Harry Katz: Why AIFA’s hand was forced on allowing 'restricted' members

There are IFA'S and IFA'S

It seems that AIFA over the last several years have lost the plot especially regarding RDR. When we needed AIFA to grasp the nettle and put our point forward to represent the IFA nothing seemed to happen. Any discussions with the FSA seemed pointless and in the end IFA's where contacting their MP's as a last resort. I cannot think of a reason why I need to be a member of such a gentleman's club! The PFS included.

Posted by: Norman Foley

The Small IFA

"A lot of smaller IFAs perhaps do not share my views on AIFA. They may feel it does not represent their interests, but the truth is that, if AIFA did represent the interests of some advisers out there, it would never get anywhere." This sentence encapsulates the problem, AIFA only seems to represent the "big boys" and obviously the sentiment represented by this sentence is that the "small IFA" is a pest. My impression is that the big boys thought RDR would rid them of the small IFA (thereby leaving them to grow even larger) and so there has been no representation of the small IFA's views by AIFA. Had Aifa been all encompassing the small IFA may have joined and they wouldn't be in this predicament. I really don't see how AIFA can represent both sides of the fence. Just represent the whole of the IFA world and you wouldn't have a problem.

Posted by: Len Crisp

Definitions

Some of the comments appear to be equating restricted with tied. They are far from it. A restricted adviser works for his client. He limits his product range, e.g to pensions. But he still has full access to all the pensions on the markeplace that an IFA has access to. A more apporpriate title would have been 'specialist adviser', but then when did the FSA do things correctly/

Posted by: Green Eyed Monster

Forced??

Mr Katz - You state " the truth is that, if AIFA did represent the interests of some advisers out there, it would never get anywhere. And so you justify taking fees from individuals and businesses dishonestly? You claim to represent them when in fact you have no intention of doing so unless they agree with you? Let us be honest - the latest desperate attempt at self preservation by AIFA arises from the failure of AIFA to represent "some advisers out there", principally those that will no longer be paying AIFA membership fees because they are no longer in the industry. Now AIFA begins to realise that it may have shot itself in the foot and desperately seeks to increase its failing membership by including those who are the very antithesis of what AIFA should represent. Your comment above - and the move to include non IFAs in AIFA - are both illustrative of a lack of moral fibre in standing up properly for what the organisation should believe in. A matter of principle should never be subjugated by pragmatism. It should be fought whatever the cost or potential outcome

Posted by: Grosvenor

Suffer reality

I’m not sure if entering into a debate on this forum will actually achieve anything as contributors often seem to have entrenched views which are not open to any alternative. However I think it may be worth just taking a couple of posts. To Len Crisp – I defy anyone to be a smaller IFA than I am. I’m a directly regulated, unincorporated sole trader and I will be independent after 2012 as I have been since 1990 and no amount of vested interest scare mongering is going to make me restricted. However I don’t equate small with being reactionary. Change is a fact of life. I have tried hard to foresee change where possible and adapt if I can. That’s why I passed level 4 way back in 1988 and went on to level 6. That’s why I became fee charging some 15 years ago. I’m not holding myself out as anything special and I know many who are in similar circumstances. It often appears to me that many critics of AIFA are also (understandably) very vociferous critics of the Regulator. Few will concede that not everything emanating from Canary Wharf is bad. There are some things that are reasonable. I concede that there are many bad things and that often one really wonders if those at No. 25 actually sit on their brains. But if you want to have input you’ve got to be in the room. Why should the Regulator be any different from you or me? If someone wants to take an aggressive stance with me I am hardly likely to lend a sympathetic ear – don’t tell me that you would be all sweetness and light! As to Grosvenor – I can only quote Somerset-Maugham “The most useful thing about a principle is that it can always be sacrificed to expediency”. I happen to believe that AIFA is worth preserving. You need to realise that the new entity will have a collegiate structure (much as at present mortgage only advisers are represented by the AMI) so going forward we will still have an IFA arm and a Restricted Arm in addition. I’m also a member of the IFP and if you look at the movers and shakers in that organisation you will see that they a predominantly independent and although the Institute is open to a broad church the majority are IFAs – much the same goes for the PFS. The big difference is that these two rely very heavily on provider support. We at AIFA also get support from providers, but this is by no means our main source of income and whilst contrary to popular belief the funding problems that we have are not as a result of the last couple of years, but go back much further. The latest regulatory events clearly showed that doing nothing was not an option. We actually listened to our members and understood that they were not enamoured of having a preponderance of provider input – so the only place to go was the membership. It is probable that the large concerns and Networks that remain pure networks (rather than service providers) will go restricted – so the alternative would have been to increase fees to the remaining IFAs. Now even if you all loved and cherished AIFA we have to face the reality that getting money from IFAS makes getting blood from a stone look easy. So – assuming you wanted the organisation to survive – what would you suggest?

Posted by: Harry Katz

Value for money

"Now even if you all loved and cherished AIFA we have to face the reality that getting money from IFAS makes getting blood from a stone look easy" Gareth Fatchett had no problem getting enough money for a JR.That is because advisers were so angry at their treatment that they wanted to express the extent if that anger.Unlike aifa, it was worth every penny. Adviser Alliance would have no problem raising funds for a JR to challenge the whole RDR argument.

Posted by: afia

The real truth

To Harry Katz I think you need to look a lot closer to home rather than aiming purile, inaccurate and quite frankly childish comments of "tighter than a ducks backside " at the wider IFA community. As a small IFA we spend heavily of services and support which we feel add value to our clients and business. As a small IFA, I did look at joining AIFA and could identify no benefit in doing so. Equally, when our network members began to resign in numbers following another disagreement with AIFA little or nothing was done to retain the membership. So perhaps, rather than AIFA blaming the IFA for their failure perhaps AIFA should look at its own Board and ask why you failed to "sell" the benefits of membership to the wider IFA world. But then, reading your article perhaps answers that question already

Posted by: Gordon Hay

Beggars belief

Completely agree with Gordon Hay and have little to add save that Aifa's Board should be holding the executive to account, not blaming non-member IFAs for their own poor performance. This is the behaviour of cads and scoundrels. Having failed as a trade body, the now ask to be treated as a charity case by resorting to begging. Have they no shame?

Posted by: Richard

As others have saidi

AIFA has in my view failed miserably to respresent the interests of IFA's for at least a generation and only now with so many changes being forced upon us by the FSA are IFA's now beginning to find out how poorly they were represented by AIFA. It is amazing they have survived so long but like the FSA they seem to have a captive income stream mainly I suspect from providers and networks. I see little or no value in such an organisation representing IFA's and to be honest I am fed up with all suchy organisation claiming to know what is good for us and then claiming they are representing us.

Posted by: Michael Fallas