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The reality is that IFAs won’t dig deep in their pockets

THE EDITOR’S COMMENT OF THE WEEK

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.

Neil Liversidge
Managing director West Riding Personal Financial Solutions

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Pete Whitehead 1st June 2011 at 12:32 pm

    Why would any sane human being dig deep into his or her pocket to give money to an organisation that is willing to act against its members’ interests when it wants to – and as Aifa has done?

    That’s why people don’t want to join. Hardly rocket science is it?

  2. There is much in what Neil says. Adviser apathy is as much responsible for the historic inability to oppose bad regulation as consumer is for endemic under-insurance and unfocused retirement planning.

    Adviser Alliance is a body that focuses on specific issues as opposed to a broad-brush approach. In so doing we can operate with a far lower budget and still achieve beneficial outcomes.

    Of course, the more advisers who join with us the more we are able to achieve.

  3. Agree entirely with Pete.
    Already subscribe to Adviser Alliance and will gladly pay £500.00 PA for an organisation which represents it’s members.
    AIFA shot itself in the foot over grandfathering or the lack of it to be precise and now wants to blame everyone/thing except it’s own stupidity.

  4. Bang on Anonymous – Aifa is blaming everyone and everything and is unable to accept responsibility for its lamentable failings. Ergo, they are not fit for purpose. My disappointment, to be honest, is with its Council for falling for every sob story going and not holding the Executive to proper account.

    If the job’s ‘hard’ (aahh, bless) then hire people who are equal to the task – if this is also ‘hard’ then think about why you cannot attract and hold on to talent. Other trade bodies also have a hard job to do but we don’t have to put up with them bleating in the trade press about how beastly everyone is to them.

    If I read one more quotation from Aifa saying they are ‘concerned’ about a proposal, a consultation or anything else for that matter, I think I will scream. Do they seriously think its good enough to sit around being ‘concerned’ when the industry is being attacked without mercy? Do they then seriously wonder why members have left in droves?

    As for whinging about lack of funds being responsible for their failure to deliver, doesn’t it remind you of FSA’s excuse after the banking collapse – they went on a recruitment spree and hired loads of new Supervisors despite the fact that they had all the information that was needed to hand before the collapse – they just failed to act on it. Lack of supervisors was an excuse and the recruitment spree was displacement activity engaged in to cover up their embarrassment. No, sorry I’ll take that back, FSA is unembarrassable, but you get my drift.

    IMHO Aifa has brought the IFA profession into disrepute and is now, at its own admittance, propped up by the various banks and providers who are their ‘associate’ members,

    To be honest Aifa you are a spent force – go ahead and do as you want with the banks’ and providers’ money, just don’t claim to be representing IFAs when you do it.

  5. I have been happy to pay more than one representative body at the sametime and would be happy to continue to do so if I felt that the issues important to me were being pursued. It does not need more than one body to do the work if all agree an issue is right.
    If AIFA want to currey favour with politicians, fine, tell them when you think they are wrong and make your position clear and move on and leave it to people like Adviser Alliance to fight those battles, but AIFA as a broad church does need to be clearer about what both current members and returner members might want and what RDR may mean for them as well as FAs

  6. Exasperated me 21st June 2011 at 5:06 pm

    I don’t know how some of them manage to put food on the table what with the increasing cost of staying in business and the downward pressure on margins.

    Oh, and the amount of time spent writing letters and posting on blogs….

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