The headline, Aifa to admit banks, has set the bloggers blogging and has filled my email inbox with demands to know what I think, so here it is.
I have read a lot of principled and idealistic objections. I am reminded of the words of Prince Bernhard von Bulow: “To the meaningless French idealisms, liberty, equality, fraternity, we oppose the Prussian realities, infantry, cavalry and artillery.”
I do not know how many IFAs have ever run a national/international represen-tational organisation of any kind but I have, long before I ever became a member of the Aifa council, and I know just how hard it is to start and maintain one, especially when it comes to funding.
Everyone in the sphere concerned has an opinion on what the organisation in question should be doing but usually only 1 per cent will individually put their hands in their pockets. I also know the massive demands on such an organisation when it is forced to operate in the EU legislative sphere. Here are the realities:
Aifa could be a wholly democratic organisation based on one member one vote, with no significant influence from product providers, service providers, nationals or networks. That could and would happen if individual IFAs were prepared to dig deep enough in their own pockets to make it happen. The problem is that most of you have not and would not. It is the same facet of human nature that leads workers in other parts of the economy to opt out of trade union membership, knowing that they will still get whatever benefits the union negotiates for its members.
While a minority of us do and have always paid Aifa subs out of our own pockets, we are precisely that – a small minority – and regrettably I fully expect us to remain so. If I am wrong, of course, then the entire IFA community will sign up with Adviser Alliance, pay a realistic subscrip-tion in the order of £500 a year per individual, and Alan Lakey will then have the resources to create a wonderful IFA-only representative body which, in case you are wondering, I would very happily join. It’s the ideal. Personally I don’t see it happening. Life has taught me that people can always find a reason not to put their hands in their pockets and that they are quite happy to let others take the strain while they get on with making money but I wish Alan all the best for trying.
In principle, though, dividing forces is generally not a good idea and I don’t believe Alan’s People’s Popular Front of Judaea has much to offer over Steve’s Judean People’s Popular Front, to use a Pythonesque analogy.
Whatever aspect of financial services you work in – a bank, IFA, SJP or whatever – it is in your – our – common interest that the industry is well and fairly regulated by a regulator that understands it. Any regulator is more likely to heed the advice put forward by an organisation repres-enting all aspects of advice in a common front than it is to listen individually to those representing sectional interests.
Anyone who thinks regulation just equals the FSA is kidding himself. EU regulation will make the FSA look benign, light-touch and sensible by comparison. That is why Aifa needs more resource and why I do not believe any other organi-sation has a better chance of success.
Managing director West Riding Personal Financial Solutions