Adviser trade body the Association of Professional Financial Advisers has denied that its latest high profile defector and the launch of a rival trade body represent significant challenges for its future.
This morning (20 May), Openwork announced that it is relinquishing its membership of the trade association, having joined in 2013 after it expanded membership criteria to include restricted advisers.
Openwork chief executive Mark Duckworth will step down from the Apfa board. He said in a statement that as Openwork offers both restricted and independent advice through an AR model, it differs from other advice businesses in direct engagement with the regulator and policymakers.
“Having reviewed our position in this respect, we have concluded that we no longer require trade body representation and have accordingly resigned our membership of Apfa,” he added.
Sesame’s exit from the retail advice market also has the potential to hit Apfa’s network membership further. As with many networks, Sesame members are automatically opted in to be members of the trade body.
One former council member previously told FTAdviser sister title Financial Adviser that the swaths of members saying they will go directly authorised represents the “most serious threat” to its existence since it was formed.
There is also the threat from rival trade body Libertatem, which was formally launched last week by Garry Heath, former director-general of Apfa’s forerunner the Association of Independent Financial Advisers.
According to Libertatem chair and Conservative peer Lord Flight, there should not necessarily be a clash with Apfa. He claimed that Apfa only represents 100 directly authorised IFA members, a fact which many will say leaves it exposed to network exits.
Mr Heath was more pointed, commenting that “there is a dependency on networks at Apfa, which may be a problem as there will be less and less of them in years to come”.
Speaking to FTAdviser, Apfa’s director general Chris Hannant said that while he was disappointed at the move by Openwork, they would remain in contact with the hope of the network rejoining in the future.
He explained that they have made contingency plans for the future, but denied that there was any wider trend for members leaving. Mr Hannant also noted in relation to Sesame that members of Bankhall would remain members, as would those moving to preferred partner Intrinsic.
A spokesperson for Sesame stated: “We have, of course, been in discussions with Apfa to ensure that our group continues to support the important work undertaken by our trade body on behalf of our profession.
“Our support for Apfa will continue this year through Sesame and ongoing through Bankhall, a leading supplier of professional support services to firms that are directly authorised by the FCA.”
In relation to the new trade body, Mr Hannant commented: “There have been lots of rival trade associations launching and folding in the 16 years we’ve been going.”
Mr Hannant added by stating that the make up of the industry was still split between roughly 13,000 appointed representatives compared with just 5,000 directly authorised advisers, so its membership is still representative, with most major networks being signed up.
“I think they [Libertatem] will face an uphill struggle to get sufficient membership, we seek to represent the whole of the sector and I think it damages the industry if there is a fragmentation of the message.”
In late 2013, IFA Centre, another trade body founded by Gill Cardy to bang the drum for independent advice in a market that was diverging, closed despite seemingly being popular among many of those it sought to represent.
peter.walker@ft.com
