Opinion: Life Brokers have a bob each way in professional associations
The difference this week between a professional organisation and an industry organisation was underlined by the actions of the Institute of Financial Advisers (IFA).
Thursday, May 21st 2009, 5:29AM
by Russell Hutchinson
Without a regulation in sight, without a co-regulatory structure, and without any requirement of it from customers, members, or law, they took a stand.
They punished two advisers. They named them. They went public. You cannot say that this action was in any way self-interested, because it has stirred trouble and does not benefit the IFA.
So it clearly must be about professionalism and client protection.
That's not the same approach as is taken by some of the other organisations. Let's call them industry organizations - such as the PAA.
These groups are wholeheartedly membership-based. They exist to promote the interests of members. They also believe in professionalism. They work to educate members.
Just like the IFA they coach, train, cajole, and encourage. But if there is a stick, it is almost entirely obscured by the carrot. Sure, they are more directly self-interested. But they are also a simpler value proposition for members.
Is there a problem with the two approaches?
I have only the following snippet of market information to offer in answer. A significant number of life insurance brokers see sufficient divergence in purpose, and yet also sufficient value in the offer, to be members of both the IFA and the PAA.
But as recent events have suggested, focus counts as well. So while being a member of both associations may be smart, achieving high practice standards may require focusing on one product line. With market conditions right now, that would be insurance.
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