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IFAs have pro bono to pick with PFS

IFAs have reacted angrily to claims that they have failed to embrace plans to deliver generic pro bono advice to the public.

The Personal Finance Society and Citizens’ Advice Bureau have been running a pilot programme for a financial education programme, where advisers give up their time to help out in CAB around the country.

But IFAs are outraged by suggestions that the scheme has been hard to get up and running. They see it as a slur that both the PFS and CAB have bemoaned the difficulties in getting advisers to commit to pro bono work.

PFS head of public affairs John Ellis probably did not realise the can of worms he was opening when he first told of problems experienced by the pilot programme.

He says: “It is difficult to get IFAs to give up their time for free. You have to convince them that some business may come from it. If that does not prove to be the case, then it will be very difficult to justify the scheme.”

Ellis’s comments have prompted an annoyed response, particularly from firms that have signed up to the scheme.

Eldon Financial Planning IFA Tony Conner says: “It is very disappointing that the PFS’s head of public affairs hints that IFAs are unsuited to pro bono work. That is not quite the public face we want to PFS to present.”

Professional Partnerships financial planner Jonathon Davis says it is difficult to balance voluntary and paid work but it is important for firms to do what they can.

Other IFAs have highlighted how much pro bono work they do without being part of the CAB scheme.

Neither the PFS, FSA nor Aifa has statistics on the number of hours that IFAs give up each year for pro bono work. However, the PFS has said that it may push for chartered status for IFAs, dependent on them dedicating a set number of hours each year to generic advice for the less well-off.

The FSA is keen to develop a model for generic advice and is currently assessing the breadth and depth required, including how close to the boundaries of regulated advice it should go and how widely available it should be. It is looking at the issues of liability for the advice given and establishing a quality assurance scheme to help ensure a consistent standard in the delivery of generic advice.

In 2002, Which? published a report highlighting the need for a national financial advice network. It proposed a two-tier system, funded by fines paid to the FSA, with a generic financial advice planner working alongside professional advisers. It noted that there was no system in the UK for delivering generic advice.

The plan suggested: “Retail financial sector institutions and adviser practices should sign up to the network and employ general financial planners.” Yet all talk of the scheme has since died.

A straw poll of 10 small and medium-sized IFAs picked at random from around the UK reveals that all but one think they give up between five and 10 hours doing pro bono work each month. More than half claim this involves working with the CAB.

More revealing is whether IFAs feel they should have a moral obligation to give pro bono advice. The answer is a resounding no. Statistically representative this may not be, but it gives a idea of the wider picture. There is definite resentment towards moves to force IFAs to dedicate time to pro bono work.

Financial Management Group partner Chris Mellor says: “Why should we?We are having to pay more nd more costs. Regulators and Government are coming down harder than ever and now we are told we have to give up our time. It is ridiculous.

“It would stress me out having to go into a CAB and help out. It is something I would be no good at.”

Aifa policy director Fay Goddard says: “If you are happy to help people that have financial problems and want to do your bit for the community, then you are probably already doing so. It is one of those things that you are either disposed to do or you are not.

“Ask an IFA if they do pro bono work and the answer will more than likely be yes. Ask if they are willing to put aside a set amount of time on a set day at a set venue and they will probably say no.”

Pushing IFAs into pro bono work on the basis of a moral obligation is not going to work. Many of them are too tied up in the practicalities of running a business. It is about time and money in a highly competitive business environment.

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