View more on these topics

Stephen Gay tells IFAs not to bank on RDR coming unstuck

Stephen Gay
Gay: ’I am here to take Aifa forward into a new regulatory and public environment. The organisation needs to be fit for purpose and this process will make sure that is the case’

New Aifa director general Stephen Gay has warned advisers not to take a risk with their businesses by assuming the RDR will be derailed.

In his first interview since taking on the role, Gay, who was previously Aviva director of distribution development, says there were things about the RDR that “need improvement”, although he declined to expand further on his concerns.

Following the recent Parliamentary debate and Treasury select committee call for evidence, he says advisers should continue to pursue policymakers to try to resolve issues they are unhappy with.

But he adds: “The FSA’s position on the RDR, and the Government’s position, as stated by Treasury financial secretary Mark Hoban, have been made very clear. It is far too early to say whether there will be any change in policy.

“What I would say as a general point to members is that it is taking a risk with your business if you make assumptions that something as major as the RDR is somehow going to be derailed when even those people who are sponsoring the debate consider that highly improbable.”

Gay is looking to achieve consensus within Aifa as far as possible, as he is concerned the trade body could become disconnected and lose its influence.

He says: “The big danger through a period of change is that the constituency we serve becomes fragmented and, when that happens, policymakers lose respect. When policymakers lose respect, we lose influence.

“This is not just about a current set of reforms. This is about the ability to influence policymakers year on year. I would not want to see our sector so traumatised by the next few years of reform that we are not in a position to created a concerted influence. When we operate as much as possible from a consensus, that is when we are at our most influential.”

Gay believes Aifa remains a representative organisation, despite comments from smaller IFAs who appear to have become disenchanted with the trade body’s stance on issues such as the RDR.
He says the council elects from small IFAs and it is part of Aifa’s constitution to represent all types of IFAs.

But he says Aifa cannot produce policy that is representative of every member, as views differ so widely.

Gay says: “On the RDR, we have got every manner of opinion from those who would love to see it stopped tomorrow to those who wish it had already happened and every opinion in between. This is not a job you take if you want to please everybody. But what you can do is represent what we believe are the interests of the majority and take account of those views in the minority. That is as reasonable approach to take as any.”

Aifa this week announced a strategic review to ensure the organisation is fit for purpose.

Gay says, given the state of flux the industry finds itself in, now is the right time to review Aifa’s proposition. It will also include the Association of Mortgage Intermediaries and the Association of Finance Brokers.

The review is expected to take at least three months through consultation with members and work with the Aifa council. It will look at issues such as funding, membership and the future direction of the trade body.

Gay says: “The industry is changing a lot and it is all happening relatively quickly. We have got a new Government, we are going to have a new regulator, the European agenda is coming to the fore and we are getting into the sharp end of the RDR. There is every reason to think that this is a proper and appropriate moment to conider what the role and the future and the vision of this organisation should be.”

Gay says he wants to ensure that Aifa is responsive to its membership. He points out this review does not mean to suggest the Aifa structure is wrong, just that it cannot be taken for granted that it is the right set-up for the changing regulatory environment.

He says: “When you see the environment shifting as much as it is and you see the membership voicing its views in the way it does, you do not go into this role thinking it is going to be business as usual.

“I am here to take Aifa forward into a new regulatory and public policy environment. The organisation needs to be fit for purpose and this process will make sure that is the case.”


News and expert analysis straight to your inbox

Sign up


There are 17 comments at the moment, we would love to hear your opinion too.

  1. “Gay is looking to achieve consensus within Aifa as far as possible, as he is concerned the trade body could become disconnected and lose its influence.”

    From what I read on the blogs, AIFA is widely considered already to be disconnected and without influence. In fact, many have said that AIFA was never connected and never had any meaningful influence, which is why so many IFA’s have felt it necessary to take the initiative for themselves and enlist the support of their MP’s. Were this not the case, then what would be the very obvious need for Regulatory Legal? In the face of an organisation such as the FSA, which gives nothing more than the odd bit of ground here and there, one has to ask whether or not all this lobbying and all these meetings really achieve anything much at all.

    AIFA needs to wake up to the fact that the way in which the FSA conducts itself and imposes one new initiative after another without regard for the legitimate objections of those who now see their very livelihoods in jeopardy have become issues of questionable legality, Human Rights and accountability. By all means punish wrongdoers and encourage better standards of advice, but forcing all and sundry to conform to the straitjacket of the FSA’s idea of a perfect business model is neither a just or practical way to achieve these objectives. As John Redwood has said “The RDR is a sledgehammer to miss a nut”. Why won’t the FSA listen?

  2. The FS world as it is is far from perfection and it is easy to point out problems.

    The RDR as it is is far from perfection and it is easy to point out problems.

    Replacing one set of problems with another does seem to me to be worth the cost.

    RDR will fall apart either before or after implementation. I would prefer before but in the end we get what we deserve

  3. Mr Gay had an opportunity to lay out his plans and the way forward but he unfortunately it seems has No vision and No commitment to IFAs and so for that reason:-I’m out.

  4. The Industry is mindful that at it’s board meeting in March, The FSA came within a whisker of scrapping this whole fiasco.

    Could’nt bring itself to do the honourable thing, for fear of losing face?

    What face I ask?

    As for AIFA, just like the FSA, they are unfit for purpose.

  5. Thats comming from somebody who is suppose to represent its member. (Not a spelling mistake)

    As you leave Stephen please turn out the lights

  6. This debate was itself a result of “crude IFA lobbying”, to quote Chris Cummings of AIFA.

    It is this very same “crude IFA lobbying” that is starting to rock the RDR boat! To continue the analogy: “Experts built the Titanic (AIFA experts) and amateurs (crude IFAs) built the Ark”. So let’s get really crude and double our lobbying efforts!

    Advisers will of course continue to pursue policymakers to try to resolve issues they are unhappy with, but RDR is so ill thought out that if implemented it will have a long term damaging impact on financial services.
    as a whole and not just for IFA’s!

    The first issue to resolve is the level 4 deadline because unless this is resolved their will be no one left to argue the toss and the FSA know this is one way to rid themselves of opposition.

    The TSC may well discover that RDR is a £1.7b house built on straw.

  7. IFAs are often very apathetic and psychological influences frequently mean that they do nothing because they are told that nothing will work.

    Mr Gay is continuing this process. If you tell people that their efforts are pointless then they will cease those efforts.

    The recent sea change is a result of the efforts of a number of committed individuals with abosolutely no assistance from AIFA.

    There comes a time when an organisation has to stand for something. Consensus is the politicising of representation which frequently means it is easier to do nothing and claim credit for unprvoable ‘successes’.

    AIFA is in danger of falling apart. Some people believe this might not be a bad thing.

  8. We are now at the point where nobody actually cares what AIFA says or does. It is now clear for all to see the shortcomings of this supposed trade association albeit somewhat late in the day. Those same shortcomings FSA have ALWAYS been aware of.

    No amount of postering or posing will cover up the fact that AIFA have been found out !

  9. AIFA appear to be pro RDR so look after your pro RDR members and leave the rest of us with the support of Adviser Alliance and the MPs who have shown great support to get on with pushing for justice. The FSA have proved that they are above the law and such power is dangerous!

  10. Mr Gay could have been of more help to the vast majority of IFAs if he hadn’t been so pro RDR in his previous job.

    AIFA is a busted flush

  11. If AIFA is supposed to represent Independent Fianancial Advisors then should he not do just that?

    Personally I don’t think AIFA has ever really represented the core IFA’s, more larger firms but unless I am mistaken many IFA’s are small firms or even one man bands and they seem to have no representation at all. This is why RDR has happened without their input, despite what the FSA and Mr Hoban say.

    The real issue is the FSA and RDR won’t solve any problems and it will mean more will not seek advice and those that do will find it more expensive (or it will seem so to them).

    The risk to a lot of businesses is not RDR but the ever in creasing costs and liabilitites with no end in sight and cost of regulation now far exceeds the benefit to consumers by a massive amount. The system will break eventually or most likely it will only be the large players that can operate efficiently in this field with “the banks” being the largest and “product providers” will do far more business direct so they will probably gain the most as the banks are large players already.
    It is thus understandably why they are not putting up much resistance to RDR.

    Is the consumer better served if this happens, no I don’t think so, and as Mr Hoban seems to be completely unwilling to listen to anything different and questions can indeed be made of his impartiality, it seems any concessions made will be small and minor compared to the overall objective, which is not about exams but about controlling the advice process into larger groups which are easier to manage and control.

  12. Let’s all vote with our feet. AIFA is only interested in its own survival – it’s just one more parasite, earning from honest, hardworking IFAs.

    Any ambivalence it shows towards RDR or any attempt to broaded its membership to non-independent advisers simply underlines its ACTUAL priorities. It is a politicized part of the FS establishment and IFAs should abandon it.

    And as for ‘non-profit’ – define profit ! As with organized charities in the UK, directors and senior staff earn fabulous salaries, marvellous pensions, great perks and expense accounts etc etc – who needs profit ?

    Stephen Gay – give us some detail of your earnings package and, perhaps, a copy of your CV so that we can determine what qualifications and experience you bring to the party.

  13. I actually believe that we are getting to a point of real traction in this regulatory jungle. Not a repeal of RDR, or a clawback of excessive FSA salaries, or imprisonment of Hector for regulatory incompetence, but a light shone into the Tolkiean world of unelected Orcs. The Treasury Select Committee will be most concerned (albeit 10 years too late) at the power of the Leviathon.

    Something good will come.

  14. @ Michael Fallas

    Courage, mon ami! You have to believe the tide is going to turn and it is.

    Hoban’s present intransigence means nothing. He is a junior minister of low intellect, caught between a rock and a hard place.

    The name of the game is to convince his superiors in Government of the truth we already know – the RDR is a car crash waiting to happen, is totally anti-consumer and is likely to massively damage the savings ratio.

    Once Osborne and Cameron wake up to that, Hoban will either be told to change his tune – something he would do overnight, flunkeys are like that – or he will simply be shuffled off elsewhere (or spat out!) and someone more amenable put in his place,

    So stay positive, Michael. There’s all to play for.

  15. I really love to read all these comments about RDR, platforms etc…. such a divergence in opinions. However, when I read the FSA platform consultation paper and look and the list of non confidential respondents all the ‘names’ who so love to pontificate on MM blogs are strangely absent.

    I know some of the FSA team who are involved in the platform debate, some of them come from an IFA background, so why not engage with them rather than blogging on here?

    Oh, and Gay is quite right that there is a huge difference of opinion re RDR within the IFA community…… what I see as the blinkered opinions of the old reactionaries on here is only one small view in the wider IFA world…..

  16. Dathan Steele
    “I know some of the FSA team who are involved in the platform debate, some of them come from an IFA background, so why not engage with them rather than blogging on here?
    Will they engage with us Dathan? That is the question.
    When the fsa say they want to engage with us that usually means they want to listen to our opinions then completely ignore them.
    I think perhaps you should go back to the “wider IFA view” on citywire where you are more appreciated.
    How is it you know the platform team anyway?
    Or are you not at liberty to disclose?

  17. AIFA is meant to be independent.

    IFAs are meant to be independent and represented by an independent body representing thier indepenece.

    Why therefore is annual AIFA dinner sponsored by Skandia with Tables purchased by Life companies fro their Reps? What relevance have they to the independent IFA represenatative body?

    Dear Mr Gay, address these issues, and you might get some support from genuine IFAs of 20 years + and standing!

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm