The LIA has firmly established its path towards professional body status. We have spent the last year putting together a package of proposals which were, first, agreed by our membership at an EGM in March and, second, set out in detail in a manifesto published at the time of our annual conference two weeks ago.
This path carries with it a responsibility to establish new principles of operation for what has always been a not-for-profit organisation. Of course, there is nothing wrong with making a profit but, unfortunately, problems arise when that becomes the main purpose. Research has shown that companies that do not put profit at the top of their priorities are 15 times more profitable over a 16-year period than those that do. Profit, like oxygen, is necessary for life, but not the reason we are living.
A study by Shell Group found that only 27 companies in the world have survived for more than 150 years. All those companies that have stood the test of time share four characteristics. They are conservative in financing, outward looking, sensitive to and engaged with the world around them, have a sense of cohesion and company identity with clear values, aims and principles and their leaders are delegators, leaving space for others to flourish, without losing control.
The LIA's job is to serve its members and others like them. This is not just about what they want. We have to persuade others to adopt and follow a vision. We look to maximise the long-term interests of the financial adviser.
I am sure the path the LIA has chosen to follow will be a difficult one. We are surrounded in the industry by many organisations who put profit first and customers last. I hasten to say that that is not a universal condemnation, much good work is done and there is a tradition of service in the industry. But in recent years, particularly when we look at the Equitable Life saga, it is clear that the needs of those we serve are not high on the agenda.
In the autumn, we shall start putting in place the new approach to member development. This will consist of a grading of membership, introduction of member standards, obligatory continuing professional development, and a redeveloped set of standards which will form the basis for our education programme and where individuals are not willing to play in the game our complaints and disciplinary system.
We hope that this will not be seen in a negative light, but more as encouraging financial advisers to aspire to a higher standard of operation. There will be a considerable call for leadership in making this journey. And our ideas of leadership may have to change. Former US President Harry S Truman once said: “There is no limit to what you can achieve provided you don't mind who gets the credit.”
In other words, our objectives are more important than any single one of us and the criteria indicated above for the longer lasting companies in the world demonstrate clearly the model we need to follow.
John Ellis is head of public affairs at the LIA