Trade bodies across the financial services sector appear to be in turmoil due to recent reforms.
There is a malaise among some life offices about their relationship with the ABI that is charged with lobbying on their behalf.
Last month, Aegon UK left the 230-strong ABI to lobby on its own, just a year after L&G made the same decision to go solo.
Meanwhile, the Association of Professional Financial Advisers has lost the 1,000-member network Openwork again because the company sought to put its case to the government and regulators on its own rather than as part of a trade body.
Apfa has also found itself challenged by a new body called Libertatem, which was set up by Garry Heath to put forward the case for independent advisers.
Perhaps the most recent and dramatic development has been the ousting of Investment Association chief executive Daniel Godfrey, who left the 200-member body after several asset management companies said they would be leaving, reportedly because they were concerned about the IA’s “progressive” approach.
Earlier in 2015, only 25 of its members signed up to a statement of principles addressing issues such as transparency of costs and corporate culture, but the IA has since recommitted itself to its work around transparency.
Following rumours about Schroders, M&G, Fidelity, Invesco Perpetual and Aberdeen looking to leave the IA, Mr Godfrey, who declined to comment, left the trade body following a meeting of its board. It is understood that at least one member of the IA board was out of the country at the time of the meeting. In total the five companies have £167bn in retail and institutional funds under management.
Announcing a member consultation on the IA’s priorities, chairman Helena Morrissey admitted that some companies had voiced concerns about “ the scope of the association’s agenda”.
Meanwhile, the ABI’s lease on its Gresham Street headquarters could run out in 2016, according to official documents. A spokesman for the trade body said: “The lease on our building comes up next year and we are in the process of identifying the most appropriate premises for the ABI after that date.”
The ABI and the IA were asked to comment on whether trade bodies are facing an industry-wide challenge, but both declined to do so.
Chris Hannant, director general of Apfa, said: “I cannot speak about the ABI and the IA, but as a trade association we are in a constant process of people joining and leaving. It happens with mergers, acquisitions and people entering and leaving the industry.
“More generally, there is an awful lot going on at the moment, including pension freedoms, and individual firms may feel they want to have their own say. But I would say that they should do it in tandem with a trade association because if I was someone at the Treasury or the FCA I would need to have 15 or 20 meetings to take the temperature of one industry, so that won’t be effective.”
Perhaps Mr Hannant’s reasoning is backed up by the fact that the recent turmoil has been contained to trade bodies that operate in pensions and investments.
Also in the adviser space, the 2,100-member Institute of Financial Planning has merged with Cisi, but it explained that this was driven by the IFP board’s desire to see accelerated growth and increased momentum for the financial planning profession in the UK.
Neither the 132-member Council of Mortgage Lenders, the 200-member British Bankers Association or the 47-member Building Societies Association have found themselves in the headlines over their membership.
However, former Ofcom chief executive Ed Richards is leading a review to rationalise the plethora of bodies that lobby on behalf of banks. Mr Richards is now considering responses to a consultation that closed last month.
Michael Mainelli, chairman of think-tank Z/Yen said some of the discontent might have something to do with the fact trade bodies have not been actively involved in some of the reforms since the financial crisis.
Mr Mainelli said: “It is very difficult to identify any initiative that has come from a trade body. It is dispiriting to see the dearth of new ideas from people who say the industry should be left alone.
“The only instance that comes to mind of a trade body showing some guts has been where the actuaries looked at discount rates, even if they did come to the conclusion that no action was needed.”
Adviser view
David Wilson, an adviser with Newcastle-based NE Money, said: “I think one of the frustrations from an adviser’s perspective is that the trade bodies are supposed to be the voice of the adviser, but it still doesn’t feel as if you are being heard.”
Timeline
• March 2014 - Chancellor George Osborne shocks the industry with his announcement of the pension reforms
• August 2014 – L&G leaves the ABI
• April 2015 – Pension reforms take effect
• May 2015 – Openwork leaves Apfa as rival body, Libertatem, is launched
• August 2015 – Only 25 of the Investment Association’s 200 members sign a statement of principles supporting, among other things, transparency over costs and clear communication
• September 2015 – Aegon UK leaves the ABI
• October 5, 2015 – Reports surface that M&G and Schroders have told the IA they will leave in the new year
• October 6, 2015 – Pressure grows on IA chief executive Daniel Godfrey as more members are reported to be considering their position, prompting his resignation that evening
