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The year of educating IFA

Peter Sprung, director of
six-person IFA Citadel Financial Services,

taking over as
president of the Life Insurance Association from

Steve Horswell from May 4.

In an interview with Tracey Boles, he sets out his aims for his year in

office and explains the LIA&#39s controversial submission
on polarisation

What will you be tackling in your presidential year?

The biggest issue that faces the financial adviser today is education. We

know consumers and the Government want it. But there are no systems or

educational structures in place.

We want to take advisers from the benchmark up to Advanced FPC and beyond

and we will put the means in to do this. We want to have educational

centres throughout the UK so that any adviser will not have to travel more

than 50 miles to get expert tuition from professionally qualified tutors.

We have set the wheels in motion. We are applying to the European social

fund for 1m, which will meet 45 per cent of student costs. As an

association, we will be seeking sponsorship from product providers. We

expect to run at least 34 different centres but it depends on supply and


Our educational prog^_ramme, the
Pinnacle programme, will be launched

in May. It will be the embryonic version of a national system. We are going

to ask members if they aspire to studying for an exam, which is free to

them, and hope to get 5,000 on board but it will not be prescriptive. A

straw poll of our members showed that 25 per cent are interested –

equivalent to 6,500.

Why is education key?

Education should address two
issues – consumer protection, which is

foremost in our minds, and advi-ser competence.

The LIA mission statement is to increase the competence, standing and

success of all members. Consumer confidence has been adversely affected by

the national press who publicise the 2 per cent of bad cases.

If we can promote the educational side and put our own house in order,

then consumer confidence will follow and remove the need for prescriptive

exams. That is the issue for this year. All other issues have been battered

to death. There is no real future in constantly revisiting them.

How are you preparing
for stakeholder?

Our major concern is soc^_ial exclusion in the low-charge regime. If there

is no provision for advice in the 1 per cent charge, the likelihood is that

people who cannot afford it, will not get any.

The first thing IFAs will have to decide is whether to take part. If they

do then stakeholder cannot be implemented without advice. Caring employers

may be willing to pay a one-off fee and annual retainers for advice. But it

may be difficult to get some employers to pay for advice and others might

stamp it on their employees. We fear for consumers as we want them

benefit from quality advice.

If IFAs do partake, we will take up the issue of advice with the FSA of

whether stakeholder will be sold by direct offer or with the full advisory

process undertaken.

We think advisers should decide any fee on stakeholder. But there may not

be enough of them to implement systems by the deadline of October 2001

which could drive up costs. Supply and demand could apply again. Therefore

the 1 per cent charge could inadvert^_ently create higher charges.

What else are you lobbying for?

Polarisation, charges for complaints, compensation schemes and

vidual licensing.

Can you outline the LIA&#39s
stance on polarisation?

Polarisation has with us for 10 years and has served its purpose. The

public recognise the difference between inde^_pendence and tied agents. We

favour maintaining polarisation but want to bring an issue into the

debate. Where an insurer does not have a product it can enter into a

contract to sell anther companies. This is white labelling. It happens now,

it always has done and we believe it should do in future.

Are members still leaving as
a result of your submission

polarisation to the FSA?

Yes, one or two.

Is there room for more
than one association?

Aifa represents corporate bodies while we represent individuals. We

comp^_lement each other. We deal more with education. In the long term, the

objective of all organisations must be to have one association

rep^_resenting all advisers. We have been having a lot of discussions. Our

door is always open.

Is there a conflict in having both tied and independent members?

You can never be all things to all
people. Some decisions make people

unhappy. One should not gain at the expense of the other.


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