‘We won’t carp on about regulatory fees,’ says advice trade body

The head of the advice profession’s newest trade body has said her organisation’s links to influential people will deliver better results for IFAs than ‘thumping the table’ and ‘carping on about issues like regulatory fees’.

In May, the Wealth Management Association (WMA) and Association of Professional Financial Advisers (Apfa) announced their intention to merge.

The new all-encompassing trade association, the Personal Investment Management and Financial Advice Association (Pimfa), launched at the beginning of June (with the four Apfa staff joining the WMA’s 18).

New Model Adviser® sat down with Pimfa chief executive Liz Field (pictured) to ask how it intends to advocate for advisers.

How did the merger come about? 

We [The Wealth Management Association] first started having conversations with Apfa last summer. We had already, over the previous year, started to place a lot more importance on financial advice and planning. We had looked at FAMR [the financial advice market review] and were vigorous in our approach to the policy questions in that, along with the investment implications of pension freedoms, and were starting to gear ourselves up to look at financial advice and planning in more detail.

We work very closely with the other trade associations, and it just made business sense that both organisations merged. There is a blurring of lines between wealth management and financial advice now, and when I’m out meeting financial advisers, they are often actually wealth managers under my old definition under the WMA. We now represent the full face of financial services to the private individual.

How will the new body improve upon the capabilities Apfa in advocating for advisers?

The key benefit for us is that we have now got greater resources, having grown to 22 people, so we very well resourced as a smaller trade association. With that comes infrastructure, and that enables us to present a much stronger voice for the sector. We are into the FCA three or four times a week meeting with Andrew Bailey [chief executive of the Financial Conduct Authority], Megan Butler [FCA head of supervision – investment, wholesale and specialist], Nick Miller [head of investment management supervision], and my team meet with all the policy and supervisory figures that cover both sides of the holistic investment management and financial planning sector.

It also enables us to get into the Treasury and the regulator to present the views of the sector. The more effective infrastructure, enables us to do regional events, provide a good website, and offer lots of back end content for members, along with freeing up policy experts to focus exclusively on policy issues.

What are your regulatory priorities?

Our first is MiFID II. We have a MiFID II for non-MiFID firms bible in the works alongside an emerging MiFID II guide that WMA had started prior to the merger, as a result of endless committee meetings and conversations with the regulator. We are now taking that and establishing a read-across to financial advisers and Article 3 exempt firms, and the first part of that will begin to come out in September.

Second is the senior managers regime. We were pleased that there was a delay in the launch of the consultation paper, because we had lobbied hard for some proportionality and appropriateness measures. As WMA, the majority of our firms are small to medium sized, and it’s the same with PIMFA. We are now seeing that proportionality in the core aspects of SMR proposals, and we have also been asking the Treasury to put an implementation date of 2019, because with MiFID 11, GDPR [general data protection rules], PRIIPS [packaged retail and insurance-based investment products rules], there’s an endless machine of regulation coming down. If we are going to do something major like the SMR, there are many further considerations around that, such as employment contracts, that needs to be negotiated. Let’s do it properly, and it needs a reasonable timescale.

How do you cater for independent as well as larger restricted advice firms?

The way that we work is by having a cross-representation of firms involved in the different aspects of our work. It’s in our constitution that, for example, our board needs to be representative of our membership base, so equally, on WMA we have pure advice firms, stockbrokers, and a diverse range of other firms.

The same will happen with PIMFA. We can look at a topic and put it to our members, and say ‘from a restricted point of view, what’s the take on this? From an independent point of view, what’s the take on that?’

We may have to accept that sometimes there will be issues where there are different views from different types of firms because of their varying business models, and we will just have to be open and upfront with that.

How has the merger impacted the headcount?

We had 18 originally, and have inherited four from Apfa, so there are now 22 of us. I think we’ve got the right kind of resources where we are now, though we could probably do with a couple of others on the research side.

How will your advocacy for advisers, in terms of reacting to new legislation or regulatory developments, differ from Apfa’s? 

We have to be mindful that there are some things that you can shout about but not make a blind bit of difference. You can’t keep carping on about issues like regulatory fees, for example. As a small organisation, we have to focus our resources. I am not going to spend money unwisely. I am not going to communicate on the things that I think are not going to make a jot of difference.

Where we place a lot of emphasis is on the personal contact, face-to-face or over the phone, with the regulator and with the Treasury. We have a very good relationship, we think, where we can pick up the phone and say “we have a problem, this is our view, we agreed XYZ was going to happen and nothing has changed, therefore why are you asking firms to do ABC?”. We won’t be thumping on the table, that is not our style.

As an example, when the SMR Consultation Paper came out, I immediately wrote to Katharine Braddick [director general, financial services] at the Treasury about the timescale, and received a letter back this morning which copied in the FCA. It is about people and utilising relationships.

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