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What the industry thinks about Aifa’s restricted move

Aifa has today confirmed plans to broaden its membership criteria to include restricted advisers. Here are a selection of views from across the industry about the trade body’s radical departure from an independent-only stance.

Tenet distribution and development director Keith Richards says: “The world has moved on from the debate over multi-tied versus independent, which was created through depolarisation. The new definitions of independence are being enhanced under the RDR from the current requirements. If many of today’s IFAs were to carry on operating across the same range and in the same way as they currently do under the RDR, there is a strong chance they would become restricted advisers.

“Therefore Aifa’s decision to be more pragmatic about its own future is a wise one, especially as we might see some firms introduce a mix of independent and restricted advisers.”

SimplyBiz managing director Matthew Timmins says: “Given the obvious lack of financial support it is receiving, Aifa had no choice but to ensure it represents as many advisers as possible post-RDR.

“This move must not detract from defending and supporting the interests of the independent sector. I believe the public would rather see a robust, professional and thriving independent sector than they would a large restricted market. Independence is in the best interests of the consumer and Aifa needs to ensure unwavering support for these firms and advisers.”

Lucian Camp Consulting principal Lucian Camp says: “This will have relatively little impact on Aifa’s position with consumers and the consumer media. Most consumers are not going to make an important distinction between independent and restricted advice. If anything, the boundaries are going to be even more blurred in the post-RDR regime. For consumers, this is big news in toy town. It is not as big an issue as advisers have made it out to be in the past.”

Yellowtail Financial Planning managing director Dennis Hall says: “I feel this is the most appropriate way to go otherwise potentially you are going to have a very small membership. A lot of current IFAs in the new world are probably going to be operating on some kind of a multi-tied basis.

“If Aifa is looking at firms that would potentially choose to go restricted and operate from a wide panel, I think that makes sense. The industry needs a voice that is loud enough, and if membership is restricted only to independent advisers then it is just not going to have any clout”

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Syndaxi Chartered Financial Planners managing director Robert Reid says: “Aifa has a problem in managing its diverse membership already. To add to its diverse membership smacks of lunacy.”

Aifa council member and Norwest Consultants principal Harry Katz says: “There are plenty of small IFAs that subscribe and pay to join Aifa. But on their own I do not think they are enough to allow Aifa to survive in its current format. 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 that people recognise that Aifa has something to offer, and so they need to put their hands in their pockets. Because if they do not, all this is a waste of time.”

Fellow Aifa council member and West Riding Personal Financial 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. It is not up to the FSA to set the demarcation lines of our membership.”

Former IFA Association director general Garry Heath says: “When organisations expand their footprint they become less relevant to each sector of their membership. As I understand it Aifa is having enough trouble as it is attracting IFAs to take up membership. If the breadth of the organisation keeps expanding, it will end up representing nothing for everybody.”

Do you agree with Aifa’s resticted move? Vote here in our online poll.

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. I used to be an IFA and a founding member of AIFA and although I am now ‘restricted’, I still support the IFA cause and ethos. I am appalled at AIFA’s inaction over the years a d lack of leadership & support for it’s members and would not wish to associate with them. Great to see Gary Heath mentioned . I was also a member of the IFA association and Gary Heath was a ‘worker’ and had the interests of IFAs at his core. We need more like that and less like AIFA!

  2. Incompetent Regulators Award Team 27th July 2011 at 9:29 am

    2 points here

    1 AIFA needs to change its name to AFA
    2 What did they ever do for IFAs? Nothing. What will they do for FA? Nothing

    More beaurocrats trying to save their jobs at the expense of those who

  3. We stopped giving money to this ship of fools years ago. Total parasites.

  4. Representing only independent advisers post RDR would make AIFA elitist and would broadly duplicate the efforts of the IFP. Being pragmatic is what was called for and I believe is a realistic outcome for AIFA if it is to stand a chance of survival There are plenty of projections of who will survive past the RDR implementation date but I think the real deadline will be 31st December 2013. After this the capital adequacy requirements rise against a backdrop of 12months of CAR style income.For those firms slow to transition the only way they can survive the early years is with a cash injection and drastic cost cutting. At this point AIFA might want review its membership criteria again as survivors may be fewer than expected but is as predicted by Nick Cann of the IFP who warns of a ‘car crash’.

  5. Who or what is AIFA?

  6. Commercial reality……….they need more fees

  7. @Duncan Jones – IFAs are the elite of financial services advisers. AIFA is there to represent that elite. There is nothing wrong with being elitist per se. Pragmatism is the escape route of the cowardly. Why should AIFA survive if it stops BEING AIFA?

  8. William “Willie” Sutton bank robber was asked why he robbed banks, he said “because that’s where the money is.”

    What has really happened is that Aifa has attempted to broaden its fee base having lost the the confidence of the independent sector. Having misrepresented the IFA it can now go on to misrepresent a far wider sector and in return charge for it!

  9. Absolutely right Grosvenor and Simon Mansell, totally agree with you. Aifa is effectively managing the decline of our industry – this is all it can do. Why a minority of IFAs pay them to do this defeats me.

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