Health and regulation have been pushed into the spotlight this year with heads of the FSA and Aifa respectively announcing their withdrawal on health grounds from jobs that have profound impact on the work of IFAs.
While we absolutely wish both concerned the best of recoveries, these situations do raise some interesting questions about succession issues, and, above all, how those such as IFAs building businesses should react when policies of regulation and otherwise on which those businesses are built may come under pressure as a result.A lot of focus in the past few years has been on maintaining businesses through emergency or disaster planning, with tighter rules introduced on redundancy features, such as back-up power supplies, vital to the continued functioning of the UK economy.This has been focused in particular on regulated businesses – utilities and power grids receiving most attention of course, but also banks, insurers, and so on.However, in the case of IFA businesses one has to wonder if there is any way of protecting against the risk of policy changes or operational changes that might come out of the blue due to the removal of a key person from a key function.The easy answer is there is no way of predicting the future (as the mantra goes).However, considering the importance of government departments, agencies and other public sector bodies in setting agendas and rules by which economic functions of the country and various sectors and industries perform, it is surely a question that is worth a slightly longer answer.It is not a reasonable act to try to insure against government policy or industry regulators becoming bogged down because of people issues. The knock-on issues are very real, however: consider it may be the case a policy cannot be implemented without the signature of a person holding a particular function. The business equivalent might be not being able to get a second signature on a company cheque, required for it to be cleared.In extreme cases, it may be that a large gap in time before a replacement is found can lead to paralysis of that particular public body.So far there seem to be no signs of that happening in areas involving the FSA, Aifa or any other relevant departments, organisations or trade associations, which could directly impact the future business case of IFAs. Hopefully that will remain so.
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 Jonathan Boyd on 020 7484 9769 or email [email protected].