05 Feb, 2008
Published: 10:45 Tuesday 05 February
By: Iain Martin , Reporter
Financial planners and professional
standards bodies have praised the 'manifesto for advice' launched
last week by the Association of Independent Financial Advisers, but
Aifa's timetable for change has been criticised.
The manifesto's six core principles are the clearest sign yet of
Aifa's embrace of professionalism and build on its recent campaign
for advice and sales to be clearly separated.
Aifa called for advisers to become better qualified with the aim
that 'chartered (or equivalent status) will become the preferred
trading style of firms' within 10 years.
But Nick Cann, chief executive of the Institute of Financial
Planning, questioned the 10-year delay and said 'three years is
more than enough time for advisers to get to the diploma level.'
A spokesman for the Personal Finance Society welcomed the manifesto
commenting it was 'in line with their strategy' towards
Keith Iles, from the JHC Partnership in Harrow, agreed the
'qualification ladder must be drawn up' but was unsure about the
timeframe and was concerned about the impact if advisers rushed to
The six principles seek to ensure that:
Professional financial advice is client-focused.
Advisers have an obligation to deliver the most suitable advice in
the interest of their clients.
Advice firms should be free to operate commercially in whatever way
best meets the needs of their business and clients.
Consumers should be able to obtain fair, expert advice from
financial advisers in order to become well-informed about what they
need to do to improve their long-term finances.
Providers of financial services and products have an obligation to
support the advice market.
Advisers have the right to expect a consistent, cost-justifiable
and fair approach to their regulation.
Pensions minister Mike O'Brien MP said: 'This is really good stuff
from Aifa. It represents an important step in the debate, setting a
vision for IFAs giving advice in the future.'
However, concerns have been raised about the 10-year time frame
Iles said 'For advisers in their late 50s and 60s it is bloody
difficult facing exams and running a business.'
Aifa made it clear it wanted to see 'firm first, consumer second
sales behaviour' consigned to the history books.
The manifesto made it explicit Aifa hoped advisers will 'move to
remuneration models that prize on going client service, recurring
incomes and reduce dependency on upfront initial