It is the end of an era for the Institute of Financial Planning.
November 1 marked the day the professional membership organisation closed up shop following its merger with the Chartered Institute for Securities and Investment.
The merger was heralded by the financial services bodies as a positive step forward; opening the door to new realms of possibilities for its members. However, the acquisition process has not been plain sailing.
An estimated 13 IFP staff members have opted to take a redundancy package rather than move east from their offices in Bristol to London.
There have also been grumbles of dissatisfaction from disgruntled members of the IFP who have questioned the benefits of the move and whether it will dilute the body’s somewhat unique culture.
A concern made clear by a question and answer session on the IFP’s website is whether the move is truly a merger, or whether the body will be absorbed into Cisi.
Alistair Cunningham, chartered financial planner at Surrey based Wingate Financial Planning, and a member of both the Personal Finance Society and IFP, broadcast his concern on the matter in a post on a popular adviser forum.
He said: “I am concerned that the IFP will be subsumed by the Cisi. I may, or may not, continue my membership if this happens.”
In direct response, Steve Gazzard, then interim chief executive of the IFP, released a statement stating that the company would form part of Cisi as the Financial Planning Professional Forum, retaining its brand, and operate a committee consisting of IFP board members.
He added: “Members of the IFP forum committee would serve on all key committees within Cisi including a position on the board of Cisi.”
Despite Mr Gazzard’s reasoning, Mr Cunningham remains unconvinced.
He said: “It is a takeover; there are no two ways about it. I am not in support of the merger, but it has happened.
“Many people were attracted to the IFP because it was a small organisation, and a significant amount of its membership comprised individuals who come from small practices that stood for financial planning over asset management.
“Cisi’s ideology is completely different. It focuses on wealth management – what has that got to do with financial planning?”
A Cisi spokesman said that IFP members will sit on the education, qualification, membership and integrity committees respectively, while ex-IFP president Rebecca Taylor, whose role was succeeded by Alan Dick, is the sole IFP representative in the Cisi’s 17-strong board of directors.
Meanwhile, Mr Dick is chairman of a new IFP professional forum, which will be run by a committee initially consisting of the existing IFP board, set up as a distinct part of Cisi.
Although generally supportive of the merger, Abraham Okusanya, principal at platform, pension and investment research consultancy firm FinalytiQ and chairman of the London branch of the IFP, said the lack of IFP representation in Cisi’s board of directors is the more notable cause for concern.
He said: “It does worry me a bit. The IFP representative is going to enter a board filled with Cisi delegates, who probably know each other very well and probably share similar views. The influence that the IFP member would have is likely to be slightly diminished.”
Mr Okusanya, who also holds the CII chartered financial planner as well as CFP titles, said the rationale behind IFP’s merger with Cisi is two-fold.
The first is financially driven. Questions have arisen over its financial viability.
The IFP claimed it had achieved its profit and loss goals with both the organisation and its wholly owned subsidiary Financial Planning Standard Board (UK), which owns the CFP patent outside the US, making profit in line with expectations. The combined profit was £40,820 before tax, which has seen P&L reserves grow to £132,264.
In comparison, the combination of the operational surplus and the investment gains resulted in an overall surplus for Cisi of £1.5m. In addition, the body has reserves of almost £10.5m.
Stephen Jones, director at Derbyshire-based Clear Solutions (Wealth & Tax Management), who holds the chartered and certified financial planner designations, said: “I think the fundamental problem is that the IFP failed to achieve critical mass to have a big enough voice on the wider stage. The merger with Cisi gives us the financial muscle for us to really make a difference.”
The second key driver of the merger is attributable to FPSB’s aspiration for more people to adopt the IFP’S CFP qualification globally and in the UK.
Cisi members with the CWM designation will not be automatically awarded the CFP certification following the merger, and vice versa. However, the crossover in entry criteria for both certifications means members of both bodies have a head start in obtaining either qualifications.
IFP members who also hold a CII chartered financial planning qualification are only required to undergo an ethics exam to achieve the CWM accreditation. Life members of the IFP are also allowed to become life members of Cisi without charge.
Mr Jones said: “I think that there are bound to be some CFP accredited planners who will go for the CWM qualification and I think some Cisi members will go for the IFP qualification, but the numbers are unlikely to be significant.”
Formed in 1986 the IFP serves more than 2,000 members and about 1,000 certified financial planner accredited professionals with a programme of national events, training courses, and a regional branch network focused on 22 areas nationwide.
It is difficult to explore the legacy of the institute without mentioning the achievements of Nick Cann, the body’s long serving chief executive – who left the company by mutual arrangement, along with interim chief executive Steve Gazzard following the merger.
His contribution to the body was recognised at the 2015 IFP conference awards ceremony, where he was handed a special award.
Mr Cann went on sick leave after suffering a stroke in March 2013.
Mr Cunningham said: “There is no doubt in my mind that Nick was integral to the success of the IFP. If he was still in the chief executive role there is a great possibility that things would not have panned out the way they have.
“However, that is not to say that the merger would not have taken place if he stayed in good health. I think we would have been in a more powerful position with him fighting our corner.”
Change is on the horizon for the IFP. Mr Dick told Financial Adviser at the recent IFP conference that he was unsure of what changes the merger might bring, but said the IFP conference will be held next year.
Whether the change will be positive or at the detriment of the IFP remains to be seen.
“The proof will be in the pudding,” said Justin King, chartered and certified financial planner at Dorset based MFP Wealth Management.
“At the moment Cisi has made us feel welcome. It is a big organisation – much bigger than the IFP. I do not think that the size of it matters. You can have a big organisation with great integrity. You do not have to be small to have a great culture.”
Myron Jobson is a feature writer at Financial Adviser
Key points
November 1 marked the day that the Institute of Financial Planning closed following its merger with the Cisi
The profit of the IFP was £40,820 before tax, which has seen P&L reserves grow to £132,264
Nick Cann was considered to be integral to the success of the IFP
Timeline
Monday 7 August 2015: The IFP board announces the launch of a four-week consultation period with its around 2,000 members regarding the proposed merger with the Cisi
Thursday 3 September: Consultation period closes
Friday 4 September: The IFP board meets in Bristol to discuss the outcomes and responses during the consultation period.
Wednesday 7 September: IFP board votes to proceed with proposal to merge with CISI
Wednesday 30 September: IFP merger with Cisi confirmed with the completion date of 1 November 2015.
Saturday 1 November: Merger completed
