Last week’s revelation in Money Marketing that plans are afoot to set up a new industry trade body representing all forms of adviser has sparked debate about whether such an organisation is needed.
Thinc Group chief executive Simon Chamberlain says he has been approached by a number of senior industry figures in recent weeks who are drawing up plans to launch the organisation as early as summer.
Chamberlain says initial funding for the venture would not be a problem and suggests there is a genuine gap in the market for a trade body that represents all forms of adviser, including single-tied, multi-ties, whole of market and IFAs.
Of course, Chamberlain has had a major gripe with Aifa since it voted not to allow multi-tied advisers into its membership in the aftermath of depolarisation.
Aifa members voted instead to retain the membership for IFAs and have a sub-group for whole of market advisers while excluding multi-tie advisers.
Chamberlain insists it is time for a trade body which represents all advisers, especially with the advice landscape looking like it is about to change dramatically, and says the resources and willpower are in place to make it work.
Aifa does not appear too worried by the plans and rightly points to the enormous amount of work that director general Chris Cummings and the rest of the team do in representing the professional advice community to the FSA, the Treasury and in Brussels.
Aifa is represented on all five of the groups that make up the retail distribution review and has a strong track record since Cummings took over in fighting the adviser corner on vital issues such as the Financial Services Compensation Scheme funding and unfairness with the payment menu.
Chartered Insurance Institute director general Sandy Scott says: “As the leading professional body, the CII fully supports the work of the industry’s leading trade bodies such as the ABI, Aifa and Biba”.
He says at such a vital time for the industry, a new body of the type envisaged by Chamberlain would mean a lack of unity for the voice of the sector.
Scott, who is chairing the professionalism and reputation committee, says he has been impressed so far with Aifa’s contribution to the group and points out that the trade body’s hard work benefits all the advice sector, not just its members.
Former Origen chief executive Gareth Marr says he can understand why certain forces in the industry would be pushing for a new trade body to be formed but it could be dangerous to split the adviser representation with regulatory and Governmental bodies at such an important time.
Former Millfield chief executive Paul Tebbutt says the fact that we are about to see the advice sector shaken up radically by the retail distribution review means now is the time for a trade body representing all advisers.
Tebbutt says: “These are very interesting proposals. With the complex nature of the market and so many different types of advisers and different types of very specialist adviser, it would make sense to have a single body representing everyone.”
Tebbutt says the blurring of the distinctions between the current brands of adviser creates a complexity that confuses both politicians and the public and a single group representing all advisers can help get a simple, coherent message across.
However, IFA Promotion chief executive David Elms says there would be a real potential for such a group to do the opposite and further confuse the adviser landscape in the eyes of the consumer.
He says IFAs have an incredibly strong brand in the market and a new trade body would risk diluting this brand. He admits the adviser landscape is confusing but says this is only the case if you are seeking anything other than an IFA.
Elms says: “The problem with this proposal is that I cannot see any reason why an IFA would want to be part of this group. The greatest selling point of an IFA is the differentiation between them and the rest of the market which would be lessened by such a move.”
He says different types of IFAs may want the trade body to campaign on different issues and it runs the risk of in-fighting or striving to represent everyone but not really standing for anyone.
Highclere Financial Services partner Alan Lakey says there is too much difference between the ranges of advice that the new body would seek to represent to make it practical or successful.
Lakey says : “There is obviously a strong agenda from many people in the industry to lump all advisers in together which would be helped along under these plans but there is a massive difference between an IFA, a multi-tie and a single-tie adviser.”
Consensus seems to suggest that Aifa has little to be worried about such a body as it difficult to see why its members would jump ship or have sympathies with a group that dilutes their brand. Therefore, you have to question where the group would get members.
But according to some advisers, such as Syndaxi Financial Planning managing director Robert Reid, there could be a gap in the market for somebody to represent fee-based financial planners.
Reid, who recently quit Aifa as he was disillusioned by its stance on the retail distribution review, says the specific needs of the financial planners are not being properly catered for by current trade bodies.
Marr says if there is any gap in the market, it would be in this area rather than an all-encompassing trade body across the industry but suggests any talk of new bodies should wait until after the retail distribution review, when a clearer picture of the future of the sector should develop.