London is arguably the world’s premiere financial capital and yet most UK citizens are financially unplanned. There is a lack of buy-in from those outside the square mile.
The regulator is attempting to redress this through its Retail Distribution Review by creating a simpler regulatory landscape in which financial advisers will consider the whole of market on behalf of their clients without the conflict of interest arising from which provider will pay them the most commission.This should be reassuring for consumers but could be less so for those who would be financial advisers.
The regulator is also suggesting that there should be a step change in the professional standards and qualifications required of advisers. Those in the industry without the requisite qualifications might prefer to be grand-fathered in to the new regime but this option may not be open to them; the regulator is considering imposing the full entry via examination route.
Is a one-off set of exams imposed on an experienced practitioner the most effective way to raise standards? It is certain to impose strains on their business and home life and as our business is all about relationships this is unlikely to be ideal. Examinations also are not noted for delivering long-term changes in behaviour.
Something that could, however, would be a more rigorous CPD regime where practitioners would be assessed for their weakness and take on an appropriate programme of remedial CPD. This would form part of their business life, open them to new practices, and could promote business opportunities for them. Also, the longer term nature of CPD would be more likely to encourage a more enduring improvement in standards.
The financial advice industry needs to rise to this challenge, however, by delivering rigorous CPD. The pledge signed between the Chartered Insurance Institute, Institute of Financial Planning, Securities & Investment Institute and the Chartered Institute of Bankers in Scotland, to form a single, independent professional standards board for advisers, makes this possible.
By embracing a structured programme of CPD that supplements their skills, behaviour and knowledge, advisers can establish themselves as the trusted professionals they deserve to be, reflected by an increased uptake in the financial planning they offer, from consumers.
©2008 Defaqto Insight Team. All Rights Reserved.
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