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Nic Cicutti: Gill Cardy needs a battle plan

Some time in late 1944, Joseph Stalin met Winston Churchill in Moscow to agree the terms of a new world order after the end of World War Two.

Churchill, according to Stalin’s official translator, was keen to impress on the Soviet dictator the need not to repress the Catholic church in Poland for fear of upsetting the Vatican. The Russian leader famously replied: “How many battalions does the Pope of Rome have?”

I was reminded of this story the other day, after reading that Gill Cardy, an IFA whose views I have long admired, is preparing to set up an IFA trade association.

The breakaway body, provisionally called the IFA Centre, is, in effect, a rebellion against plans by Aifa to allow “restricted” advisers to remain members of its trade body in January 2013, when the RDR comes into effect.

The decision is not that huge a surprise. Ever since Aifa’s announcement earlier this summer, Gill has been strongly indicating that she was thinking of taking the “independent advisers only” trade body route. The recent announcement is the culmination of many reports of her opposition to Aifa’s new course.

Let me say that I have huge sympathy for Gill’s stand. She is one of the UK’s most principled industry figures but has never been afraid to speak her mind about the issues affecting advisers in general.

Most important, she asks serious questions about the implications of Aifa’s decision on exactly who will be allowed to stay, or join, the trade body once it opens its doors to restricted advisers.

After all, as she points out on her website, restricted advice covers a multitude of sins, with advisers who are “almost independent” and others who are tied to a handful of providers or potentially just one.

Aifa’s proposed membership colleges, where decisions are to be based on the votes weighted according to the size of each college, is, simultaneously, both an improvement to the trade body’s current internal democratic structure and a massive potential liability.

It raises the potential both for membership views being reflected more forcefully within the organisation and also for some of the those more backward opinions to gain more traction.

In one recent interview, Aifa’s Stephen Gay claimed that the views of the “blogosphere”, that group of advisers loosely clustered around the Adviser Alliance, who have made so much of the running against Aifa in the past 12 to 18 months, is making his task harder when it comes to negotiating and lobbying of politicians and regulators.

I think he is wrong. It is Aifa’s inability to come up with a compelling vision of what genuine independent advice should be and argue constructively with its “rejectionist” critics, as well as showing in practice how it really does fight for the interests of IFAs, that has let it down.

If you want to achieve influence with a regulator or a politician, it is not just the pragmatic arguments over dots, dashes or commas of proposed rule changes that sway an argument but the fact they come from an organisation continually committed to the professional highest standards possible.

Ironically, the changes now being proposed for Aifa will make it easier for its critics to achieve influence within the organisation rather than outside it.

Another danger is that of a longer-term prospect for genuine IFAs to be marginalised within the combined body itself. After all, if no one now stands up for genuine independent advice, what is the incentive for an adviser to remain independent?

One might assume from my comments that I would be fully in favour of a trade body that starts by saying that it is completely committed to genuine independent financial advice and representing those who are prepared to deliver it to their clients.

Gill is highly respected outside the IFA community for her views. Last week’s validation of her call for a new IFA trade body by David Severn, one of the industry’s best strategic brains, is a step forward.

Unfortunately, I am still reminded of Stalin’s dictum about the Pope’s battalions when assessing the potential for a new trade body to take on Aifa’s quasi-monopoly.

To succeed, Gill will need to achieve a number of things. One of the immediate ones is to show there is a significant body of IFA opinion prepared to back her vision.

She needs lots more “celebrity signers-on”, advisers whose views are just as respected as her own, to throw their weight behind the IFA Centre.

Second, the IFA Centre needs to raise a banner not just for genuine independence but also for professionalism and quality advice. An alliance with one or more professional bodies is urgently called for to give the organisation greater heft.

Finally, I am not convinced that Gill has the luxury of waiting until an AGM takes place in the final quarter of 2012 to fully develop a proper strategy and vision. The gap on her website where a manifesto should be is highly telling.

Speed and clarity are essential if you want to beat the big battalions.

Nic Cicutti can be contacted at


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. As you say, ‘Gill will need a significant body of IFAs…..etc.’ In short, forget it. The industry is fragmented, argumentative and totally unable to agree about anything. In addition, most of us believe that absolutely nothing that is put to the regulator is listened to or digested, so there is simply no point in wasting time and money. The sad point that you as a financial journo fail to really understand is that one way or another, independent financial advice is going to be stamped out in coming years. That might not be fair or desirable, but it will happen anyway, whether it is by way of capital adequacy requirements or something else.

  2. @Huw

    I completely agree with your first two sentences. However I find it hard to believe that I will be the only IFA in a few years’ time. I’m sure there will be others.

  3. @Harry

    You’re damned right there will be others.

  4. @Huw The industry is fragmented, argumentative and totally unable to agree about anything.

    This type of statement is in danger of becoming a self-forfilling prophecy. Mainly because historically IFAs have focussed on the idea that they are independent of everything. Now they must focus on surviving and thriving.

    We could yet all learn to sing from the same hymn sheet.The song does not need to be either long or complicated. But given the fact that restricted & independent advisers both now need the same level of qualification words to the effect:

    “Given the choice between advice that is in any way restricted and advice that is truly whole of market and fully independent – which would you choose?”

    Is surely something all IFAs could fully support?.

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