Twenty years ago this month, the Independent Financial Brokers first staked out its position as the voice of independent insurance brokers across Canada.

A shift in the way insurance advisors practice their profession has helped the organization. When its predecessor, the Life Insurance Agents and Brokers Association was launched in May 1985, most insurance advisors were part of the rigid career agent system which was much more prevalent than today.

The organization’s mandate was to resolve issues that arose between independent agents and insurance firms or regulators.
Two decades and two name changes later, the original mandate remains intact, says IFB executive director John Whaley.

With large doses of vigilance, the IFB can safeguard independent practitioners, he maintains.

One of the most recent IFB initiatives was a letter calling on the Ontario Securities Commission to take responsibility for the cost of investigating Portus Alternative Asset Management.

In early April, IFB president David Barber wrote to Ontario Management Board chairman Gerry Phillips on behalf of IFB members who had referred clients to Portus.

The OSC issued a temporary order against Portus in February while it investigated alleged compliance gaps. IFB says it took the step to write to Phillips when Portus’s receiver, KPMG LLP, received permission to apply for a bankruptcy order, and transfer $11 million from a Portus bank account to an account out of which the expenses of the receiver and representative legal counsel will be paid.

“This is investor money,” says Barber, adding that the IFB is concerned that the investing public should not have to forfeit their savings in order to pay for a lengthy and exhaustive investigation.

Barber was elected president in April 1999 of IFB. “There were a lot of things that had to be done and a lot of stances that had to be taken that might not have been warmly embraced by everyone,” he says, pointing to letters he sent to the OSC and dealers, protesting so-called “desk fees” charged as one-time over-and-above mutual fund licence fees.

He defends his actions saying: “I saw that this was an organization that could protect my independence in the industry. The other advisor organizations didn’t seem to be pushing the envelope with respect to protecting the independence and standing up for the members when I took over the presidency,” he says.

IFB membership has grown to about 4,000 from 200 when it was first launched.
The membership boom of recent years, he says, is the result of advisor interest in the IFB’s errors and omissions insurance program and its educational programs.
About 80% of the IFB members have bought its E&O insurance, Barber told Investment Executive in November 2004.

Earlier that year, the IFB announced welcome news that its fees would not be going up for the 2004-2005 year. The IFB’s principal competitor, Advocis, boosted its 2005 membership fees by an average of 35%, resulting in a wave of sticker-shock among its members. It doesn’t seem to be a coincidence that Advocis’s membership is declining — now about 15,000 — while the IFB’s numbers are increasing.

Admittedly, some advisors are switching simply because they are cost conscious and prefer the cheaper IFB fees.

However, Advocis, which was created in 2002 when the Canadian Association of Independent Financial Advisors and the Canadian Association of Financial Planning merged, has taken on a focus that leaves many independent insurance advisors cold.

The fee-hike, says Advocis’s president & CEO, Steve Howard, is to build “a war chest” so it can take on the securities organizations to prevent “backdoor” regulation of insurance through the national regulator discussion.

The IFB has been keeping in touch with securities regulators regarding any impact of the “fair dealing model” on its members, says Whaley. Meanwhile, its focus is directed more at the day-to-day battles advisors have with the insurance companies. “There is a constant battle to protect the status of the independent,” he says. “The companies, through regulatory concerns or whatever, are always trying to tighten the noose.”

Otherwise, the IFB has been building its educational programs. It holds educational “summits” twice a year in Toronto, Alberta and B.C.

It also partners with the Investment Funds Institute of Canada and the Canadian Institute of Financial Planning. Members can take courses with either of those organizations at discounted rates. (For more, see: http://www.ifbc.ca/
education.htm.)