Where (and who) next for AIFA?

Cash poor, unpopular and without a director-general, AIFA members are beginning to call for radical measures to rescue the organisation.

If the Association of IFAs (AIFA) ever believed the run-up to RDR represented an opportunity to re-position itself as the proactive representative body for independent advisers, the exit earlier this month of director-general Stephen Gay was a sobering reminder of the challenges it faces.

A job offer from the Association of British Insurers (ABI) was simply too good to turn down, Gay said, barely 14 months since joining AIFA from Aviva.

So where does all this leave the trade body?

Gay’s departure leaves AIFA tottering “like a house of cards”, according to Paul Stanfield, chief executive of the Federation of European of IFAs (FEIFA), which has lobbied with AIFA in the past.

The metaphor is an apt one, as AIFA board member Harry Katz suggested: “Without Stephen, I doubt we would still be here today.”

Part of the problem for AIFA is its rigid hierarchical structure, said Alan Lakey, the founder of Adviser Alliance who was offered a board position under former director-general Chris Cummings. “Joining AIFA would have stopped me saying what I wanted to say,” he said.

Indeed, while most of the talk has been on finding a successor to Gay, a more unusual idea is catching on – that AIFA may not replace him at all.

This is down to plans by AIFA to establish “a collegiate approach”, with one division of the body representing independent advisers, and the other ‘restricted’ practitioners.

The feeling is that, with the organisation representing two factions of the industry, how can it have a single leader astride both?

It may be possible for new policy director Chris Hannant to effectively power-share with director Robert Sinclair– already heavily fancied for the top job – but the future remains unclear.

Whichever structure is put in place, AIFA faces one challenge above all others: breaking even. The trade body recorded a deficit of about £200,000 last year, leading to questions about its long-term viability.

Opting not to replace Gay would help, but it seems inevitable that AIFA will have to go, in Lakey’s words, “cap in hand” to the big product providers.

“We all live in the real world, and you can do absolutely nothing unless you get the funding,” said Harry Katz. “Independent and restricted advisers have one thing in common – they’re tight. If you’re going to survive you have to look at the providers. We don’t hide the fact that Aviva sponsor us.” Networks are currently offered a generous membership discount, but charging them more is a non-starter: “There’s no way they would stand for it,” Katz argued.

Whether Gay is replaced of not, his successor needs to be committed to the job above all, Stanfield said. Wanting to join the ABI is no bad thing in itself – but more instability could be fatal.