20th January 2023

What is it now Corporal Jones?

Just got back to work and cleared my 1,000+ emails to discover that the CII and PFS are declaring war on each other. This is hardly a surprise. There has been background skirmish warfare running all of 2022 and debatably for the last 5 years.

The current issue is that the CII claims, incorrectly, that the PFS which is a money spinner, is their subsidiary and therefore they can pillage its reserves at will. They already have, and like the pillaging Danes of old are returning for more booty. 

The CII is suffering from a commercial problem - too many meerkats. 

The General Insurance Industry which gave the CII both its raison d’etre and its kudos is no longer growing. The Broker world is diminishing as insurance market is increasingly price driven. There are no longer the numbers of brokers to support what the CII has within its establishment. They grab the PFS money or go bust.

Whilst PFS members might complain; the CII hopes that Apathy will, as usual, carry the day and they will not actually do anything.

What we are seeing here is modern management and political policymaking.  

Directors of old were sensible people would look at a problem, identify what their options were and deploy the minimum amount of power to resolve the issue. The new way, particularly in Government, is to look at their powers they might be said to have and see how much they can exceed them. No longer is the test what is reasonable but what they can get away with.

UK taxpayers pay for the staff of regulators, quangos and the civil service to go to courses designed to train them how to exceed their powers and how to use their PR function to denigrate those who object to this abuse of power. So, CII is attempting to pack the CII board with their appointees who will do their bidding.

We have seen how FOS avoids the Limitation Act which would stop a number of FOS and FSCS cases. If the industry had the testicular fortitude to take them to court, the issue would have disappeared years ago, but as too often Apathy wins.

As always there is a historical lesson. Before the Financial Services Act came in 1988, those advisers that were represented at all, were locked in the ghettos of larger organisations often representing larger international firms. Smaller advisers were not in membership for their needs to be represented, but to pay for the representation of others and give their association the illusion of wider representation. Members of PIMFA would recognise that world.

They also faced an appalling wall of snobbery from within, which as CII is proving, continues to this day. 

When the IFA Association was created, it was with the prime aim of killing off those ghettos and creating a single association for the business needs of firms describing themselves as IFAs. For a decade it was increasingly successful. Within, what would become IFA World, there were a number of descriptors which meant absolutely nothing to consumers but held huge kudos within the sector. We removed them. Sadly this approach is returning

By 1999, we achieved unity and had assembled 1,800 firms around the IFA flag, representing around 25% of the available firms. Notice unity did not include the 75% of firms who still hadn’t joined anything, and it is now worse. 

Sadly, the CII reminds me Dad’s Army Lance Corporal Jones. When the platoon came to attention, he was 5 secs late. In the CII's case it is always at least 5 years behind their members’ needs.

When the Financial Services Act was launched in 1988 the CII was in pole position to create a regulator for all Financial Advice both Insurance and Investment, but it was so busy fighting Insurance consultants that it didn’t even give that a thought. 

As a result, we ended up with an alphabet soup of regulators; but the snobbery did even finish there. Insurance Brokers even needed 2 trade associations as those in the London market thought their provincial colleagues were too commercial and hadn’t gone the right schools.

So, Enough of the past. Let’s look at the resources needed for the profession to thrive. Ideally you need 2 representative bodies. Professional Bodies who deal with the qualifications, collegiate principles, standards and regulation of the profession and trade associations who deal with the commercial health of the Profession – You need both. 

The pair create a healthy tension which ensures that the profession remains practical, beneficial to the consumer and profitable within itself. Professional Bodies have a tendency to become ever more exclusive, ever more academic and potentially cult like. Trade associations have to look at the real world from a practical perspective.

If we are looking to create an alternative representation, we could look at Europe. In many countries, Representative Bodies have both commercial and professional aspects. In many countries membership is mandatory, thus avoiding the freeloading from which the UK market suffers. In the UK, this structure is only seen in professions that have the Government as their prime customer.

For instance, The Courts and the NHS are the prime clients of the Law Society and General Medical Council. That said if we are going to square the current circle, we need to look at a combined structure but given the current state of the PFS/CII battleground a new body may need to be formed – quickly. 

The new FSMA is going thought the Lords*. The last thing the profession needs is this nonsense. In 2000, the actions of the ABI and the Treasury ensured that the advisers’ trade associations were in turmoil when the FSMA 2000 was going through Parliament - much to the delight of the larger players who know the power of lobbying.

This time they did not have to do that, as the CII did it for them.  Yet again at the CII, Corporal Jones is 5 years behind the needs of the profession. This mess is currently not only compromising the profession but the commercial success of the firms involved.

Here is what you need to do: 

1). All firm principals need to encourage all of their PFS Members need to write to: don.macintyre@thepfs.org. 

Hi Don: 

I am writing to request an extraordinary general meeting under Clause 5.2 of the Articles of Association. My full name is ????????????? and my PFS PIN is ??????????. I look forward to hearing that this request has sufficient support to force a debate of the facts as currently the only available information from CII and PFS directly conflicts. Please acknowledge receipt

Kind regards 

2). Advisers need to decide even if they want to be represented.   

Advisers need to decide even if they want to be represented.  The IFAA was meant to be the answer to the questions on representation asked in the Heath Report 2 in 2015 in which 90% of respondent wanted a new association. Less than 9% of the industry ever joined. 

The IFAA was meant to be the answer to the questions on representation asked in the Heath Report 2 in 2015 in which 90% of respondents wanted a new association. Less than 9% of the industry ever joined. 

Advisers find no problem in finding reasons for not joining associations. They didnt join APCIMS/ PIMFA. They didn't Gill Cardy's body and after 8 years maybe it’s time they and you joined the IFAA

Garry Heath

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