Aifa council member Harry Katz says the trade body had no option but to broaden its membership criteria as its current structure is no longer financially sustainable.
Katz, principal at Norwest Consultants, says Aifa needs resources to lobby. He says: “There are plenty of small IFAs that subscribe to Aifa but I do not think they are enough to allow Aifa to survive in its current format.”
He says the decision to allow restricted, but not single-tied, advisers to join is the compromise that takes into account the changing regulatory environment. Katz says: “I do not like this as an ideal solution but we have got to be pragmatic. If I could think of a better route to where we need to go, I would have suggested it. Sometimes, if you do not have an alternative, you have to just swallow the cod liver oil.
“The important thing is people recognise Aifa has something to offer and they need to put their hands in their pockets because if they do not, this is a waste of time.”
Fellow Aifa council member and West Riding Personal Fiancial Solutions managing director Neil Liversidge says: “If we were to work to the FSA’s definition of independence, we would be letting the regulator decide who can be an Aifa member. We have come up with a more realistic definition of our own.”