The financial services industry has fascinated me for more than 30 years – and it continues to do so. It is why I have made a career out of financial journalism, and it is why I will probably die with a pen clutched in my right hand and a skinny latte in my left. I know nothing else. I am a one-trick pony.
It fascinates me because it is ever-changing – a result of innovation and continued government intervention. And also because it affects all our lives – often for the better, but not always.
Reporting on personal finance issues is never dull, as I am sure financial planning is never routine. Every day brings something new to the personal finance party. Frustration followed by joy.
The current rapid change in the financial landscape – now, more at the speed of a Bluebird than a Boris Bike – probably explains why we are seeing a reconfiguration of some of the trade bodies that represent key players in the financial services map. Like advisers, product providers and money journalists, they are having to adapt to the shifting financial sands.
So, goodbye Investment Association director general Daniel Godfrey. Farewell, the National Association of Pension Funds, and a warm welcome to NAPF mark two, the Pensions and Lifetime Savings Association.
And, of course, goodbye to an independent Institute of Financial Planning that for many years was run with great enthusiasm and vigour by Nick Cann – until ill health unfortunately got in his way and that of the institute’s progress.
As is the way of the personal finance world, some of this restructuring is for the better, some of it questionable.
Although I was not privy to what went on at the London headquarters of the IA, from the outside, Mr Godfrey seemed to be a force for consumer good.
He certainly wanted the investment funds industry to be more consumer-focused and adhere to the association’s stated objectives: “to make investment better for clients, companies and the economy so that everyone prospers”. Greater transparency on charges was his passion, a quest that ultimately led to his downfall.
Yet under his reign, it must be said that the IA lost ground to the Association of Investment Companies on many fronts. Its public relations can at best be described as poor compared with that of the AIC, which has never been backward in coming forward when promoting the virtues of investment trusts.
“Under Daniel Godfrey’s reign, the IA lost ground to the Association of Investment Companies”As regular as clockwork, I get a press release from the AIC espousing the views of trust managers on a particular issue – be it the prospects for UK dividends or the outlook for UK smaller companies. Some money journalist somewhere seizes on the information to write a related article. Result? More publicity for investment trusts.
The AIC also continues to help advisers understand investment trusts and their peculiarities – gearing, discounts, premiums. As a result more advisers are recommending them to clients.
But what of the IA? Silence most of the time, apart from its blandly written press releases on the latest fund statistics.
Maybe it is time for the AIC to merge with the IA to form the CFA (Collective Funds Association); one voice representing collective investments. After all, most asset managers have a foot in both the investment fund and investment trust camps.
As far as financial advisers are concerned, the most notable trade association change is the impending ‘merger’ of the IFP and Cisi.
‘Merger’ is a much misused term in financial circles. In the wake of the 2008 financial crisis, building societies often talked about mergers when in fact much of the industry’s rationalisation took the form of the takeover of a weaker mutual by a larger concern.
Nationwide did not merge with Derbyshire, while Yorkshire did not conjoin with Chelsea. The larger bodies took over their lesser rivals because the Chelsea and the Derbyshire (especially) could not carry on as independent concerns any longer.
Although the IFP is financially robust, unlike Derbyshire was – a fact made clear in the questions and answers about the merger on the IFP website – let us sidestep all the spin for the moment. The IFP is not being merged with but consumed by Cisi. And I would hazard a guess that by the time I am pushing up daisies the IFP will have disappeared altogether as a brand.
Provided they pass an online test (the ‘integrity matters’ ethics module, no less), the 2,100 existing members of the IFP will, once the merger is announced, be able to call themselves by a new Cisi title.
Certified financial planners, for example, will be able to put ‘chartered wealth manager’ on their business cards if they sail through the exam. If I were a financial planner I would jump at the chance to have ‘chartered’ rather than ‘certified’ in my job description. More masterly, more professional.
Of course, I understand the arguments for the takeover of the IFP, such as strength in numbers. One big association is better than two smaller ones. With 35,000 members under one umbrella, the combined body will be a real match for the Personal Finance Society, which has 4,789 chartered members as at 15 August.
And it is reassuring that the annual IFP shindig (conference) will survive for the time being. It is always fun and informative.
Yet the IFP’s passing cannot do the financial planning cause any long-term good. One of the most original ideas that Nick Cann brought to the IFP table was Financial Planning Week. It provided a platform for financial planners to demonstrate their value before a cynical audience. It worked.
Sadly, there is no mention in the relevant ‘Q and A’ that it will continue under Cisi’s wing. One step forward, two steps back.
Jeff Prestridge is personal finance editor of the Mail on Sunday