So a letter dropped through my door yesterday, 13th October 2014, from the Institute of Financial Accountants (my governing body) stating that a proposal had been put forward to accept an amalgamation of the IFA with the Institute of Public Accountants (IPA) of Australia. Now I had already been privy to this information in my capacity as Chairman of the Hampshire and Dorset Branch of the IFA but what followed shocked me that I immediately resigned my position. Read on for my take on this IPA Takeover Amalgamate IFA proposal…
Takeover or Amalgamate?
So my first concern was over the wording of the letter. They (the IFA) refer to the merger as an “amalgamation” – this presents an image of a coming together of like minded people for a common purpose and jointly run operationally. What will actually happen is the IFA will change to a Ltd company with the issue of shares. These shares will be sold to the IPA who will have 100% overall control of the IFA – in my book, this is a takeover, not an amalgamation.
Total Overall Control
I do not think it will be long, despite the assurances from the senior management at the IFA, that the IPA will take overall control and the autonomy and brand of the IFA will diminish over time. The £1.3m in membership fee income will eventually be diverted to Australia (because the parent company will need it) and the budget (because that is what the remnants of the IFA will get) will be reduced over time to a bare minimum – enough to keep the membership going.
The staff at the IFA will also be reduced – particularly in the marketing department as this will all now be done through the team in Australia.
20th Largest Accountancy Body in IFAC
Yes, this will make the 2 institutes the 20th largest accountancy body in IFAC (International Federation of Accountants) with a combined membership of around 35,000 members but will it make any difference to UK legislation? The IFA believes it will give us a bigger voice and more “clout” – I disagree. I think the legislative powers in the UK will dismiss us as 2/3 of the membership are irrelevant to the UK. Yes, it might give us more voice at IFAC but really, the 20th biggest body? That means there are 19 BIGGER bodies before us with more “clout”!
Members can rest assured that they will receive a HUGE benefit from this takeover – reciprocal membership of the IPA. Great. Will be wonderful if we ever want to practice in Australia but in the meantime, it does not benefit me at all. Any other benefits? Uh, no! Apart from the IFA being given the use of much improved IT systems which do not really help me but it does help the Institute. So is there a member benefit to this takeover? Not that I can see.
Autonomy and Brand
We are assured that the autonomy and brand will remain intact. I disagree. Whilst the IPA cannot use those initials within the UK, there are plenty of other letters in the alphabet and as for autonomy? Of course, until the IPA decide they want something to happen and IFA management will roll over and do as they are told because the IPA own the IFA 100%. No “ifs or buts” about it. And as for IFA Council? This will eventually be disbanded because it won’t be needed.
I also fear for the Branch Network as well. This is an important aspect of the IFA providing networking and CPD for members. I am sure the IPA will decide that the budget can not extend to this valuable resource.
One Bigger Voice – Unless Your Voice Is In Opposition
So as you can see, I am opposed to this takeover and I wanted to express my opinion in the special edition of Financial Accountant magazine (the publication for members of the IFA). We, the Branch Chairs, had received requests from the IFA’s PR company, as well as the IFA itself, to lend support and provide testimonials for publishing. When I asked to submit my opposition statement, I was ignored. In fact, I still am being ignored. 35,000 members will be one bigger voice – unless your voice is in opposition though.
As a result of the way the management team have handled this takeover procedure, I have decided to resign my position as Branch Chair of the Hampshire and Dorset Branch and may even consider my membership of the Institute itself – but that will be decided when the outcome of the vote is announced (needless to say it will be a “YES” because it will be made to be a “YES”). So all 9,000 IFA members are asked to attend a hotel in London in December to cast their vote – like that will happen. So they will use their proxy vote, which will go to IFA management, who will sign it “YES” and the deed will be done.
Call me cynic if you like but this is how I see it – is this an IPA takover or amalgamate the IFA? Goodbye IFA.
I will do another post on this issue but will explain what I would do instead of blindly accepting this takeover.
You can read further thoughts and my response to the Dangling Carrots here.