With the Investment Association (IA) accused by some of its members of acting more like a regulator than a trade body, and wealth management firm St James’s Place having announced it is quitting all of its trade body memberships citing a lack of value for money, financial services associations are coming under increasing pressure.
Add to that impending changes to regulation such as the incoming Markets in Financial Instruments Directive (Mifid II) legislation, and Liz Field, chief executive of the Wealth Management Association (WMA), has a busy year ahead.
Ms Field took on the role at the WMA in 2014 having run trade bodies for around 16 years previously. Her reasons for doing so are certainly worthy: “There’s somebody’s money at the end of all of this that’s being managed.”
She explains: “It’s a very responsible job our members do, which is to safeguard and provide responsible stewardship of individuals’ assets. That’s a pretty tall order and at the end of it is the individual.
“The majority of our members are small- to medium-sized organisations and as such they have a unique challenge because they don’t have resources in abundance. It’s a personal service that they provide to individuals. It’s all based on trust and I thought that needed campaigning for.”
Ms Field admits the association’s members are “pretty broad”, from wealth divisions of private and high street banks, full service wealth managers such as Brewin Dolphin and Rathbones, to discretionary fund managers and regional brokers, and even some platforms.
“The fact that we’ve got wealth managers that might be in banks or sit in a different kind of organisation is neither here nor there. We look after the wealth management space. They will be touched by the same stuff just as much as an organisation that calls itself a wealth manager,” she notes.
The WMA has historically had a good relationship with its members, as Ms Field attests: “We’ve always been highly regarded by our members and that was reiterated to me when I first joined.” In her early days at the association, Ms Field recalls members told her they valued the trade body’s work and insight, but simply wanted more of it.
She says: “We do a lot of analysis and provide a lot of insight and information, which then goes out to our firms either through the members-only bit of the website, or through monthly updates. If it’s something urgent it’s an email that goes out from me. We also do lots of face-to-face work, whether that’s committees, seminars or regional roadshows.
“The key thing for me that was missing was that we didn’t have a research function as we need to have all of the facts and figures about the industry at our fingertips. We’ve established a research function that will work in collaboration with other key partners and other trade associations, but will also be an aggregator of information that’s out there so it’s all in one place. That in the main is where the changes have been.”
She adds: “It’s been about recutting what we do and just thinking with a different lens, which will always happen when you get a new person coming in anyway.”
There have also been some internal changes, with Ms Field appointing a new head of events and a communications assistant, as well as hiring two more policy specialists to beef up what is a fairly small organisation.
She believes it is important the WMA fulfils its obligations to its members rather than dictating to them how to operate. “As a trade association you have to do what the members want. So if the members say we need some help and guidance on this, then that’s what we will do.”
Ms Field elaborates: “Cost disclosure is a big thing that’s going to come out of Mifid II, so we’ll be looking through the ins and outs of all of that and providing guidance to our [members].
“We’re doing some work with the AIC [Association of Investment Companies] and the IA on product governance. We may well do some work around this that says, ‘this is what it should look like and here are some guidelines on the sorts of things you might want to consider for your version’.
“But it’s a very fine path to tread between providing thought leadership and being too prescriptive in a way that says, ‘this is what you should do’, because we are not the regulator.”
When asked if this is where former IA chief executive Daniel Godfrey came unstuck recently, Ms Field replies: “Being a trade association can be a very challenging role and you have to talk to members about what it is they want. This is the role that we take with our members until they tell me they want to do something different. As far as the IA and [Mr Godfrey], I can’t comment on whatever it was doing or why he left.”
The WMA’s work on Mifid II and its role in communicating the latest details to its members is comprehensive. She emphasises there is much “to and fro” of information between the trade body, the FCA, the Treasury and Europe and back to its members again. There is clearly still a significant amount of work to be done on this piece of legislation in the European Union, and Ms Field is unclear of the full implications for companies in the wealth management industry.
She says: “Because we haven’t had the final text through and we won’t be having that for the foreseeable future, there are some things we can only guess at. There are some things that we know now – for example, we’re looking at transaction reporting at the moment.
“Systems software and technology is going to be huge, but we can’t even hint at what the specification is, let alone build it, test it, train for it and implement it.”
Ms Field is certain the industry will not be ready by the original Mifid II implementation date of January 3 2017. “We’ve already said that. We flagged that early on [last] year and the more delays there are to consultation papers [and] final texts, the further back it will be,” she remarks.
The legislation is now expected to be delayed a year, but with necessary IT upgrades estimated to take 18 months to complete, the deadline is still tight, she believes. “But our firms have all been engaged, they know that it’s coming and they’ve all looked at what they can do.”
To suggest it is a time of change for the wealth management space is something of an understatement. Ms Field notes that just one of the many challenges facing the sector is regulation.
“We have Mifid II, but we’ve also got a new anti-money laundering and a new data protection directive that’s going to be coming in. There’s a tight window for some of this stuff, and we’ve [also] got the Senior Managers Regime that will apply to all firms.”
Also high on her agenda is the impact of technological changes on the industry, and the squeeze on profitability and margins many wealth managers are facing. “There are some great opportunities – you’ve got pension freedoms and the Financial Advice Market Review [FAMR], and both present opportunities to companies in different ways,” Ms Field says.
“I’m hoping there’s going to be a number of solutions [to FAMR] because I don’t think technology is the only answer. I think it will be a mixture of both – that technology will take you so far but there has to be something to break this impasse between what is advice and what is guidance.
“If I go down this advice route then I’m doing so because I choose to. There has to be some way of breaking this kind of perfect storm where firms, several years down the line, are still on the line for advice that they may have given 15 years ago.”
She adds: “There has to be some way around that because otherwise the advice gap is going to continue.”
CV
Liz Field
2014 – present
Chief executive, Wealth Management Association
2009 – 2014
Chief executive, Financial and Legal Skills Partnership
2005 – 2009
Managing director, Liz Field Consulting
2002 – 2005
Head of organisational development, Gerrard
1989 – 2002
Chief executive, Insurance Industry Training Council, Banks and Building Societies National Training Organisation and Financial Services National Training Organisation
