Are lobbyists too powerful a force in governmental – and financial regulators’ – decision-making processes?
This is the question Money Marketing posed in its last issue, using the Freedom of Information Act to look at the ministerial diaries for the Treasury, Department for Work and Pensions and the Department for Business Innovation and Skills, as well as senior FCA executives.
Money Marketing reporter Steve Tolley uncovered 613 contacts between ministers or senior regulators and financial services firms or trade bodies.
The Association of British Insurers notched up 33 meetings, matching the British Bankers’ Association. Chartered accountants trade body ICAEW achieved 26 meetings.
Equally significant were the meetings with large financial institutions such as banks, insurers, accountants and investment houses, which racked up hundreds of officially recorded get-togethers between them.
In contrast, Apfa met with FCA chief executive Martin Wheatley just twice. In Apfa’s defence, its director general Chris Hannant says the trade body meets with lots of other Treasury and FCA officials. Presumably Hannant believes none of the other organisations ever meet with those officials too.
The Money Marketing research is both intriguing and tantalising. The temptation is to assume lobbying – and the money needed to pay for it – buys influence.
There is a lot of truth in that – if there was not, why bother to lavish hundreds of thousands of pounds on lobbying firms to organise meetings and cosy get-togethers for you?
But the way these things work is much more nuanced than that. For lobbying to be effective, you need a combination of three things. One is access, with some sections of the industry finding it easier than others to be admitted into the politicians’ and regulators’ offices.
The second thing you need is a strong argument. The days of sitting opposite a minister, sharing a few public school reminiscences over a good claret and agreeing revisions to government strategy based on little more than a few common prejudices are long gone, if they ever did exist.
What matters now is preparation – the meticulously prepared and expensively assembled research document, handed over solemnly to the minister who passes it to a civil servant to report back on.
The research might be slanted, the questions asked and the solutions proposed might be driven by industry and business interests, but at least it offers the illusion of thoroughness and careful thought.
The third thing any successful lobbying effort needs is to go with the flow of public opinion. I am not saying there is no point in lobbying for an unpopular cause, or against a popular one. Indeed, in those circumstances it could be even more important to gain access to ministers or regulators.
But if you are lobbying against public opinion you will need to work three times as hard to gain any traction and, even then, there is limited hope of completely winning the day. An example is the ABI’s unsuccessful attempt to persuade the Treasury to allow its members to offer “impartial” advice over future pension options.
Which brings me to two further, related thoughts. The first is it would be interesting to know how many meetings were held between consumer groups such as Which? and the same ministers and regulators.
My personal guess is there were far fewer in comparison but they were by definition much more in tune with public opinion and therefore harder to ignore than companies which pay through the nose for privileged access.
My final thought is for poor old Apfa. The bitter reality is over the past 10 years Apfa has increasingly failed in the lobbying game. Its predecessors Nfifa and Aifa were led by skilled operators who knew the value of good headlines and sympathetic coverage by the consumer media.
They were seen as part of the pro-consumer trend – truly independent financial advice rather than commission-driven sales tactics had strong resonance with the public.
The problem for Apfa is its commitment to genuine independence has become blurred and there is no effort made to truly differentiate its members from any other financial salesperson.
Even worse, Apfa has become increasingly forced to focus on corralling a declining membership by promoting short-term populist policies at the expense of a broader vision for the advisory sector.
Before Apfa will be listened to again in the corridors of power it needs to form alliances with organisations it would previously have spurned, such as Which? and Citizens’ Advice.
But it can only do so if it is fully committed to a transformed and more professional sector of independent advisers, promoting their value and their services among the public.
Perhaps Apfa should consider merging with one of the other professional bodies in the sector, creating an organisation that combines a commitment to increased skills and qualifications with the lobbying needed to advance its members’ interests.
The alternative is Apfa’s continued slide into irrelevance, listened to by no one, its few remaining members included.
Nic Cicutti can be contacted via email@example.com