Power to the people: Rise of the IFA liberation front

Disillusioned with trade and professional bodies, advisers are rediscovering the power of the strongly-worded letter...

The financial crisis was caused by a powerful concurrence of factors. But conditions converging in its wake are causing something altogether more positive for the advice industry.

Tired of being bullied by the regulator, and lacking faith in the Association of Independent Financial Advisers (AIFA) and their professional bodies, IFAs are increasingly taking it upon themselves to be heard.

Perfect conditions

A close relationship with retail investors, the seemingly never-ending fallout from the financial crisis and a new government have combined to provide the perfect conditions to prick up MPs’ ears to advisers’ concerns. Instead of putting all their eggs in AIFA’s lobbying basket, IFAs are rediscovering the power of the strongly-worded letter – and it’s working.

In the last 12 months, financial advisers have directly instigated, or significantly helped secure, a debate on the RDR in the House of Commons; an Arch Cru hearing in Parliament; investor success in recovering payment protection insurance from the banks; and a Treasury Select Committee inquiry into the RDR.

IFAs have most success getting MPs to listen when advisers’ interests are aligned with consumers. It makes sense on two levels; firstly the majority of MPs’ constituents (and Daily Mail readers) are consumers, not advisers, and MPs are always keen to secure broad base support; and second, advisers’ interests should be aligned with those of their clients, for the client’s sake, their own sake and the sake of the industry.

What about AIFA?

Is this the power of the adviser community organically working towards common goals, without the need for a specific ‘leader’? If so, what does that mean for AIFA or any other trade organisation looking to represent IFAs?

For Neil Liversidge, managing director at West Riding Personal Financial Solutions, IFAs working individually but toward the same goal cannot replace the focused point of contact provided by AIFA.

“IFAs can be effective and should not therefore be defeatist about the challenges they face. But it by no means negates the need for AIFA,” he said.

“AIFA does the in-depth and intensive day-to-day lobbying that no IFA has the time or resources to do. Also AIFA can open doors for the IFA community that nobody else can open. Hector Sants would not sit down with most IFAs acting solely on their own account but he would – and does – with AIFA representatives. The same goes for government departments.”