Trade bodies are really having to fight for their place in the industry today. Aside from professional organisations that issue certification and qualifications, it can be hard for trade bodies to assert their importance to advisers, especially in relation to the ever-growing popularity of online networks and resources.
The conflict, however, comes from the fact that trade bodies are almost universally independent of product providers, which means they need to charge a membership fee. Social networks operating only online generate their revenue through advertisements, which relies on the support of providers. The fact that they are free to join is a major attraction, but it comes at a price.
LifeTalk has over 10,000 members, which, as a free online centre for advisers, dwarfs the membership of many real-life organisations. For example, according to Money Management research, just 2,100 advisers are members of the Institute of Financial Planners (IFP). This clearly plays an important role in giving IFAs a place to communicate and network online, but the involvement of providers adds an extra layer that potentially compromises the way advisers can discuss.
“We’re quite keen that we have somewhere where IFAs could chat freely with each other and ask questions. One of the things we wanted to avoid at all costs was industry people slagging each other off. We don’t allow anonymous profiles,” says Phil Calvert, founder of LifeTalk.
Essentially, the involvement of providers that enables online communities to offer free membership means they are forced to sacrifice some of their independence.
“Revenue comes from providers, and if we’re telling them they need to engage with social media and then they see a load of advisers slagging each other off, it’s not so good,” he adds.
It is obvious that social networks rightly have a big part in the way advisers gather together, but in the long-term it could potentially be a mistake to forego actual trade bodies altogether.