cut by me, or even in my time on the Council – though they may have been cut during yours. As you well know there is a general recognition now that the haphazard nature of that policy was not a good thing. Likewise you know that we are all working hard to take things forward on a better footing for the benefit of all advisers, large and small.

    I note your nostalgia for the LIA. That would be the LIA which allowed members to put letters after their name by virtue of their having paid the required fee, rather than having actually attained any form of qualification such as the CII requires.

    Repeatedly over the last two years you have suggested that the solution to AIFA’s problems was to wind it up. Fortunately for the adviser community your view never gained any traction because the rest of us knew that if we wound it up on a Friday we’d need to launch it again the following Monday. We also knew that realistically nobody else would represent the adviser community effectively. Note that word Harry – REALISTICALLY – because that’s what all this is about: Realism.

    At a recent council meeting you accused us, in your words, of “selling our birthright”. When I heard you pompously describe a profession open to all as a “birthright” I realised once and for all that realism is a quality you completely lack.

    This is my last contribution to this particular blog.

  7. Gillian Cardy @ IFA Centre 22nd November 2012 at 9:50 pm

    Neil,
    If there is a “pointless large v small, DA v network, independent v restricted argument” why was the Association of Independent Financial Advisers, with membership criteria set accordingly, named as such for so long?? If it really didn’t matter then AIFA should have been APFA since it was launched – speaking for the whole of the adviser community – instead it’s only the impending changes and the associated membership and cashflow implications that have caused the change of mind. And it’s not even really the whole adviser community is it, even now, if you include advisers from (multi-tied / restricted) SJP but exclude the (tied / restricted) men from the Pru who are no doubt delighted that they still don’t count as part of the “whole adviser community”.
    And please do not suggest that representing and supporting one section of the adviser community which is unique in the UK and Europe implies “killing off” anyone else.

  8. I have been an IFA since 1986 – before regulation imposed its politician’s view of the commercial world.

    The 1986 Financial Services Act introduced polarisation which determined that advisers were either agents of the client -IFAs or agents of the product provider – tied. This black and white scenario gained traction and consumers, in the main, understood what IFA meant.

    Some years back, the FSA decided that polarisation was past its sell-by date. The chap responsible, whether mouthpiece or architect, was David Severn, who has recently washed up on the IFA Centre board.

    His depolarisation meant that the black and white lines became blurred with versions of grey creeping in. Consumers were again confused by the variations of advice – tied, multi-tied, best of breed and other terminology. Some firms decided to be multi-tied and independent and the broth became so thick that even the FSA does not know who is what.

    Instead of utilising commonsense and bringing back polarisation the FSA decided the re-write the dictionary. Frankly there are too many hoops to jump through and obstacles to surmount. If I choose to battle through these impediments I can call myself an IFA.

    Do my clients care? They ask me if I am whole of market and the answer is, yes, within the areas I choose to advise on I am whole of market. Isn’t that sort of an IFA they say?

    Let’s face it, we live in a nuts world where Parliament, and the regulator it hatched, cannot conceive of the damage they have wreaked on a successful industry.

    To play their games by choice is not my way, I rather fling fingers in the air and deal with the important needs of my clients unhindered by the tosh that comes with meeting the IFA requirements.

  9. I’m with Neil, and will maintain my membership of AIFA/APFA. The organisation may not have much clout when trying to take on the unaccountable and unbridled monster of Canary Wharf, but then neither does any other. At least APFA is asking the questions (well, some of them ~ though why it never says anything about the Statutory Code of Practice For Regulators is a perennial mystery) and trying to make its voice on our behalf heard.

  10. From the very first time that I understood what it meant to be an Independent Financial Adviser I knew that it was for me.

    I will always remain grateful to the bancassurer which gave me the opportunity and ( excellent ) training to start off in this strange industry. That does not change the fact that I began as a tied salesman for a company with pretty duff products.

    When I received authorisation as an IFA aged 29 (networked, it has to be said) I was as proud as can be. From that day forward I have fought against anyone, or anything, that tried to prevent me doing the very best for my clients. I work for my clients and nobody else. That is what makes me an IFA.

    As Harry infers, IFAs are not easily herded, like catz.

    Chris Cummings hammered the last nails in the coffin of AIFA. APFA means nothing to me as it will take money from, and convey legitimacy on, the likes of SJP. From Hambro Life, through Dunbar and JRA, this breed of salesman has sullied the opinion of public and media alike vis a vis “financial advice.

    I still feel pride in my profession but curse the industry and the regulator for seemingly wishing to grind me and mine down.

    Harry, Alan and Gillian, I have long had respect for each of you. I just wish that you, being amongst the best that we have, would stand united for IFA recognition, instead of seemingly in different rooms.

  11. I have the greatest of respect anyone who fights for what they believe in so hat’s off to all of you for that.

    On the other hand I have very powerful aversion to you lot duking it out in public like a bunch of wannabe WWF ‘Smackdown’ contestants.

    I can only speak for myself but I’m hardly likely to tie my penant to any organisation that purports to represent my interests yet at the same time partakes in such juvenile antics on the web.

    A plague on both your houses until you both grow up.

  12. As Simon Kershaw said “Harry, Alan and Gillian, I have long had respect for each of you. I just wish that you, being amongst the best that we have, would stand united for IFA recognition, instead of seemingly in different rooms.”
    I am not too fussed about what job title I have and nor are my clients. My business cards haven’t described me as an IFA for ages as Harry will know having taken the mick out f what i have on them, but they describe what I do and my clients (and I) want me to work as THEIR agent. on their behalf for an agreed charge for my work.
    The Independant tag describes things better than restricted, but i am NOT too worried eitehr way. What I do object to is the FSA and MAS attempt to rewrite the dictionary!
    Dont’ forget the american War of independance started becuase of no taxation without representation and that is to some extent what FSMA 2000 did and now our potential prepresentatives are being divided instead of concentrating on common ground.
    I have paid my dues to the LIA, SOFA, PFS, IFADU, Adviser Alliance and AIFA. Our represntatuives are making my have to act like I do when voting, i.e. changing as their principles and aims change so that my main beliefs are accomdoated first. I’ve voted for practically every political party it feels like at times, not becuase MY views change, but what the leaders of different groups say they will do next!
    Come on all kiss and make up please xxxxx

Leave a comment