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MM Profile: Gill Cardy

The founder of lobbying organisation IFA Centre was an early proponent of charging fees and she believes the RDR will not be an obstacle to advisers staying independent.

For IFA Centre founder and managing director Gill Cardy, the debate about whether IFAs should remain independent or choose to become restricted adviser under the RDR is more than just an academic question.

Although she is no longer at the coal-face of giving financial advice, the IFA Centre owes its existence to Aifa’s decision last year to allow some restricted advisers to be become members. “Following the news that Aifa was no longer going to be exclusively for independent advisers, that they were going to allow in a part of the restricted market, I felt independent advice is a really, really important part of the financial services environment and it deserves its own voice and representation that accurately reflects its particular issues.”

Cardy says being able to remain independent is not a trifling decision but is fundamental to how an adviser chooses to operate. “I think consumers value that idea of being independent, that you have no links or ties that affect the advice that you give.

“It is a binary choice, it is black or white, independent or restricted. There is not a top end of restricted. Your disclosure documentation will have to say you offer an independent service, a restricted service or the third option is that you offer no advice at all.”

But she does not buy into the argument that it is going to be difficult to remain independent under the RDR.

“If someone is saying, I would be doing exactly what I am doing now and I am an IFA now, my argument is I don’t think you are going to have to do anything different. There are a number of firms who have made it there position that being independent is a terribly onerous thing, I do not believe that to be the case and the FSA does not accept that is the case.”

Cardy has experienced both tied and independent distribution. She started as a temp at Guardian Royal Exchange before moving into a full-time role in sales support. After six years, she was made redundant and decided to study for an MBA before rejoining the company’s direct salesforce.

This was not an experience she enjoyed, describing it as “enlightening but fairly unpleasant” and she soon left to join IFA firm Fiona Price & Partners. After only two years, she left to set up her own firm.

“She was thinking about selling the business and I had just got my AFPC, so I took the opportunity.”

One factor that pushed her towards setting up her own firm was the ability to move to fees. “I wanted to work on a fee basis and at that time there were very, very few firms that either did that or thought it would work.”

She could see that working on a transactional basis was not in the best interests of either the business or the clients as the need to get new clients became the overriding consideration.

She says at the time there was no shortage of people who said it would never work and 14 years on, there are still people saying it will not work.

“It requires you to think a little bit more thought into what exactly you are selling and it requires a different set of words to explain how you charge and what you do but when you explain, people get it.”

In 2007, she sold the firm to Nicholls Stevens and stayed with the new firm for two years on a non-advisery basis.

By 2011, she was looking for a fresh challenge and the Aifa decision prompted her to set up IFA Centre.

The set-up of the organisation has been funded out of Cardy’s own pockets and she says it needs to get to around 2,500 members to be successful. This is about 10 per cent of existing IFA numbers and she says this number will not only generate sufficient income for the organisation to expand far enough to do its job effectively but will also give its views enough weight to be taken seriously. So far, there are 20 member firms and 72 individual members with further membership applications being processed.

She expects the number of independent advisers after the RDR to remain “broadly similar” to the current number and she describes IFA Centre as having three purposes – a lobbying organisation that will also offer independent advisers practical business support combined with some consumer education. “Lobbying and representation with the regulator is important, lobbying in Parliamentary terms is important but the other focus is going to be supporting IFA firms in practical terms, such as through events or producing guidance materials. The final part is explaining why consumers are best served by independent advice.”

The appointment of Phil Billingham as non-executive director is evidence of the IFA Centre’s increased focus on adviser support. “We are thrilled to welcome Phil on board. His vast experience and deep understanding of the IFA market will prove invaluable as we seek to expand our reach. Phil has demonstrated a strong commitment to working with IFAs to help them survive periods of regulatory change, moulding their business models in order to work more effectively.”

The way that the regulation of IFAs has been handled by the FSA, and the RDR in particular, has resulted in some IFAs thinking that it is simply not interested in entering into discussions with the industry but Cardy says this is definitely not the case.

“The FSA absolutely does not want to get rid of independent financial advisers. They know where the good advice comes from. The sad fact is they still see a lot of poor practice when they go out and look at firms and it is the poor practice that is reflected in the papers around on switching and so on. There needs to be a better style of communication that needs to be positive and constructive and does not shout at people.”

As well as representing the interests of independent advisers in the UK, Cardy also says it is important for IFA Centre to be able represent the views of independent advisers in Europe.

“Europe does not have anything like an independent advice sector and if we end up having no representation of firms which look like our IFAs, then you wonder how those interests end up being heard and represented as necessary.”

Despite fresh calls this week for the RDR to be postponed, Cardy says it would be a mistake to delay the process and IFAs should instead be fully concentrating on getting ready for next year.

“From an IFA point of view, there is plenty of information out there and plenty of support so people can run their businesses and make their decisions, prepare for next year. I don’t think firms should need or want to delay any more. This has been in the pipeline for an incredibly long time.

“If you are an IFA now, you are whole of market, with a fee option, the leap to independent under adviser-charging is not that much for a leap.”

Born: RAF Wegburg, West Germany
Lives: Fareham, Hampshire
Education: City of London School for Girls, Trinity College Bristol, University of Nottingham
Career: 2011 – present: managing director, IFA Centre; 2004-09: FSA Smaller Businesses Practitioner Panel; 1998 – 2007; founder and principal, Professional Partnerships; 1996-98: IFA, Fiona Price & Partners; 1994-95: direct sales, Guardian Royal Exchange; 1993-94: MBA at University of Nottingham; 1987-93: Guardian Royal Exchange, sales support / mortgage desk/appointed rep support, etc
Likes: Commitment, enthusiasm, passion
Dislikes: Hypocrisy, thoughtlessness
Drives: Toyota Celica
Book: Jonathan Livingston Seagull: A story by Richard Bach
Film: V for Vendetta
Album: Eye in the Sky by Alan Parsons Project
Career ambition: for independent advice to be the gold standard, available to all
Life ambition: To make a difference
If I wasn’t doing this I would be…Doing something else in financial services – it’s all I know how to do!

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There is one comment at the moment, we would love to hear your opinion too.

  1. “The FSA absolutely does not want to get rid of independent financial advisers. They know where the good advice comes from. The sad fact is they still see a lot of poor practice when they go out and look at firms and it is the poor practice that is reflected in the papers around on switching and so on. There needs to be a better style of communication that needs to be positive and constructive and does not shout at people.”
    Dream on Gill

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