Chris Cummings, director general of Aifa and Ami, greeted me in a shirt and jeans on Friday morning - apparently in preparation for the Aifa Christmas party - declaring: "I've actually dressed up today - usually I'm wearing very casual clothes!"
It's a sharp contrast to the image I had of a man dressed in a business suit and purely focused on the world of IFAs and it seems his sense of humour is just one of many surprises behind the top man at the Association of IFAs.
Outside of the office environment, Cummings reveals he has a passion for writing rather than regulation, and describes his latest venture into comedy/drama TV scriptwriting as “northern Only Fools and Horses meets Chocolat” while declaring his great ambition is to write at least one successful script or novel, which will “pay for an Aston Martin DBG and a round-the-world ticket”.
Cummings also likes hiking, rugby, cricket, films and spending time with his wife and three children. So how does he fit it all in with his dual positions at Aifa and Ami?
“I am a workaholic,” he admits, “but I wouldn’t be one if I wasn’t enjoying myself.” Cummings declares his job to be “the best in the world” and says he will stay “as long as our members want me”.
He insists his move to Aifa was not just another career step – instead, he did it because he felt it was “worthwhile”, he could do it well and he could be committed. He describes the positive reception he received when he took up his position as one of the highlights of his career and says he felt “honoured” to take responsibility for both Ami and Aifa.
An earlier achievement he is proud of is setting up Ami and making it successful. Cummings had always planned to run his own IFA business but when Paul Smee – former director general of Aifa – asked in May 2003 “why work for one when you can work for them all?” he accepted the challenge of making Ami work.
And his success with Ami is apparent, as he points out: “Ami had no members and no money and I was told if I didn’t make it work I wouldn’t have a job. Now there are more members in Ami than Aifa.”
Cummings says his previous experience working at a mortgage lender firm helped, but he was also lucky because “the timing was exactly right – the market was preparing for statutory regulation”.
His success as head of Ami is one of the reasons he was asked to join Aifa, becoming deputy director general in January 2004 to David Severn when Smee left. Shortly afterwards, Severn had to leave because of ill health and Cummings only stepped into the director general position just five months ago.
While holding senior roles at two organisations could faze a lot of people, Cummings says he is able to juggle his dual positions because “they complement each other so well – I can speak to the Financial Services Authority (FSA) about the whole waterfront of financial services”.
In addition to discussing issues with politicians and regulators and managing the Aifa business, Cummings spends at least two days a week with members, either visiting their offices or speaking at conferences.
He believes it is important to have “emotional engagement” with members so they are aware of all the current issues and can contribute ideas. “I don’t believe all the good ideas come from Austin Friars,” he adds.
One current issue which members have raised concerns over is stability, as Cummings says the IFA profession has had “year upon year of fundamental change” because of regulation. This can mean IFAs find it difficult to get capital, as investors do not like unstable environments. The director general of the Adam Smith Institute has called on the government to have a “regulatory holiday”, which Cummings says makes good business sense.
But even if the FSA were abolished – on which Cummings hurriedly says “this is not a proposal!” – he points out IFAs would still have 70% more regulation from the EU through MiFID, Basel and the European Court of Justice rulings.
To tackle this, he says the FSA needs to be “more pro-UK” and do a cost-benefit analysis of all EU legislation.
If, on the other hand, the FSA adopts the recommendation of the Treasury to not consult on certain rule, guidance and best practice changes, and moves further to a principles-based approach, Cummings says Aifa will need to be more vocal at the EU level and produce more good practice notes.
One of the biggest issues Cummings often hears of from IFA members is cost control, as Cummings says the FSA cost the industry £260m last year in regulation, which, suggests Cummings, raises the question “how seriously does the FSA take zero-based budgeting?” He says the FSA should start from zero pounds and ask how much it needs, rather than using £260m as a baseline.
An additional problem IFAs face, and which Cummings is trying to help manage, is a £10m bill next year from the Financial Services Compensation Scheme (FSCS), even though advisers are already paying more to the FSCS than the Financial Ombudsman Service (FOS) and FSA combined. The FSA says it will release a list of options for changing the levy soon, but Cummings is personally attracted to creating a block of people with a pecuniary interest – manufacturers, investment management firms and IFAs – who would all share the bill for specific problems.
His workload at present also sees the Aifa asking its members about proposed changes to the Ombudsman case fee system, including a tiered case fee which could see complaints quickly resolved and attracting a lower fee. Yet it is a proposal which Cummings is not entirely convinced by.
“Innocent should mean free and we need a better balance of the costs,” suggests Cummings.
Although Sir Christopher Kelly has suggested abolishing the case fee and increasing the levy, Cummings says “it doesn’t feel quite right” because badly-behaving firms could “dump everything on FOS" so he adds the Aifa will dedicate the first quarter of 2006 to FOS and case fees.
Improving the reputation of the industry as a whole is one of the key drivers for the Aifa, so Cummings is particularly concerned the experience of some senior politicians is with advisers who send emails “with lots of colour and underlining”. Feedback from such politicians suggests these actions are not creating the right impression of the industry, but Cummings hopes this is changing.
“We need to address the reputation of the industry and make codes of conduct count. When firms see problems they need to take action,” he adds.
Cummings believes the introduction of Chartered status is “hugely important” to improving the reputation of IFAs. “When we look back, it will be a landmark in the profession. I am so proud we got it,” he says.
With all this lobbying on behalf of IFAs, you might think Cummings finds it hard to maintain good relationships with the FSA and government and, indeed, he admits: “I wouldn’t be doing my job well if they liked me too much.” However, he says the lobbying is “critical but constructive – if we just threw rocks everyone would lose”.
He points out people pay him to do his job and deliver promises for the benefit of Aifa’s members and “if I didn’t do this, members would either stop paying fees or I would get fired. This gives me the moral grounding to press regulators to be more accountable.”
To that end, Cummings is determined to keep fighting for Aifa’s members because “there are so many things we can do better next year”. He plans to do a lot more on finding out how Europe can work better for the industry, how the finances of regulation can be better distributed and providing members with support on moving to a fee-based business.
He adds: “Some people have said to me ‘you shouldn’t fight a battle you can’t win’, but I believe it is better to have fought and lost than not fought at all.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
Three years at Wells Fargo
Effective from 9 December 2019
One firm with permission suspensions left
Continuing the Architas education series for clients.
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