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MERGER EDGE: Phil Billingham

I have been disappointed, but not surprised, by some of the comments made in response to the proposed merger of the LIA and Sofa. I will not attempt to comment on individual views as I have no wish to make this personal. We are all entitled to our views and here is mine.

Many of the comments seem based on the stereotypical view that the LIA is a direct-sales body and that Sofa is full of anoraks that pass exams for the sake of it. Oh yes, and the CII is trying to take over the planet.

Let us try to lower the emotional tone a little and look at the background and facts. The LIA and Sofa are professional bodies, existing to improve and maintain the professionalism and standing of their members. They both have proud but different histories. The recent focus of both is on educational levels but this is not the full picture. They work behind the scenes to protect their members&#39 interests. There is a huge overlap between the membership and both bodies have members that work in the tied and IFA environment.

The CII is an examining body that has become the de facto provider of exams to our profession. It is over 100 years old, is used to working on a global basis and has significant resources and expertise. Do we want an amateur, new body supporting us, especially when dealing with an amateur, new regulator? It may, or may not be the case that once the exam review is complete, other bodies will offer relevant qualifications for our profession – in which case, the proposed new professional body has already stated it will recognise these.

Aifa is a trade body that represents the commercial interests of a key segment of our profession, IFAs. There are times when co-operation and co-ordination between all these, and other, bodies is in everyone&#39s best interests. There are other issues where no co-ordination is required.

As advisers, we are again, facing change and uncertainty. Our experience tells us the way to deal with this is to lobby regulators and MPs, raise our educational standards, educate the public and learn from more successful business models already being used by colleagues. Nothing new there and all our professional bodies have worked towards this for years. Many of us are long-standing members of both these bodies and an increasing number of us have served and worked towards these goals with a number of different bodies over the years.

One point to bear in mind is that an increasing amount of regulation and innovation comes to us from Europe and beyond. EU directives, wrap accounts from Australia, technology from the US. Sofa and the CII have been very active in these fields, without question leading the way in Europe. Both Sofa and the LIA are involved in other international initiatives. We cannot, live and operate in a bubble. In the UK, Sofa continues to work towards &#39chartered&#39 status. It is clear that a more obviously united profession is likely to achieve this sooner. The benefits will be to all, not merely the relatively few that qualify on day one. Consumer perception of our profession, never high, can only be enhanced by “chartered” status. We know this because we have asked them.

The activity I mentioned above takes energy, effort and money, and after many years of co-operation (yes, really), it is only logical that the LIA and Sofa have decided to combine resources to achieve these common goals more effectively. It would be foolish if the volunteer member directors were not looking to protect their members&#39 interests and to use resources more efficiently. There are no rewards or incentives for member directors that would encourage them to support this merger against their members&#39 interests. I am pleased by the proposed composition of the new board. These are substantial individuals, with many years&#39 experience and success behind them. But, as important, the majority remain at the sharp end. They know what issues advisers face. They are dealing with the same issues on a day-to-day basis. They are extremely unlikely to do anything that will be to the detriment of members – it will affect them at least as much.

There seems to be a fear that somehow “ordinary” members will lose out in this proposed merger. I must admit that I cannot see this in any of the proposals. What I can see is that the level of democracy in the new body will be greater than either of the existing bodies. “Ordinary” members (FPC level only) will be able to vote for directors for the first time in either body – surely that must be a good thing?

So why do I support this merger? Simply put, let us get on with working on the 99 per cent that we have in common, instead of focusing on the 1 per cent that separates us. Let us not allow a small minority of ill-informed comment to distract us from combining resources, putting aside irrelevant differences and working to improve the lot of all advisers. Let us support the new board and get on with it, please.

Phil Billingham is an ex-director and vice-chairman of Sofa, an ex-LIA committee member, Aifa member and chartered insurance practitioner


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