No one, not even a trade association, is immune to the demands of competition and the pressure to demonstrate value. That’s why the Investment Funds Institute of Canada has recently been slimming itself down.

In June, IFIC announced that it was hiving off its education division into an independent, arm’s-length, non-profit organization. The effect of the move is to separate IFIC’s educational efforts from its trade association activities. At the same time, it sold its financial planning assets and associated intellectual property to the Canadian Institute of Financial Planners.

Joanne De Laurentiis, IFIC’s president and CEO, explains that it undertook these moves to put the education division — now called IFSE.ca — on its own and allow it the full use of the revenue it generates. Until now, the education arm has been subsidizing IFIC’s advocacy and other trade association activities. “It’s really a restructuring to put the education division into a more competitive and more focused education delivery mechanism,” she says.

By giving the education division sole control over its revenue, the expectation is that it will be able to devote more resources to course development, thereby empowering it to compete better in the business of providing professional education. The new stand-alone organization will provide mutual fund and life insurance licensing courses under the IFSE brand, along with continuing education. IFIC is the sole member of this new group, and it does have membership on IFSE’s board, but the two boards and the two organizations are now distinct.

De Laurentiis says the move follows what other trade associations have done in recent years. Examples include the Canadian Bankers Association selling the Institute of Canadian Bankers to Thomson Corp. back in 2004; and the Investment Dealers Association of Canada selling its education division, CSI Global Education Inc., to a private equity fund, ONCAP II, L.P., in 2006. IFIC is following this trend, which, De Laurentiis says, allows it to become, “a more focused unit that is really targeting the market, versus serving both a market and a trade association.”

While the move to put the education division into its own company serves the interests of creating a more competitive education body, it also means that IFIC — the trade association — gives up the financial subsidy that education used to provide. However, De Laurentiis reports, the trade association is now operating in the black solely on the strength of its membership fees.

And, while there have been a couple of high-profile departures from the organization over the past few months — most notably, John Murray, vice president of regulation and corporate affairs, who left at the end of March — De Laurentiis insists that it will not be cutting back on any of its core trade association activities: advocacy; the collection and analysis of industry statistics; and member services, such as hosting its annual conference.

IFIC has begun to take a more proactive approach to advocacy over the past 18 months, tackling significant regulatory initiatives such as the proposed sweeping reforms to the registration system, a planned new point-of-sale disclosure regime for both mutual funds and segregated funds, and ongoing issues such as fund governance, De Laurentiis says.

She notes that it has also restructured its committees to include more involvement from its board members, a move that is designed to generate more strategic, high-level input on the regulatory issues of the day, rather than dwelling simply on the details of specific issues.

“The devil is always in the details,” she says. “But we figure that if you can agree on the big picture, you can agree on the details later.”

Along with the focus on regulatory issues, IFIC is also keeping up its lobbying efforts with the federal finance department. In mid-August, it announced that its pre-budget submission to the standing committee on finance this year calls on the federal government to help low- and middle-income workers deal with the challenge of ensuring retirement security by encouraging greater savings.

To that end, it recommends that the government:

> follow through on its campaign promise to ameliorate capital gains taxes;

> implement tax pre-paid pavings plans, which would be funded out of after-tax income, but would not be taxed on withdrawal, a method of retirement savings that would be more useful than RRSPs to lower-income households;

@page_break@> increase the maximum annual RRSP contribution limits to $32,000 by 2010;

> allow the preferred tax treatment of capital gains and dividends within an RRSP;

> allow income from a RRIF to be eligible for the pension income tax credit and pension splitting below the age of 65;

> adjust the Guaranteed Income Supplement clawback mechanism to provide “reasonable marginal tax rates,” and exclude RRSP and RRIF income from the clawback;

> set up a special task force to examine retirement issues and identify possible solutions.

The one area that IFIC doesn’t intend to get into is direct public education. De Laurentiis says IFIC does not have a role in addressing investor confidence issues directly — such as assuaging investor concerns about the possible impact of the current liquidity crunch on their mutual funds. It doesn’t have the staff or the mandate from its members to do that type of work, she says.

What the organization does have — based on the input she has received in her time heading IFIC, and at its board’s strategic planning sessions — is a mandate to try to advance the interests of the fund industry with regulators and policymakers. Its members see value in an association dedicated to that task, she says.

“There is a strong view that there are unique issues concerning mutual funds, and that there is value for those in the industry to have their own table around which they can meet, and discuss, and reach consensus,” she explains. “As long as the industry is willing to pay to have their own table, that’s what it comes down to — if that willingness is there, and that interest is there, IFIC will exist as a dedicated mutual fund trade association.”

For the most part, the fund industry has demonstrated a desire for its own voice. The notable exception is CI Financial Income Fund, which withdrew from the association last year. CI’s CEO, Bill Holland, says that he hasn’t heard a word from IFIC since the fund left. “I don’t think it matters to them one bit,” he says, and it doesn’t matter to CI either. IE