The merger of adviser trade body the Association of Professional Financial Advisers (APFA) with the Wealth Management Association (WMA) will see advisers lose out, Libertatem director general Garry Heath has warned.
Heath (pictured) warned the merger would create a confused message for advisers, who risked having their voice overpowered by the wealth manager members.
The two organisations announced plans to merge on 8 May, to create the Investment Management and Financial Advice Association (IMFA), with effect from 1 June.
The new body will be headed up by current WMA CEO Liz Field, and is still subject to approval by the members of both organisations.
APFA and the WMA expect the new body to be financially positive on a standalone basis by the end of the first year.
But Heath warned the balance of funding would be tipped in favour of the wealth managers, not the advisers.
"Our view is that, you've got about £2.1m worth of wealth manager association, beating £580,000 at best of AFPA. What APFA is doing is effectively reversing itself into a ghetto created by the wealth managers association," he said.
What's more, a mere fifth of the trade body's members would be made up of IFAs, according to Heath, meaning representation would fall heavily on the side of the wealth managers.
"They will have two different messages - and a confused message at best," he warned.
The comments are reminiscent of concerns voiced over the merger of the Institute of Financial Planning with the larger investment manager-focused Chartered Institute for Securities & Investment (CISI) in late 2015.
Since then, some of those concerns have been alleviated with CISI dedicating £30,000 to make sure financial planning was "protected and nurtured" following the merger.
Heath runs his own trade body for advisers. Launched in May 2015, Libertatem now represents about 800 advisers.
"I'm representing advisers. I'm trying to do it with as much passion and excitement as I can," he said.
However, he added funding was a problem. If the sector gave £1 for every £2,000 the sector takes in, it would be fit for purpose, according to Heath.
"Advisers can either be represented as a ghetto, where APFA is about to take them, or have an underfunded body of their own. Either way, it doesn't work. We need to get people to extract the digit and to actually take this thing seriously," he said.
'More similarities than differences'
APFA general director Chris Hannant, who will take up a temporary post as strategic adviser to the new body, dismissed Heath's claims.
He felt the merger would lead to better representation for advisers overall.
"It is a good thing for advisers. At the moment there is a certain amount of duplication where we're going to the same meetings as the WMA. Rather than have two people do the same stuff, we can have one person, which means there are more resources to concentrate on adviser issues," he said.
For Hannant there are more similarities than differences between wealth managers and advisers, in particular with regards to their concerns about regulation, impending EU regulation, and liabilities associated with investment intermediation.
He said: "There isn't going to be 100% harmonisation of interest on every issue, but the new organisation will focus just as much on the same issues - just because every member of the new association doesn't have strong feelings on every issue doesn't mean we'll pursue them any less rigorously."
Representing all firms
Hannant said APFA had already fended off criticism about its representation of small firms in the past. "People assume we can't represent small advisers because we have networks in there," he said.
"In my time, I've not faced such a division. We make sure there is full representation of all types of firms sitting around our council, which makes our policy decisions. And there will be a full balance of firms sitting around the decision making bodies in the new body, and that will make sure people's voices are heard."
Hannant said he'd received mostly positive responses to the merger so far.
He has agreed to work at IMFA during the transitionary process, which will take up to a year, and will then leave the organisation.
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