The Institute of Financial Planning has pledged its support for Aifa’s Manifesto for Advice and says any adviser that does not sign up should not be in the business.
IFP chief executive Nick Cann considers that the manifesto’s focus on consumers, differentiating advice from sales and the drive towards professional qualifications should be adopted across the industry.
He says there is still a long way to go before the principles are widely adopted and believes that more action is needed to implement significant changes.
Cann says: “It is easy to say we are going to separate advice from sales and make sure that customer-agreed remuneration is central to everything we do but a huge percentage of the marketplace is still at the basic FPC level and a huge proportion of the market is still doing product-led sales.”
But Cann recognises that many advisers are taking steps to bring their businesses up to a higher standard.
He says: “We have seen people going through professional qualifications and desperately trying to engineer and change their business models. It has taken a long time, a lot of commitment and a lot of effort but many of them have got there.”
“For smaller firms, it is potentially easier than for some of the bigger firms, because the bigger firms have got to have the capital, they have got to have system changes and they have got to have cultural changes. A smaller business can work out within their own business plan what they are looking to achieve and get on and do it.”
IFP membership grew by 35 per cent during 2007 to 1,850, with nearly 200 individuals becoming certified financial planners, bringing this total to 800.
Comment, p47; Aifa’s bold vision, p48