Reaction mixed to Advocis

(February 21, 2003) A recent call for more co-operation in the financial services industry from Advocis, Canada’s largest professional association of advisors, has produced a mixed bag of responses from other associations and advisors.

The head of the fledgling Canadian Institute of Financial Planners says he thinks Advocis wants to get rid of all other membership associations on the advisor side and create a monopoly. But the president of the Independent Financial Brokers of Canada says he’s happy to work with Advocis on issues of common interest.

The Advocis paper, released earlier this month, asks for feedback on six strategic initiatives to address perceived problems, including industry fragmentation and a loss of investor confidence.

“In our view, the members of various organizations would be better served if they pooled their resources and relied on each other’s strengths to achieve common goals,” the paper stated.

Keith Costello, president of CIFPs, a new CFP-only membership association, thinks that means Advocis wants to amalgamate all advisor associations into a single “super” body, one that could also act as a self-regulator. “I don’t really buy that,” Costello told Advisor.ca. “I don’t think a monopoly on the advisor side is going to solve the problem. I think it’s important to have different views.”

But in an interview when the paper was released, Advocis president Steve Howard said the association does not want to stifle competition or create a monopoly. “We recognize that there are autonomous organizations and we’re not suggesting that any of them be disbanded,” he said.

Costello says he’s also concerned with Advocis’s position that the public has lost confidence in the financial services industry, calling it “alarmist” and a “generalization.”

“From a CIFPs member perspective, because we’re CFP exclusive, we already have high standards,” he said. “And we know, through surveys, that the CFP mark has great brand recognition and trust.”

Despite his misgivings, Costello says he’s willing to work with Advocis on common causes, a sentiment shared by IFB president David Barber. “The IFB agrees that where we have common interest, we are delighted to work with other industry groups,” he said in an e-mail to Advisor.ca. “We will endeavour to maintain an open dialogue with our colleagues and associates and present a united front where possible.”

Reaction from advisors to the Advocis initiative was also something of a split decision. While some welcome the possibility of a single advisor association, others prefer a more competitive scenario.

Related News Story

Advocis pushes industry co-operation to reduce “crisis of confidence”

“Ideally I would like to only have to belong to one association,” wrote Brad Brain in Advisor.ca’s Talvest Town Hall. “One membership fee, reasonably priced, for an association that works for the advisor community, that allows me to pursue the designations that I choose, an association of professionals focused on delivering the best for the client.”

Brain suggested a single association could have different branches to handle the various industry designations, in much the same way a university has different departments.

U. Kerry is on the other side of the debate. “I am not in favour of one association,” he wrote in the online forum. “When there is competition, organizations have to stretch to offer better and more services and keep fees under control.”

---

What do you think of the Advocis initiative? Join the discussion already under way in the “Free For All” forum of the Talvest Town Hall on Advisor.ca.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca

(02/21/03)

Doug Watt