Update newsletter

IFAP’s August 2008 Update e-newsletter

Welcome to your August Update newsletter from IFAP.

Over the last three months, we’ve continued to act as a ‘brand guardian’ for the independent financial advice brand – highlighting incorrect use of the term IFA across all media and helping to educate media and research agencies. Read more about IFAP’s campaign in the next section.

Furthermore, read on to learn about the important changes we’ve made to the way Unbiased.co.uk now allocates the half million online enquiries from people looking for local member IFAs.  Going forward, member IFAs who are supporting our campaign by subscribing to our Online Marketing Package (now over 40% of our membership) will now get significantly more leads from us.

We have also recently extended the list of incremental qualifications you can now register with us.

As always, the last section of this newsletter looks at the latest news on IFAP’s consumer PR campaigns.  Read on for an update of our TaxAction 2008 campaign and our other news releases.

If there is anyone else in your organisation who you think would like to receive our Update e-newsletter, please direct them to www.unbiased.co.uk/email/.

IFA Promotion News

IFAP as brand guardian

IFAP’s work is focused on promoting the importance of independent financial advice to consumers and to ensure that consumers remain aware of the benefits of seeking advice from an IFA.  In order to successfully run our campaign over the last few years, it has increasingly become necessary for IFAP to take on a ‘brand guardian’ role to protect the IFA brand.

As part of this role, IFAP has repeatedly picked up on inappropriate use of the term IFA by trade media and research organisations when in fact the term they meant to use was financial adviser. Here is an example of an email that IFAP sent to all trade media (cc’ing all of our IFAP Media Services IFAs):

TO TRADE MEDIA EDITORS

For many years now IFA Promotion (IFAP, Unbiased.co.uk) has been working to promote the benefits and value of taking independent financial advice.  Part of the process has been to educate consumers that not all financial advisers are independent financial advisers.  However, we are increasingly noticing that sections of the trade press (in their copy, headlines, e-mail alerts and Top 100s) are using the term IFA as shorthand when they really mean financial advisers.  Please don’t - if the industry isn’t clear about the difference, consumers never will be.  If you mean all advisers please say “financial advisers” - if you mean independent financial advisers by all means say IFAs.

Kind regards

David Elms
Chief Executive
IFA Promotion

As a result of us consistently following up on this issue, we are now generally seeing the trade media using the term IFA in their headlines and copy only when the story relates to IFAs. Most trade media journalists now recognise that a negative headline labelled IFA, that in fact relates to a story about another adviser type, risks unfairly damaging the IFA brand in the eyes of the trade media audience. That includes intermediaries of all kinds, product manufacturers, industry influencers, consumer groups and of course the regulator.

Unfortunately we have had to discuss this matter further with Financial Adviser, who has continued to use the term IFA inappropriately in some of their headlines and news stories. They have also continued to label their annual top 100 advice firms ‘top 100 IFAs’ when in fact in the last edition three of the top four firms listed were not IFAs. Compare this to Professional Adviser, who, when we alerted them to the issue, immediately renamed their top 100 IFA report ‘top 100 Financial Advisers’.

We will continue to undertake this role on behalf of our member IFAs and we will be grateful if you could alert us to any further inappropriate use of the term IFA and let your views also be known direct to the trade media concerned.

Another important part of our brand guardian campaign relates to misleading advertising on the Google search engine. Over the last 18 months IFAP has been monitoring the companies that are bidding on IFA terms on Google, when in fact they are not IFA firms. This constitutes potentially misleading financial advertising by these firms and IFAP has been submitting a weekly list of examples of such advertising to the FSA.  We see this as an area where we will need to remain particularly vigilant – particularly given that the web is now such an important tool for people researching their financial advice options.

Changes to the way IFAP/Unbiased.co.uk allocates leads to member IFAs

As you will be aware, IFAP has recently made some changes to the way Unbiased.co.uk (and the 62 white label versions of the search running on partner websites) now allocates the half million ‘online’ enquiries from people looking for local member IFAs. Only member IFAs subscribing to our Online Marketing Package (OMP) are currently contributing to IFAP's funding, and therefore to our campaign to promote the IFA brand, and it therefore seems fair that they should receive a greater proportion of the leads we generate going forward.

Now all IFAP's online searches have been set, in the first instance, to deliver details of OMP subscribing member IFAs - although, of course, the search mechanics are still in the enquirers’ hands. Enquirers can still make their selection from the whole membership should they so choose.

We believe this change will result in those member IFAs actively supporting IFAP's consumer brand campaign (through their OMP subscriptions) receiving significantly more leads from IFAP/Unbiased.co.uk.

Following these changes, we’ve been contributing to trade blogs online to provide extra information regarding our thinking behind these changes. Examples of some of these postings, which were posted on the Citywire blog, appear below:

David Elms - Some extra background info for you
09:39 | 11 Jun 2008

1. If you are not subscribing to IFAP’s Online Marketing Package (OMP) you are contributing nothing at all to our funding. Nothing.
2. This is not a commercial move. IFAP/Unbiased remains a not for profit organisation whose sole purpose is to promote independent financial advice to consumers.
3. All 8,700 member IFAs benefit from IFAP/Unbiased generating around 7,000 pieces of consumer media coverage each year - positioning IFAs and the advice process in a positive light (whether or not they have subscribed to our OMP). This media coverage is instrumental in ensuring people continue to value the ‘independent’ proposition available from all IFAs.
4. All 8,700 member IFAs also benefit from being listed on Unbiased.co.uk (and the 62 white label versions of our ‘Find an IFA’ service running on partner websites). Over the last 12 months IFAP/Unbiased dealt with over half a million ‘online’ enquiries from people looking for local IFAs.
5. Our search demonstrably remains ‘unbiased’, as the consumer remains in control of the selection process at every stage, they can still select from all 8,700 member IFAs should they so choose and the search genuinely seeks to match people up with the right IFA (whilst protecting their confidentiality).
6. IFAP/Unbiased has achieved the above media coverage and lead generation levels without any budget increases over the last eight years.
7. Those member IFAs that are subscribing to our OMP (a nominal £250 pounds a year) will now get significantly more leads from IFAP/Unbiased than those that haven’t. At the end of the day these subscribing IFAs are subsidising the promotion of those that have yet to support IFAP/Unbiased. It therefore seems fair that they (the 3,500 member IFAs that are actually putting something into the funding of their own ‘independence’ brand campaign) should get more out of it.
8. By subscribing member IFAs are making a valuable contribution to their own brand campaign. We are grateful for their support.

David Elms - IFAP membership criteria
16:02 | 11 Jun 2008
To be a member of IFAP (and therefore eligible to be listed on Unbiased and the 62 white label versions of the service) you must have an Investment IFA based at the branch listed and you must undertake to give whole market advice and offer a fees option for each product area you list in your top nine (including for GI and Protection). Member IFAs are not allowed to list a product area in their top nine if they can't offer whole market advice and a fees option for that product area. IFAP/Unbiased requires all members to complete, sign and return a declaration to this effect each year. We've just completed this year's audit process and removed 300 entries from our database for non disclosure. If you are aware of an adviser representing themselves as an IFA and you suspect that they are not, then please inform the member hotline on 0117 972 3333 and we will investigate immediately.

David Elms
15:53 | 12 Jun 2008
Actually, I do think 250 pounds a year is a nominal sum of money to support the sole consumer brand campaign promoting IFAs. IFAP's average case size is 650 pounds, so less than half of one IFAP generated lead a year will cover the cost of your annual subscription. At the same time your benefiting from the consumer media coverage we generate which makes it more likely that people contacting you understand the value of 'independence'. If we were making money out of this, I might have more sympathy with you. But we're not. IFAP remains a not for profit organisation that has not increased its budget for eight years. If you are not subscribing to our OMP then you are currently being subsidised by the 3,500 members that are. Hence why the changes we've made seem fair to us - consumers can still select from the whole membership if they so choose. However, believe it or not, consumers researching online (94% of our total) actually want to see IFAs displaying websites.

David Elms
09:41 | 13 Jun 2008
The additional optional search criteria on Unbiased directly influence the quality of the leads that we generate. For example, 35% of total searches by enquirers now specify that they want to be presented with member IFAs holding qualifications / designations incremental to current benchmark (FPC 1/2/3, CertFP). Supporting this we've just received back 1,796 questionnaires from member IFAs telling us that 74% of IFAP generated leads result in them writing business. This seems to suggest to us that, as far as consumers are concerned, we've got the matching process about right.

David Elms
11:23 | 13 Jun 2008
Selection by remuneration method remains problematic to us whilst IFAs and the Media continue to use the terms 'fees', 'fees based' and 'fees only' interchangeably to mean completely different things. Apart from getting remuneration method definitions applied consistently, we also need to be able to verify advisers remuneration types (presumably with the FSA?) before we can safely present such data to the public. This is currently not possible, hence our current position on this. Interestingly, by far and away the number one search criteria for consumers continues to be location - which is why all our searches deliver results strictly on the basis of those IFAs with matching criteria closest to that consumers nominated post code.

David Elms
11:53 | 13 Jun 2008
When we can verify adviser remuneration data against FSA records (remember we already verify firm/RI authorisation and product permissions weekly with the FSA) and when we can be confident that we can clearly explain to consumers what a particular remuneration method means (because advisers are applying the term consistently across the industry) then we will revisit this. But not until then. Our direct experience has been that far more consumers want to select IFAs by incremental qualifications / designations than have a preference for an adviser's payment method.

David Elms
15:39 | 13 Jun 2008
 We are simply not prepared to risk presenting information to consumers as being accurate when we currently can't be sure what it means or verify it as being correct. Our view is that the risk to industry reputation of inadvertently presenting inaccurate or misleading payment method data currently outweighs the advantages you describe. If this situation changes then we will review our position.

Make sure you have registered all relevant qualifications on our database

We have also recently extended the list of incremental qualifications you can now register with us. If you hold any of the following qualifications and would like them to be applied to your profile on Unbiased.co.uk, then please call the members hotline on 0117 972 3333, or click here to update your profile online.

Eligible new qualifications:
CII/PFS
CF1
CF3
ER1
HR1
AF1
AF2
AF3
AF4
AF5
IFS School of Finance
CeRER

Change to the equity release business area
As part of our ongoing work to improve the usability of our search criteria, we have made some changes to our product areas. The Equity Release product area will continue to be labelled ‘Equity Release’ in the top nine product areas, however the incremental qualifications selection criteria for this product area will now be divided into Equity Release (Lifetime Mortgage) qualifications and Equity Release (Home Reversion Schemes) qualifications. This enables us to ensure that we can continue to put enquirers in touch with member IFAs holding appropriate equity release qualifications.

Amends to the Mortgage subset labels
We have also updated the labels on the mortgage subset box to the following options:

• 100% mortgages is now High loan to value mortgages
• Refused credit is now Sub-prime mortgages

IFAP launches white label Find an IFA service for corporate pension schemes
Last month, IFAP extended its reach of Find an IFA searches by launching a new service, building free of charge, white-labelled versions of its search to sit on corporate pension scheme extranets and websites.

This ‘Find an IFA’ search allows pension scheme members to choose an IFA best suited to their needs and is entirely confidential. Using the new service within their own web space, pension scheme members can search from the 17,200 registered individuals on our database, all of whom are checked with the Financial Services Authority (FSA) on a weekly basis to ensure they remain authorised to provide independent financial advice.

Update of member phone number
We are pleased to tell you that the IFA members hotline number has been changed from 0870 325 9020 to 0117 972 3333.  We have been made aware that the previous 0870 number (although it was being charged at a national rate and we made no profit from it), was not included as a free number in a number of members’ phone tariffs. Please make sure you use the 0117 972 3333 number going forward.

Annual member IFA survey
IFAP conducts an annual survey, asking member IFAs about their experience of our ‘Find an IFA’ search and the services we offer. This year 1,796 member IFAs completed and returned questionnaires to us. Click here to view the results of this survey entitled "Member IFAs' perceptions of services IFAP offers (2008)". Here are some topline findings:

• 74% of member IFAs state IFAP’s ‘Find an IFA’ search has delivered between 1-11 leads over the last year (with a mean of 5.3 leads), this is a steady increase from last year
• The average IFAP lead is now worth £741 in commission (which is over £70 more than last year)
• IFAP leads are considered to be of high quality, clearly supporting our highly targeted ‘Find an IFA’ search engine approach – 74% of IFAs rate the leads received as good

Lastly, member IFAs tell us that after personal referral, IFAP/Unbiased.co.uk is now their most important source of business.

New sponsors
We are pleased to announce that IFAP’s has added three more sponsors to the existing financial services companies, supporting IFAP in promoting the benefits of independent financial advice to the consumer. Newly joined: The Hartford; Cardif Pinnacle; and, BPP are bringing the total number of IFAP sponsors up to 31.

Keeping independent financial advice in the news

TaxAction 2008
After the launch of our TaxAction 2008 campaign earlier this year, we have followed up our campaign with stories on the tax wasted by missing the self-assessment tax deadline or incorrectly filling out the tax form. This press release was in direct response to the government’s proposal to impose tax-linked penalties on late submissions of self-assessment forms.

Other stories looked at cash-in-hand payments and what Britons would like to say to the Chancellor.

Savings Brake
Our quarterly Savings Brake research, which looks at the ratio of how much we are borrowing, not including mortgage debt, contrasted with how much we are saving, shows that for every pound UK consumers saved during the first three months of 2008, they borrowed 69 pence. The research further showed that consumer borrowing soared by £22.4 billion in the first quarter of 2008, £13 billion higher than during the same period in 2007.

The bottom line

As you can see, the last couple of months have been very busy for IFAP and we will continue to work hard to promote the benefits of independent financial advice. While the summer months traditionally are quieter, we believe that the ongoing credit crunch and news and views within the financial services sector will provide plenty of opportunity to talk about the importance of seeking independent financial advice.

As always we will continue to keep an eye on the market and engage in any debates as appropriate. In the same way, we will review our ‘Find an IFA’ search on an ongoing basis to ensure it incorporates the latest industry movements and are as user friendly to the consumer as possible.

Over the summer months, we will have plenty of press releases and comments on all areas affecting financial advice. And we will of course continue to liaise with online media to place further white-label versions of our search and therefore your details on relevant websites and portals.

Do look out for our next issue of this newsletter for an Update on all of our activity.

In the meantime, if you have any feedback on this Update or any other issue then do please let us know.

David Elms
Chief Executive @ IFA Promotion