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It&#39s not networking

IFA is one of those three-letter acronyms that rolls off the tongue of anyone in financial services. But IFA looks set to join PIA, SIB and Pep on the scrapheap of financial services acronyms that belong to the last century if advisers do nothing about it.

Some would argue that the Association of Independent Financial Advisers is a strong enough voice in the polarisation debate but others say 40 per cent of the market – the networks – are staying quiet at their peril and to their members&#39 annoyance.

M&E member Independent Financial Advisory Centre principal Michael Merrett says: “IFAs join a network for the support and lobbying. To keep independence should be part of that support.”

DBS member Paul Dodd & Co principal Paul Dodd says: “I do not think the networks are very strong at representing their members&#39 views but Ken Davy has been particularly good and particularly vocal.”

Scottish Life general manager(sales) Jim Gilchrist warns that the networks&#39 failure to get involved in the polar-isation debate could lead to their downfall.

He says: “Ninety-one per cent of IFAs join a networkfor compliance and training and competence. If we havea multi-tie environment, you will have a lead provider who is responsible for this. Once you get that situation, why on earth do you need a network?”

But Bankhall operations director Tony Murrell says: “Our understanding of multi-ties is the opposite. IFAs, or whatever they would be called, would still have to outsource compliance.”

Aegon director of cor-porate development Laurie Edmans says it is too early to be drawing conclusions about the outcome of the polarisation overhaul.

“I cannot see how you can arrive at a hypothesis about multi-ties. It assumes a certain style of regime which it is far too early to predict,” he says.

Tenet group managing director Simon Hudson says the company supports polarisation but does not see its abolition as the end of networks.

“We believe a network&#39s position gets strengthened because product providers have spent years unloading their direct salesforces and the infrastructure that goes with them,” he says.

Hudson asks why a provider would want to rebuild this costly regime to deal with multi-ties when it already exists within a network.

He says: “They are likely to look for someone who has those capabilities. It is no different to what we do at the moment where we are sub-contracted to fulfil the role of the regulator. We would just fulfil the role of the provider.”

But Edmans says IFAs should not get too excited about the whole issue and that IFAs have thrived in Australia where polarisation does not exist. “IFAs did not exist in Australia at the beginning of the 1990s but they are now the primary source of business and most are in networks,” he says.

But network members want polarisation to stay and want the networks to do their utmost to ensure this happen.

Merrett says: “I would not be worth my salt if I was not independent. I definitely would not want to be part of an organisation that goes down the multi-tie route because we would lose credibility.”

Dodd says: “Some of the networks do not seem to do anything about major industry issues. Small firms need the networks to create the voice and we do not have much of a voice in the overall arena at the moment.”

Gilchrist urges networks to listen to their members. He says: “They should be seen to be vigorously rejecting multi-ties. At the moment, they have been near silent.”

But Misys head of marketing Andy Bedford says the fight to keep polarisation is an issue for Aifa. He says: “The united voice is what Aifa was brought together for.”

Murrell says: “If we have many more individual organisations trying to bang the drum, we run the risk of becoming so diluted that the Govern-ment will not listen. The Government has said time and time again that it wants to deal with one organisation.”

DBS PR manager Sue Lewis says DBS believes it has influenced the right channels by responding to all the FSA&#39s consultations and taking part in the debate within Aifa.

“The IFA sector is verydisparate and having one organisation to represent itin Parliament is the best way to go,” she says

Hudson says: “Aifa is the biggest voice for saving polarisation. We want it to remain so that consumers can clearly identify where the advice is coming from but I do not think screaming in the press is likely to achieve anything.”

Merrett says it is not just the debate on polarisation where networks let their members down. He says: “I cannot see them surviving if we lose polarisation. As a pressure group, the networks could be very effective so they should be seen to be supporting polarisation in the press. It is that age-old problem that there is not enough lobbying about what we are doing right.”

Gilchrist believes networks should be seen to be more involved in industry issues. “I think there are major issues and some people should be thinking about them,” he says.

But Aifa director general Paul Smee thinks the networks are right to keep quiet. “I think we have made all the arguments vigorously and we are running a strong and concerted campaign with network support to maintain polarisation.”

With the FSA&#39s report to the Treasury on what it believes should happen to polarisation due at the end of this month, IFAs may not have long to discover their fate.

Edmans believes IFAs&#39 resourcefulness will help them through. “Most IFAs became IFAs because they are independent souls. They will not tolerate working for an insurance company because they could not stand the heavy hand,” he says.


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It&#39s not networking

IFA is one of those three-letter acronyms that rolls off the tongue of anyone in financial services. But IFA looks set to join PIA, SIB and Pep on the scrapheap of financial services acronyms that belong to the last century if advisers do nothing about it.Some would argue that the Association of Independent Financial Advisers […]


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