22nd November 2016

IFAs and the Gig economy

A recent UBER court ruling has really put the cat amongst the pigeons regarding the status of self-employment within the workforce.

More union backed court cases are on their way to the UK employment courts over the coming months. These will include firms like CitySprint, Addison Lee, eCourier, Deliveroo and Excel who are also attracting attention in other areas, in particular the payment of a minimum wage.

Teresa May has said that the government is determined to build an economy that works for all.

Regarding the thorny issue of self-employment, an individual’s employment status is determined by the reality of the working relationship and not the type of contract they have signed.

With this in mind, it may only be a matter of time before so called ‘self employed’ IFAs, who are working under the registration of a firm that is not theirs come under the spotlight. 

For years, the financial services industry has seen dividing lines blurred when it comes to IFA contracts.

IFA employment status classification will depend to a large degree on the amount of control that the organisation has over the individual when they are carrying out a job.

A self employed financial adviser accepting client leads and servicing while exclusively acting as an authorised individual for that particular firm which in turn provides support, pays regulatory fees and assumes all regulatory responsibility for their actions, is more likely than not to be deemed an employee.

While IFAs would not necessarily think they are part of the ‘Gig’ economy, the Uber ruling, especially for those advisory firms that do not employ IFAs but take a share of their earnings, could have a massive impact adding yet more cost to an already financially and regulatory beleaguered ‘profession.

Just a thought.

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