The Institute of Financial Planning has hit back at claims from members that a merger with the Chartered Institute for Securities and Investment will damage the IFP’s brand.
Questions have been raised by members about why the consultation on merging the two organisations was launched during the summer holidays when many advisers would be away and is only four weeks long.
Members were told about the potential merger on 7 August, with views sought by 3 September.
Steve Gazzard, IFP’s chief executive, told FTAdviser that members slamming a merger with Cisi are wrong to think the deal would amount to a takeover of his organisation and revealed why they have only been given four weeks to comment.
Mr Gazzard said he was aware some members had called for a six-month consultation but pointed out as the merger would impact IFP staff he felt it was unfair to drag the debate out any longer than four weeks.
He said: “A six-month consultation period would be damaging to IFP staff who would then be living under that threat for six months.
“We felt one month would provide everybody with an opportunity to engage.”
IFP members also the proposed merger as a clash of cultures.
On one of the Institute of Financial Planning’s forums, Eugen Neagu, Chartered financial planner, said he had signed up to the IFP based on the fact it backed working on overwhelming academic and empirical evidence rather than using a crystal ball.
Commenting on an IFP online forum, he said “The two approaches (taken by IFP and Cisi) seems rather incompatible one with the other, and if you do not share the principles with those people I cannot see how you can get together with them.”
Nick Crabbe, Chartered and certified financial planner, questioned why the IFP would want to merge with an organisation that promotes active management as its core philosophy when the majority of its own leading members use passive structures.
By doing so, he said the IFP will be tacitly promoting such an approach rather than adopting a neutral stance on the discussion and letting financial planners make their own minds up.
Mr Crabbe said: “I understand the need to grow our community but I do not see this as an acceptable way to do it. I fear that if the merger goes ahead I will be ‘guilty by association’ of supporting an approach to investment that is simply not within clients interests.”
However, Mr Gazzard said a poll of his organisation’s members a few years ago showed the bulk do recommend actively managed products.
He said while the IFP advocates cashflow modelling it has always been “agnostic” about the solution recommended to clients by members.
In terms of whether the deal was a merger or a “takeover” as some members suspected on online forums, Mr Gazzard said if the proposals went ahead the IFP would be a professional forum within Cisi and the IFP board would sit on Cisi committees.
Mr Gazzard said advisers should not see any immediate change in the approaches advocated by the IFP on completion of a merger.
He said: “The values, ethics and professional standards are common between the IFP and Cisi. I do not think there is a big gap there culturally.
“The IFP board will remain and will operate separately within Cisi.”
emma.hughes@ft.com
