Reform of the Life Insurance Association from a membership body to a professional association signals a major change for the financial intermediary market, as it is designed to modernise the image of advisers and transform advice standards.
The LIA’s Manifesto for Change unveiled last week is to implement a completely new brand, a corporate structure based on Higgs standards of governance and minimum entry requirements within five years to transform the consumer’s view of intermediaries.
So far, the feedback from members is extremely positive: advisers want to be recognised as disciplined, professional experts who want to offer clients the best possible service. There has already been a lot of work undertaken in the last couple of years to encourage good practice and professional development.
At a time when the industry is already undergoing huge transition and regulatory reform, the LIA has sought to move sooner rather than later to keep up with the modern ideal of the financial adviser.
Moreover, this move to transform the body appears to be much more than just a facelift. The five-year plan is intended to overhaul not just the corporate image and identity, but to challenge the balance of power within the financial adviser market.
Professional bodies such as the Chartered Insurance Institute (CII) and Society of Financial Advisers (SOFA) have until now thought to have been the main body acting in the best interest of professional standards and quality of advice. Now, it seems the LIA is taking on all the professional bodies through reforms which should boost its outward reflected image, professional practice of intermediaries, industry education and, perhaps most importantly, its political and lobbying position. In its plans to become a professional association, the LIA may just achieve all that.
It was pointed out only last week at the LIA’s annual conference that the brand is likely to go when the Association considers its title and brand in Q1 2005, as the ‘liar’ (LIA) label is not exactly the message advisers want to project to their clients.
Speaking at the LIA conference in London last week, Mark Ommanney, director general of the LIA, acknowledges there were several routes for change the membership body could have gone: trade union, trade association, salesmans’ club, service provider, lobbying body or professional association.
“To survive and prosper, the LIA needs to be dynamic, innovative and to represent the needs of its members by being forward thinking. We need to champion the causes of advisers and restore the future of consumer belief in us as an industry,” he said.
Ommanney admits the change is not going to be easy for some advisers, as the maintenance of entry and best practice standards – being developed for launch in the second half of next year – will require the raising of minimum educational and competence requirements if advisers are to prove to consumers they can be trusted.
“Standing still is actually going backwards and with the pace of change that we have witnessed over the past few years, we would end up going backwards very rapidly.,” said Ommanney.
“There is a price to all this: the work for all advisers is to tighten and maintain standards. The work involved for the LIA is immense but I don’t believe there is an alternative,” he added.
So far the feedback is positive, and the rallying support suggests its 20,000 membership is embracing change rather than fighting it. Only time will tell, however, whether the LIA can really change in the space of three years – when the new LIA is implemented – and present an industry body which carries all the credibility of those seen in the legal and accounting professions.IFAonline
The majority of financial advisers (85%) believe the number of self-invested personal pension (SIPP) providers will continue to fall in the coming year, according to Dentons Pension Management research.
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