Wednesday, 27 July 2011 14:15

We need a new professional body!

Written by  John Bloomfield
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jacket1touchedI have been pondering this for a few days now since attending a seminar recently on business development post RDR, and today's announcement that AIFA (association of independent financial advisers) is to drop the independent part and welcome all non-bank advisers to their ranks has brought me to the point that I decided to articulate my view here.

We have taken our eyes off the ball!

Over the last few years I think the "independent sector" within UK financial services has really forgotten about what is arguably the most important part of our business - client acquisition!

Through our professional bodies and associations and in many cases even as individual advisers we have laboured over the regulators RDR proposals trying to argue every point that we thought mattered to try and minimise the damage that we felt the proposals would cause. While we have been doing this nobody has been promoting the benefits and value of independent advice to the most important people in this whole process - the consumer. And the result of RDR for most advisers in the trenches of the independent sector is that when 2013 gets here they are going to have to try and sell to clients an independent service that they neither understand nor value.

I think this is a real tragedy and one that we the "independent sector" may live to regret.

Going it alone...

Most IFAs that I know personally are not large business' but rather small practices with either one or a small handful of advisers. While many have been trying to prepare their clients for the changes none have the resources necessary to promote the "independent sector" to the wider public. When RDR hits we wont have the budgets necessary to start trying to counter the undoubtedly massive budgets the banking sector will be putting in to action to educate the public on what they have available for free. IFA firms wont even be allowed to accept marketing support from providers in the brave new world so currently tight budgets will become ever tighter.

I fear that we may have won a few battles along the way to RDR through our industry bodies but the final battle for the end consumer may be one that we haven't even thought about.

A new body is needed

The current professional bodies I feel are neither up to the task nor equipped to promote the independent sector.

The PFS serves a purpose in it's promotion of educational standards and ethics.

AIFA or AFA as it is about to become has done a much better job than I think most people give them credit for in expressing the concerns of the "independent sector" to the regulator but they have done nothing that I can see to promote the benefits and value of independent advice to the public at large. And now that they have removed the "independent" from their mandate I will not be renewing my membership, I do not want my only differentiator to be that I do not work for a bank! I am independent and proud of it.

We need a new body I feel that can promote the benefits of the "independent sector" to the public at large so that when 2013 arrives it won't be such an uphill struggle to convey the benefits to clients, and prospects alike.

I know that some out there will point to "unbiased" as the people that most promote the industry and this is probably true, but they are not an industry body but rather a profit led company their promotion of the sector is generally a means of promoting their own business. And I am not knocking that all support for the sector is valued and welcomed but they alone will not fix our woes.

In my view we need a new industry body that is;

  • non-profit
  • led by IFAs
  • tasked with simply promoting the benefits and value of independent advice to the end consumer

I think we would all need to subscribe to provide a budget but I think if set up correctly a non-profit organisation like this would be allowed to accept donations from providers towards it's marketing efforts something individual practices will not be allowed to do.

Can it happen?

I have no idea! - what do you think?

Use the comments section below to air your views, whether you think I am right or wrong I would love to read your view.

Last modified on Wednesday, 27 July 2011 17:24
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John Bloomfield

John Bloomfield

John Bloomfield is an Independent Mortgage & Financial Adviser, and founder of both Sesame Forums and Adviser Forums

Website: www.pwfs.co.uk/adviser-profiles/john-bloomfield

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12 comments

  • Comment Link Chris Clare Thursday, 04 August 2011 07:54 posted by Chris Clare

    You have a very valid point here John.

    I think that any body has to purely consist of IFA's full stop. All the other institutions have representatives from life companies and banks, and if that is not a conflict of interest nothing is.

    IFA's have wondered why none of the big trade bodies really gets anywhere in helping them. All they have to do is look at their composition and the answer is clear.

    So a body which is only made up of IFAs and a regularly changing board so people do not get the opportunity to feather their nest and you could have something worth something.

    IMHO

  • Comment Link John Bloomfield Friday, 29 July 2011 09:10 posted by John Bloomfield

    I think you are right Steve, IFAs have to realise it's just as important that "independence" is promoted to the public as it is to fight the regulators because ultimately it's where the public choose to do business that determines who the winners are.

  • Comment Link Steve Lockett Friday, 29 July 2011 09:07 posted by Steve Lockett

    I have been saying for a long time that the banks are trying to put IFAs out of business. They are so powerful that they can do this. Murdoch had too much power: nothing compared to the banks. Every body seems to forget that our country/world is in a terrible state because of the banks. Yet : they have not/will not be taken to task...WHY ?; because it is a conflict of interest (half the FSA are ex bankers) The banks are too powerful. I agree that we need a new body and would be willing to pay. My fear is that the banks would still crush us. We need to stand up and be counted . Unfortunately most IFAs have not got the nerve or the finances for the fight. The banks and insurance companies are the only ones to profir from RDR....the charges related to fund value will increase their profits...and ...you watch the chargesd go up after RDR.

  • Comment Link GARY BROOKS Wednesday, 27 July 2011 20:47 posted by GARY BROOKS

    AGREED WHOLEHEARTEDLY
    In my view we need a new industry body that is;

    non-profit
    led by IFAs
    tasked with simply promoting the benefits and value of independent advice to the end consumer

  • Comment Link John Bloomfield Wednesday, 27 July 2011 18:30 posted by John Bloomfield

    Red=RDR

  • Comment Link John Bloomfield Wednesday, 27 July 2011 18:01 posted by John Bloomfield

    @Ian chuckle at you equating taxi driving with suicide. But seriously I doubt the above will happen who has the time to take on yet another thing on top of prepping their own business for RED

  • Comment Link IAN SIMPSON Wednesday, 27 July 2011 17:53 posted by IAN SIMPSON

    I AGREE TOTALLY, HOWEVER, AFTER 24 YEARS MY FIGHT HAS ALMOST GONE.
    I HOPE I AM WRONG BUT I HAVE NO VOICE, NO POWER AND UNDER VALUED. IS THIS JUST ANOTHER OCCASION WHERE WE WILL BRIEFLY MOAN AND SULK DO NOTHING AND LOOSE MONEY AND KEEP TELLING OURSELVES IT WILL PICK UP AND GET BETTER.
    I HAVE REALISED THAT AS FAR AS OUR INDUSTRY IS CONCERNED IT NEVER DOES GET BETTER.
    APART FROM SUICIDE OR TAXI DRIVING DOES ANYONE HAVE ANY SUGGESTIONS.

  • Comment Link David Tickett Wednesday, 27 July 2011 16:42 posted by David Tickett

    I completely agree with your comments particularly:

    "AIFA or AFA as it is about to become has done a much better job than I think most people give them credit for in expressing the concerns of the "independent sector" to the regulator but they have done nothing that I can see to promote the benefits and value of independent advice to the public at large. And now that they have removed the "independent" from their mandate I will not be renewing my membership, I do not want my only differentiator to be that I do not work for a bank! I am independent and proud of it."

  • Comment Link Derek Wodd Wednesday, 27 July 2011 16:28 posted by Derek Wodd

    The recent rebuttale of the Treasury Select Committee findings by the FSA only shows that they are too embarrassed to admit they have got it wrong.After lobbying MPs and a lot of time spent sending supporting evidence of the reason why the general public will be the losers it seems that the ship cannot be turned. The normal man in the street is blissfully unaware of what he is about to lose.

  • Comment Link John Bloomfield Wednesday, 27 July 2011 16:11 posted by John Bloomfield

    @alan crowley - my point is not lobbying but promotion of the value of indepependent advice to the public.

    the wealthy may be able to afford it but if they don't understand and value independent advice they will not want it!

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