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Taken to task

In June, shortly before the FSA’s retail distribution review was published, I wrote a column taking issue with financial advisers who criticised the menu system as if it were some alien construct that had offered them no benefits at all.

On the contrary, I argued, the menu system had been a compromise that allowed IFAs to escape the clutches of the FSA’s proposal in early 2002 to scrap commission altogether and replace it with a defined payment system or fees by another name.

Even more important, the menu offered advisers a vital breathing space to regroup and work through some key issues such as what the words “independence” and “professionalism” really stood for in the 21st Century.

The inference of my column, however, was that trade bodies representing IFAs had, for the most part, failed to come up with a new vision for indepen-dent financial advice.

Shortly after this com-ment was published, Aifa director general Chris Cummings wrote to me. Although his email was a private one, I hope he will not be too offended if I refer to it obliquely, if only because I’m sure that the views expressed in it are fairly well known by many advisers and some journalists, myself included, who have an interest in these matters.

Essentially, Chris made two points. The first is that despite appearances to the contrary, Aifa has been fully involved in all the regulator’s internal debates leading up to the publication of the RDR. For example, Aifa submitted its own thoughts on retail distribution to the regulator and is working confidentially to create policies that will help shape the future of the industry.

Separately, Chris told me, Aifa had set up a working party “made up of some of the most senior people in the IFA profession” who were working on a new vision for professional advice in the 21st Century. The working title for this, he said, was a Manifesto for Advice, to be launched in the autumn.

Last week, Money Marketing unveiled details of this taskforce. Its names include some powerful figures in the industry, including Baigrie Davies director Tom Baigrie, SimplyBiz chairman Ken Davy, Sesame chief executive Patrick Gale, Tenet group chief executive Simon Hudson, AWD chief executive Mike Kirsch, Bankhall chief executive Peter Mann, Thinc Group chief executive John Simmonds and Lighthouse Group chief executive Malcolm Streatfield.

Last but not least is Les Shields, senior consultant at Stewart Asset Management Group, in Glasgow, a stalwart of the old Nfifa and IFAA trade bodies, precursors to the organisation now headed by Cummings.

Now, of course, I doff my cap at all the illustrious names on the working group. But it was striking that Money Marketing also revealed one important absentee – JS&P Towry Law chief executive Andrew Fisher. He was quoted as “spurning” the invitation to join the group because he “fundamentally disagrees” with its objectives.

A number of things occur to me about the two related news stories. The first is that among the IFA industry’s big hitters who will form this taskforce, few or none – to my knowledge – are known for their utter hostility to the principle of commission. Of course, I stand to be corrected here. But even if they were, they are in a minority.

Which leads me to the second point – that there is a danger some of the conclusions reached by this task force may actually reflect the status quo within the industry. Certainly, this fear appeared to be uppermost in the mind of Andrew Fisher, who was quoted as saying: “I declined to join the taskforce as I fundamentally disagree with where its arguments are coming from.”

With hindsight, Aifa may come to regret the fact that its star names did not include one or two “outsiders” – for example, FSA Consumer Panel chairman John Howard, or even former Which? principal policy adviser Mick McAteer – who could have brought some more critical views to bear to the task force’s deliberations.

My final thought concerns the question of timing or rather of time running out. When Chris wrote to me, he envisaged the “manifesto” would be launched in the autumn. It now appears that the group will meet then and, presumably, it will take some weeks or months before its views are made known. If so, we are looking at a late autumn launch at best, with the New Year a possibility.

To be sure, things have to move at a certain pace. But once again, what we have is a situation where the IFA side of the industry is responding to a crying need months after another official report – the RDR – has already been published and, barring a few modifications, is currently on the runway awaiting take-off.

At best, this “manifesto” looks like a response rather than an initiative, its arguments conditioned and determined by yet another regulatory intervention. At worst, it risks looking like being too little too late to offer a decisive alternative vision for the industry.

It will take something pretty amazing for many people to be convinced that it really offers something powerfully different. I await its launch with interest.

Nic Cicutti is the editor of He can be contacted at


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