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Paul Owen, Chief Executive of the Association of International Property Professionals (AIPP), explains why a trade association for the entire overseas property industry must combine a positive profile with strict enforcement of its code.
Q. What is your professional background, how relevant is it to the AIPP and will prospective members be convinced by your experience?
In terms of relevant experience, for the last five years I have been at the sharp end of sales and marketing for VEF - getting people to ring in and turning those calls into business. I now bring my own values and beliefs to the AIPP - quality of customer service, qualified personnel, honesty and integrity. Obviously I have to take these forward on a much bigger scale, but what I hope to bring to the AIPP is brand visibility and transparency as well, of course, as high professional standards.
I've done the 'hard yards' as well, with exhibitions all over the country, and appreciate that these are the purest medium for meeting potential clients and the industry. This is where we all learn and earn as an industry.
Q. What is your biggest hope for the AIPP?
My ultimate goal is that people won’t buy overseas property unless they see the AIPP logo displayed on the advert or the shop front. The AIPP will be the voice of the industry, setting standards of practice. It will allow members to say to prospective buyers: “We’re covered, so you’re covered”.
In terms of timeframes, my realistic aim is for everyone actively buying overseas property through recognised channels to be aware of the AIPP within 12-18 months. Beyond that, and promoting awareness to everyone else, it will obviously take more time.
Q. How is the AIPP funded?
Unfortunately, there have already been some rumours going around on this one and we have to put them to rest. The Association is funded by Membership subscriptions, not by contributions, or even loans, from individual overseas agents. Some companies involved in the discussions from the beginning have paid their Membership fees in advance pending ratification of their Membership. This money has enabled the Association to get started. There were offers of loans from individual agents but it was felt that any acceptance could compromise the independence of the Association; this must not be in doubt. Rumours quashed, I hope!
Q. What will the AIPP provide that FOPDAC and FIABCI don’t already offer the industry/consumer?
I commend the vision of FOPDAC in that it recognized the need for best practice and self-regulation 32 years ago; I commend FIABCI for the same reasons.
However, I feel that the profile of these issues and goals needs to be raised much higher for the consumer to take them seriously to the point that it will positively influence their purchasing decisions. Part of that profile will come from good marketing and total buy-in from the whole of the industry but it must also come from enforcement. Nevertheless, while the media only seems to highlight the unscrupulous, we need more positive examples of good professional conduct.
As an association the AIPP shouldn’t be bogged down with rules and rule-making but at the same time a key raison d’etre is to protect the consumer. This means that it should promote the value of its code and emphasize the significance of expulsion if members have crossed the line.
As I said, any trade association needs teeth but the AIPP shouldn’t judge until a decision on conduct is reached. A good example is the Financial Services Authority (FSA). Funded by the members it regulates, it has become increasingly visible for its enforcement and rigorous investigation. It is trusted by consumers and respected (as well as feared) by the industry. The AIPP needs to achieve this kind of visibility to effectively raise standards and impose self-accountability on the industry as a whole.
Q. How does an association equally represent the interests of members – who are all competing against each other – and the consumer at the same time?
As far as I am concerned there is no conflict because the AIPP’s ultimate goal is to give the consumer confidence and protection. It succeeds or fails on how far this is achieved. It gives this to the consumer by presenting a strong and united voice of professionals within the industry. The AIPP will represent the industry’s common goals with strength and purpose, taking the messages of professionalism and accountability to the public, the press and, if necessary, the government.
Competing companies within AIPP membership will all have the same access to using the AIPP membership logo but they won’t be using that as their central marketing message. Their membership supports the marketing message they deliver; it doesn’t constitute it. Our logo will show that they are bound by the code of conduct and, as such, agree to be disciplined by it if necessary.
The benefit to members is that more reassured customers will ultimately mean more customers. The most significant survey in the last few months was the one from Barclays which not only claimed that there were 2.2m people in the UK who definitely expect to buy overseas property, but that the only things holding them back were red tape and the fear of being taken for a ride. This is the perfect time to launch a trade association whose aim it is to reassure such buyers so that whenever they deal with an approved agent they will be assured that the individual is trained, qualified and bound by a code of practice.
Twenty years ago, when Spain and France were the main markets, such a code would have been useful but now, with the whole world opening up – and the new EU accession states in particular – a code of practice is vital.
Q. Designed to reassure the consumer through a collective and voluntary code of practice, will AIPP regulation restrict trade? If so, how can the proposition be made more attractive to members?
A voluntary code of practice will not restrict trade; it will restrict bad practice. It will restrict, and outlaw, outrageous and unfounded claims. The AIPP will be composed of like-minded people in this industry who are all aiming to ensure that the high standards they expect are the minimum requirement for the entire industry.
Q. How will such regulation be enforced, or marketed, to convince the consumer of its value?
Enforcement of the code of practice will take two main forms. The first is the initial requirement to join and the second is based on the demands of the consumer and pressure from an industry united by a single, recognised standard.
The initial requirements for membership will be defined by committee but will expect candidates to have at least three years’ experience and to possess all relevant professional cards. At some stage, I would like to set up a panel of insurers so members can get access to specific products at the most favourable rates. This is one element that will contribute to the consolidation of the industry and will also add value for members.
The second part will rely on the industry to look at itself, support best practice and condemn bad practice. Since the members agree to be bound by a code, and any disciplinary action, consumers must be made aware of their right to complain and be reassured that action will be taken if necessary.
If a member is accused of breaking the code they will be investigated. If a full hearing is necessary, the AIPP will refer the case to an independent arbitration panel. This avoids any accusations that we are just covering up mistakes by our members and ensures a fair hearing for all. If action has been taken – such as expulsion or a fine - the AIPP reserves the right to publish the findings.
Each member should promote, and display, to the public their regulatory obligations in a brief and easily understood way to satisfy the clients that they are accountable to the code.
Q. Will the AIPP ever lobby for statutory regulation of the UK overseas property industry, and when?
A. While the AIPP would not lobby, or sell, the idea of statutory regulation to the government, if the government showed an interest in the direct regulation of this market we would be the first to come forward to show how successful self-regulation has been and how the code has worked in practice.
Q. Is there a political will for statutory regulation at the moment, and what is driving it?
There have been rumours in the market that the government may be considering some form of statutory regulation. Concerns over the mis-selling of SIPPs have prompted the FSA and the Treasury to comment on the possibility. However, nothing concrete or defined has emerged yet and, if there is a proposal for regulation, it is most likely due to the billions spent on overseas property.
As the market has matured, and is now attracting a broader range of buyer types – some with more experience than others – the government has recognised the size of this burgeoning industry and the need to ensure good practice at home and abroad.
The aim of the AIPP is to promote existing good practice and satisfy both the government and consumers that overseas property professionals are qualified and fully accountable. The AIPP is really the collective face of what most people in the industry are already trying to do. The challenge is take that message to the consumer, give them confidence, and make the AIPP the official stamp of approval for the overseas property buyer.
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