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MM Leader: UK IFAs need a stronger voice in Europe

UK financial regulators will essentially be supervisory arms of a European regulatory regime.

That was the clear message articulated last week by FSA chief executive Hector Sants as he set out the future role and responsibilities of the Prudential Regulation Authority.

Sants told delegates at the PRA banking conference in London that the new prudential regulator will need to spend significant resources looking to influence the European agenda. But he also warned that UK firms and trade associations needed to increase their European lobbying efforts to ensure their voices are heard.

It is not a new message to point out that European regulators exert significant control over the financial services industry but the new three-pronged European regulatory structure tightens this grip.

Aifa director general Stephen Gay has admitted Aifa does not have the resources to lobby properly at a European level. Gay laid bare the trade body’s funding issues at last week’s PIMS conference by revealing that IFA contributions do not raise enough to pay the wages of Aifa’s staff.

He says he believes the “substantial” gap in funding required to lobby effectively in the UK and internationally can be addressed through new membership charges and getting more advisers to join.

We are likely to have to wait for the results of Aifa’s strategic review to find out how it will try to persuade members to pay more and sign up a significant number of new recruits.

The announcement that M&G and Royal Bank of Scotland are to join the 16 other associate members of Aifa attracted some criticism but there is nothing wrong with providers contributing towards the funding of IFA lobbying efforts as long as appropriate boundaries are set.

European regulatory developments, including changes to Mifid, the packaged retail investment products directive and the responsible lending and borrowing directive, are likely to have a profound effect on the adviser market.

The intermediary landscape in the UK is noticeably different to the bancassurance-dominated advice culture in much of Europe and it is essential UK IFAs have a strong voice to fight their corner.

It is in all IFAs’ interests that this voice is as powerful and well funded as possible to battle pther competing interests which are looking to shape the European regulatory agenda.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Hector's Pants 25th May 2011 at 9:49 pm

    The banks have a monopoly on lobbying, nobody cares what happens to IFAs, not even the IFAs.

  2. The real problem is that European legislation is already trampling across advice areas and making traditional methods of working by IFAs harder and harder. Advice and product are incompatible yet the regulators seem obsessed with product.You only have to look at the RDR to see that and what have AIFA achieved there? They have not addressed the issue of incompatible regulation with the advice process. So if they (AIFA) cannot lobby effectively in the UK what hope is there European wide?

  3. Steve Gay is talking defeatist nonsense. The reason he feels unable to fund the effort required in Europe is that IFAs do not want to fund a completely toothless organisation.

    I handed AIFA an excellent European lobbying platform with the Financial Services Department of BIPAR which was expanding the uptake of IFA-ism

    It can be done but IFAs need new organisation which is prepared to take a position and fight for it rather than accept the rulings of the powerful and attempt to mitigate them

    A new organisation is on its way – only another week

    G

  4. Steven Farrall (Adviser Alliance) 26th May 2011 at 11:27 am

    What all this really shows us is how horrible the EU agenda is. The EU is corporatist. It operates a version of crony capitalism whereby large businesses lobby to ensure that barriers to entry to their sector are high. At the same time EU functionaries and politicians use regulation as de facto nationalisation to ‘control’ industries – all in the name of ‘consumer protection’, but in fact to ensure for themselves a life of rich entitlement funded by the tax paying wealth creating citizen in private business. Sants (and probably Stephen gay) are part of this system or cabal and will benefit from it at the expense of us and our clients.

  5. Green Eyed Monster 26th May 2011 at 11:28 am

    Why does AIFA appear to believe it needs to go it alone in Europe? It appears to be conspicious by its absence from FECIF, the federation of europear ifa trade bodies. Is the membership fee too high?

  6. Hector, Stephen, you havn’t listened to the IFA, so do not tell us what we should be doing. PLONKERS!

  7. Julian Stevens 27th May 2011 at 2:26 pm

    Many people consider that AIFA has neither the resources or the bottle to lobby properly at a UK, let alone European level.

    I wonder what Garry Heath has in store for us? Perhaps he’s going to sit on Hector’s head.

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