Pensions minister Mike O’Brien has thrown his weight behind the Association of Independent Financial Advisers’ Manifesto for Advice.
At the Parliamentary launch of the manifesto this week, O’Brien said it is an important step for financial services and sets a clear vision for IFAs giving advice in the future. He said: “I think Aifa is doing exactly the right thing by challenging and indeed reinvigorating the financial advice market.”
The manifesto is based on six principles, including Aifa’s belief that advice firms should be free to operate commercially in whatever way best meets the needs of their business and clients, within the regulatory and legal framework.
It suggests that all new advisers should see themselves as training to become chartered, unless held back by a desire to specialise in a particular area where this would not be an appropriate qualification.
Aifa believes that within 10 years, chartered or equivalent status will be the preferred trading style for companies. The trade body’s manifesto makes clear that it now supports compulsory membership of a professional body.
It says that product providers must support the market for fair and high-quality financial advice and advisers have the right to expect a consistent, cost-justifiable and fair app-roach to their regulation.
According to a market study by Aifa, there would be a drop of £650m a year in long-term business if people could not seek professional advice and Oeic and unit trust sales would drop by £1.76bn annually.
Aifa adds that, given an appropriate regulatory regime, widespread access to professional advice could see a national personal debt reduction of almost £30bn.
Aifa director general Chris Cummings says: “There is an appetite to change things for the better – as shown by the debate surrounding the retail distribution review – but we need to ensure that we develop a regulatory regime that ensures that the maximum number of people have access to good financial advice.”