Buying the Association of Professional Financial Advisers was "stupid" as it was 'completely defunct', a senior spokesperson for Pimfa has said.
Speaking at the Gunner & Co roundtable on consolidation, Richard Adler, the chief commercial officer of Pimfa said the organisation was fully aware of the difficulties and complexities involved with merger and acquisition activity.
He said: "We've been through it ourselves. You may remember that [in 2017] we [the Wealth Management Association] - stupidly in my opinion - bought Apfa, which was defunct, completely defunct, and a nightmare to integrate, for want of a better term."
Adler added: "It has been really difficult to do anything with [some] IFAs. I now [rarely] do face-to-face with small IFAs, because once you get to the membership costs, it's the end of the conversation.
"Nationals and networks - that's a different story."
However, some smaller, directly authorised advice firms have joined Pimfa recently, including Ray Tuffield, founder and managing partner of recent member IFA Courtney Havers, who has also been welcomed onto the Pimfa board.
M&A impact on membership
Responding to a question about how M&A affects membership organisations, he added: "We lose a lot of directly authorised IFAs through M&A. We're down to about 32 [directly authorised] members, largely because it's 'retire, sell, retire, sell'."
He said this was largely because many older advisers do not want to deal with the capital liquidity requirements or want to get into the world of hybrid advice, so they decide to sell and retire, rather than carry on.
However, if they sell to a larger firm, this could be a good move for membership bodies, he explained, as generally larger firms will want to be members of organisations such as Pimfa.
But where M&A becomes more of an issue is where the larger firms such as wealth managers consolidate, as it means Pimfa loses membership, either because two members become one, or because the member gets integrated within a non-member firm.
He added: "It's a disaster for us - if we lose a member [as part of an M&A deal], it's a massive loss. So we are right at the heart of it."
A spokesperson for Pimfa said: "When undergoing M&A we experienced similar issues to other organisations and had to deal with several challenging logistical and operational issues - especially around data migration.
"With regards to M&A more widely, when two large organisations merge within our industry there are ramifications, as there would be for any member organisation.”
Historic issues
Issues around the APFA/Pimfa merger were highlighted in 2017 and 2018 as members were asked to vote on the merger.
At the time, as reported by FT Adviser, the former Apfa head Chris Hannant and Pimfa chief executive Liz Field assured advisers that the organisation had a specific financial adviser committee that looked at the skills and business issues of the sector.
