OpinionDec 7 2015

Apfa council member hits back at Prestridge

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Apfa council member hits back at Prestridge

In an opinion piece last week, Jeff Prestridge made a number of criticisms about the Association of Professional Financial Advisers; most of which were unfounded.

He stated that they lost credibility when they dropped the word ‘independent’. On the contrary, they should be commended for their foresight as, since RDR, the market has moved on.

Even the Financial Conduct Authority cannot give a clear definition of what independence means, and as a result many firms do not now use that as the quality mark, preferring the Chartered status that has much more meaning with clients.

Add to that the rush by Standard Life, Old Mutual and others to create vertically integrated models and independence, as we historically know it, is dead.

Independence is related to product sales. In contrast, quality advisers provide advice backed up by access to whole of market investment funds. Chartered and whole of market is more meaningful and honest than independence.

Furthermore, the majority of the regulatory rulebook, operation of the Financial Ombudsman Service and the Financial Services Compensation Scheme levy, affects so-called independent and restricted firms equally. We therefore need to speak with one voice.

I fully understand the concern of smaller owner-managed firms at Apfa’s reliance on the nationals and networks. However, in my first experience with council I was struck by the dominance of smaller firms in the conversation.

It is they that have the passion, as they are more directly impacted by these changes, and it can only be positive that the big players are hearing this first hand.

I too have great respect for Garry Heath and he certainly speaks with passion. However, when dealing with government and officials, table thumping gets you nowhere.

This is where Apfa, working alongside Personal Finance Society and the Association of Professional Compliance Consultants, has the advantage.

Libertatem’s timing is unfortunate. The Financial Advice Market Review has come too soon for it to have a meaningful voice.

The strategy of polarising smaller firms is also flawed. The vertically integrated train has already left the station and we need to work together as one if we are to achieve meaningful change.

One point I do agree with Jeff on is the lack of noise coming from Apfa. This is one reason I decided to join the council. We need to engage and communicate with advisers better and let them know we share their anger and passion.

Increasing their support will add weight to the diplomatic representation that Apfa provides at the highest level. This is where Garry could really make a difference. I would urge him to align and preferably merge Libertatem with Apfa.

With his passion, knack for PR and ability to engage smaller firms, allied to Chris Hannant’s understanding of diplomacy and protocol, we would have a very powerful team capable of achieving real change.

Ultimately, we all want the same thing; a professional and mutually respectful relationship between advisers and regulators. If we achieve this, a simplified rulebook, lower costs, reform of the Fos and FSCS levies and a long stop will follow.

We need to speak with one voice if we are to maximise the once in a generation opportunity that is the FAMR.

Paul Beasley is the managing director of Richmond House Group.