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MERGER EDGE: Mark Ommaney

I am glad that the details of the proposed merger have now been mailed to LIA and Sofa members so that we can debate the specifics of the plan. We have been pleased to see an energetic discussion developing in the press over the past few weeks but the fact is that, with the fine detail missing, some of the assumptions have been well wide of the mark.

I was a little surprised to see someone suggesting that an LIA vote for the merger would be like turkeys voting for Christmas. First, the members are not turkeys, they are professional advisers with independence of thought and action and I am sure they were not flattered by the reference. Second, to suggest that the merger would be akin to their extinction is frankly ludicrous.

Let us look at the facts. The merger would give us the biggest representative body for those involved in the financial advice sector and therefore a stronger, more unified voice at a time when the financial services industry still faces consid- erable reform.

We need to make our voices heard and this is the best way to do it. The LIA&#39s John Ellis has done fantastic work in the past, offering intelligent and reasoned views on some of the political and regulatory issues that determine how we make our livelihoods.

The creation of the Personal Finance Society will give John and the other board members a bigger and better platform from which to continue this work.

The society will be owned by its members, have its own board and is a separately constituted part of the Chartered Insurance Institute. It is the Personal Finance Society&#39s board that has responsibility for the development and implementation of the strategy and business plan. Again, I refer you to the summary of proposals sent to the members last week. “The task of putting into operation the agreed strategy will fall to the Personal Finance Society&#39s executive team, who will report to the board.” Sofa has always had a similar relationship with the CII and it has built a sizeable and credible organisation, with its own clear agenda, in an impressively short space of time.

Membership will be open to all who work in the industry. Everyone who holds FPC or equivalent (becoming the Cert-PFS) will be able to vote. Members who have passed three AFPC examinations or have equivalent qualifications will be eligible to stand for the board.

There is a broader point on qualifications and it is an important one. Some have sought to focus on those whose qualifications would not enable them to either vote or to stand for the board.

My response would be that to establish a professional organisation we have to draw a line for basic qualifications. If we did not, then membership would mean little. If the merger were not to go ahead, the LIA plans to do this anyway in its own transition to professional association.

Let us not forget that these proposals were overwhelmingly supported by LIA members when they voted on them in March.

Second, there is a course of action open to those who lose their right to vote or to stand for the board. They can become better qualified.

Are the merger&#39s opponents really saying that the basic FPC is too difficult to be set as a basic threshold for competence? I think that is an insult to the membership.

And have they missed the wider debate, about the need to create an association with real professional standards, which are clear enough for the public to recognise and take reassurance from?

Make no mistake, this proposed merger is part of a plan to raise our game. We have to do this because we have continually to get and maintain the respect both of our clients and also the regulators and politicians who set the structure of financial services in this country. It also enables the LIA to achieve its five-year strategy in a shorter period of time. The formation of the PFS will be a major step forward in achieving both of these.

Fortunately, I also believe that the majority of our members – both the LIA and Sofa – want to see this merger succeed. They will take the change in their stride and they will gain more from the bigger, broader organisation. They will do what it takes to establish our new standards and make them stick.

Our focus is on the majority of hard working, qualified advisers who have the will and the competence to help turn our business into a profession. I urge you to support the merger.

Mark Ommanney is director general of the LIA


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