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Outside Edge – Robert Reid

When I heard the phrase Advice First, I was pleased that some of my

comments in the past such as “planning before product” had finally taken

root in the IFA mindset. But I was to be disappointed as this phrase was

the new name for the IFAP/Aifa joint promotion company.

Some time ago, I was asked whether I had joined Aifa and I replied in the

negative when the individual pursued me on my reasons. I explained that

taking money from providers was, in my opinion, not sensible when trying to

represent IFAs.

I was then told that I had this all wrong. It was not sponsorship. The

providers were in fact members. Despite this “distinction”, I remained true

to my original beliefs.

I must admit, though, to being intrigued by the timing, given that the

polarisation review is yet to conclude.

Do they know something we don&#39t or is this simply a costsaving exercise.

In any event, we cannot go on expecting the providers to promote a single

channel of distribution, no matter how successful it is at present.

Nor do I believe that campaigns such as Tax Action have any measurable

effect on those individuals seeking independent advice.

The only way to ensure the growth of independent advice is to put in place

an independent quality mark similar to those used in the US and, before all

you CFP holders write to me, this is a mark awarded by the clients of the

adviser&#39s practice and not a body where he or she is a member.

I should also head off those of you who feel that the ISO standard will

fulfil this void. If you believe this, then you do not understand the

workings of ISO. Interestingly, if ISO recognises the six-step process

promoted by CFP, then any body using the same process will be able to

access the same ISO mark, which must dilute the CFP&#39s current offering.

The sting in the tail for such a quality mark is that the IFA must deliver

all that it promises if the client rating is to be acceptable. This

includes not just the services provided but the range and quality of other

services available but not currently relevant

Providing enough firms support this service, we could very soon have a

reliable means of the public comparing one adviser from another.

This means that, initially, some sort of estimated benchmark (albeit

subjective) will be required, with a more statistically reliable index

following as soon as possible.

A single benchmark will be insufficient to provide a proper basis. We will

need to compare the national average with the programme average against the

professional or ideal average.

By comparing your firm&#39s rating with the benchmark,you can then determine

what changes you need to make now and in the future.

I would suggest that it is the assurance of a quality scheme for consumers

by consumers that will extend the reach of independent advice. Simply

relying on the providers will not ultimately be to our benefit. We need an

independent voice and that means we need to pay for it without looking for

money from the providers. Perhaps the professional bodies are the answer

but only when we give them our support and are prepared to pay a

professional level of subscription.

Robert Reid is principal of Syndaxi Financial Planning


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