For an industry that professes to look to the long term, things can come to a head more quickly than you’d think. Just look at the Investment Association.
Talk of a mass decampment by several major Investment Association members last week led to chief executive Daniel Godfrey jumping before he was pushed less than 48 hours later.
Admittedly, problems had been percolating for a while. The IA’s annual report, fatefully published on the day of Mr Godfrey’s departure, attracted headlines for revealing his £533,000 pay package.
But another statistic was just as notable: the IA sent out some 501 circulars to members in 2014, up from 400 the year before.
This mass of communications meant members have had plenty of scope to grumble about what the IA should or shouldn’t be doing.
Complaints in the retail space ranged from the organisation not doing enough to promote active management, to problems with sector rules, and even its decision over how to calculate past performance in an era of differing share classes.
There’s only one grievance that has stuck in the aftermath, however, and it’s about the work being done to improve fee transparency.
Those first anonymous quotes last week, complaining of the IA being more like a regulator than a trade body, have inevitably opened the door to a stampede of criticism.
Either way, the threat of departures has worked, and the IA, now set to consult on its future priorities, is beholden to its members’ wishes more than it ever was before.
Members would say that’s how it should be with trade bodies: we’re free to decide on how we promote ourselves and defend our interests. Some would probably prefer the IA be more like the British Bankers’ Association, which has always leapt at the chance to fight its corner, whatever the issue.
As the events of 2008/09 underlined, the BBA can lobby aggressively for the sector even in the worst-case scenario, safe in the knowledge that it has a captive customer base. The problem for the IA is that, unlike the BBA, it cannot afford to disregard what the public thinks of it.
As plenty of members have pointed out long before this week, the industry’s biggest challenge is convincing consumers – and advisers – of the role active management can play in their futures.
Perception matters, and this might mean decisions that may not go down well with members. Promoting the industry to consumers and advisers means not just highlighting its benefits but also addressing its perceived faults.
Mr Godfrey may have spread himself too thinly, but he was right to realise the role of watchman should not be left to the regulator. The funds industry has long complained about being unfairly lumped in with the banks during the financial crisis. It should be wary of the same thing happening to its trade body.
Dan Jones is editor of Investment Adviser