Advisers split in 'books in exams' debate

Why Not?

While not wishing to disagree with Keith (whose views I respect) I have been training IFAs for 25 years in one form or another. There are those that have a basic understanding, who would benefit from the ability to look up "details" and there are those that do not understand key subjects and the principles that apply to them. Books will not be of use to them. I have actually performed "experiments" on groups of trainees - the ability to access text books improves the score of those that understand the principles, but reduces the score of those who don't as they desparately try to look things up and either interpret them wrongly or just waste time.

Posted by: Tim Collyer

books and exams

Of course this should be allowed! the clever person (adviser) is not the one who knows, but the one who know's where to find out! This is why clients come to us! An IFA is doing the best job assessing a client's needs not being clever about products. Then the IFA will do research and come up with a solution to suggest a way forward to the client. What lawyer doesn't have shelves full of books for reference to help find a legal solution? Taking material in to an exam, of course, negates the need for the exam!

Posted by: Derek Vivian

Compromise

I agree with all the sentiment about testing the application of knowledge rather than the memory. The effective use of resource material is a core skill for ongoing competence - surely, this is a desirable outcome rather than the current proposal of "on that day the adviser demonstrated that they were able to recall sufficient facts". How about offering to accept a higher passmark in exchange for reference material based exams - it should be reasonable to expect people to achieve 80% if they have the resources at their disposal.

Posted by: David Reaney

A little more time is what is needed

For those who haven't yet had a try at taking the diploma exams, well have a go! They are not impossible but it does take time and application to study for them ... I have only done a couple so far and my biggest worry is getting them done in time for the end of 2012. Personally I think it would be much more constuctive (assuming that we all want a thriving IFA community) to try to get the deadline for the RDR put back a year or two, not just for qualifications but for the changeover from commission to adviser charging. Even the best organised firms must be quietly wishing they had a bit more time to get clients used to the concept of paying a charge (rather than the concept that commission arises out of thin air). It seems to me that there will be a lot of consolidation over the next few years and a real step change in standards and there is likely to be a shortage of experienced advisers. It can't be good to end up with lots of 'qualified' advisers but a shortage of experienced advisers who can remember the effects of the 1973/74 winter of discontent, the 1987 crash, the fall in annuity rates in the early 90's, the events of 911 (my best friend worked there and unknown to me had just got sacked ... which saved his life). Anyway I digress and I ramble ... I must be one of the slower IFA's mentioned earlier, but I do wish we had a more easily achievable timescale for RDR ... then I won't need to worry whether to take my books into exams or not.

Posted by: Wyn Davies

exams,exams,exams.

When I started work some 49 years ago for a chartered accountant his comments were "its nice to have exams but more important is the knowledge where to go for the answers to the question" There were two of us started at the same time one who could remember facts and figures like a machine and one that knew where to get the answers for complex issues. If my boss wanted answers to basic questions he wne to the one who had a memory for facts and figures off the top of his head but if he wanted more intricate research or answers he came to me as I knew where to look. I can remember now all of those bound manuals on his office shelves that I poored through for the answers and when I found them my boss(who was a qualified accountant) would often say he would not have know where to get started. Perhaps this will help those people who think exams are the be all and end all of education.

Posted by: terry arch

Which Books

Taking books into exams is not new. The idea is neither silly or rubbish. The Institute of Taxation, whose exams are I believe far harder than the PFS', has allowed candidates to take the tax legislation into the final exams for many years. Such books are only of use if the candidate is already familiar with the books and used to using them. If suitable textbooks could be identified i.e. not course books then I see no problem. Commensurate with this though would be having to raise the technical standard of the exam. I am not sure if this would achieve anything. It would however help the CII to word questions in a more direct way rather than the vague way in which some of their questions are worded. The technical content would be more detailed to make the exam a test on what we do rather than asking questions which sometimes are on the periphery of what we do. After all in the real world you do not want advisers giving advice from memory. This can only lead to problems. No I think the idea has some merit but the real question is which text books and will you be prepared for an exam at a higher level.

Posted by: Philip Corneby

Tolleys

It is a well known fact that other "professions" law and accountancy are allowed to take reference material into exams. I see no haarm in this and asked this question of the FSA 12 months ago, and again in the new model adviser feedback last month. I'm glad it's getting some discussion going. I do not think any less of my accountanty if he has to refer to a colleague or a manual to answer any question I have. The main thrust of this is that the FSA should be rooting out advisers who give poor advice, not penalising the ones who cant verbatim remember lifetime allowance calculations in an exam environment. What are we trying to achieve here? Surely a profession with good basic levels of competence who know how or where to get the answer to a specific question. Why do I need to know from memory the Lifetime allowance calculations? Hee in Swansea the biggest pension pot I've ever seen is less that £150,000!!!

Posted by: Richard Williams

DEATH BY A THOUSAND CUTS

RDR, level 4, stakeholder, TCF etc is all part of a regulatory "Death by a Thousand Cuts". The regulatory solution has become the problem. No one act kills the adviser but a combination over time will have the same effect. Independent Advice has been condemed to death by a court that supplies no evidence. FOR THE DEFENCE CONSIDER THE FOLLOWING: Dan Waters - Director FSAJanuary 2009 "The restrictions we impose on the industry must be proportionate to the benefits that are expected to result from those restrictions" Otto Thoresen - CEO Aegon "The RDR is only helping wealthy customers" AXA April 2009 "We will lobby the FSA to make sure the RDR does not mean less are able to access advice" David Cox - SuuqeaMarch 2009 "Two million clients could be left without an IFA after RDR - 40% could leave the industry" FSCC January 2009 "Financial advice will be less widely available post RDR" Institute of Financial Services "RDR will impair financial advice before improving it" Alasdair Buchanan Scottish Life November 2009 "Sales advice is a real cop out and extremely confusing to investors" Stephen Gay - AvivaJune 2009 "The regulator has failed to consider the danger of adviser charging limiting access to advice for those on lower incomes" Lord Lipsey "Consumers in the middle (not high net worth or money guidance fodder) to be sold products by banks under the contradiction that is sales advice" Walter MerricksChief Ombudsman "I think it would be unwise to count on the assumption that complaints from the retail investment world are suddenly going to go down as a result (of the RDR)" Deutsch Bank reportAugust 2009 "There has been industry talk of 30% or even 50% if IFAs exiting the industry post 2012, which is not impossible" Paul Selly HBOS "Bancassurers set to benefit" Richard Howells Director Zurich LifeJune 2009 "The big question mark is still around what benefit it will have for the ultimate consumer.I am still not convinced that all of these changes, when you sit down with a consumer and explain them, actually give rise to a consumer benefit that I can really hang my hat on." Martin Lewis Money Saving Expert June 2009 "There's a worrying possibility that the FSA is about to kill off independent financial advice in the UK for all but the wealthy. I do hope I'm wrong. I'm not convinced most people will want to pay for advice. The commission route has the advantage that you don't pay a fee each and every time you want information; you can go without the worry of laying out cash. What I find most galling though is that bank-based advisers - those primarily responsible for PPI misselling, endowment mis-selling, investment mis-selling and generally poor advice all round are still to be allowed to be remunerated based on the number of sales." Janet Walford OBE, Editor Money Management Sept 2009: "I am not paranoid enough to believe that the FSA has a hidden agenda to do away with small IFAs, but the law of unitended consequences may well mean that this will be the result. This is especially the case when set alongside the myriad of other proposals that are costing some £430 million to set up, with ongoing fees of £40 million pa thereafter, a mind boggling amount of cash. Peter Hamilton barrister, Source: Money Management Oct 2009, Scrapping the FSA by Marie Jennings MBE: "The Financial Services and Markets Act does not permit the FSA to cancel an authorisation simply because the FSA has changed its views on what the appropriate qualifications should be….It is one thing to impose new rules for new entrants to the IFA profession, it is quite another thing to disqualify someone who is already qualified." David Hazelton of Tax Incentivised Savings Association(TISA) 30/10/09: The RDR could be detrimental to consumers both in terms of higher product charges and an increase in the cost of advice, warns the Tax Incentivised Savings Association(TISA). Implementation costs for the RDR are being "seriously underestimated" and product charges will consequently have to be raised. Bankhall managing director David Golder 03/11/09: "We say write to the regulator, write to your MP. Do not let the FSA get away with some of the things that will lead to the widespread decimation of our industry." Robert Kerr, head of retail distribution development at Scottish Widows says: The RDR could have the unintended consequence of "disenfranchising" the majority of consumers from financial advice . "Our key concern is the RDR proposals will act to drive advice upmarket, with financial advice becoming the preserve of the wealthy leaving mass-market consumers un-served," Nigel Waterson Shadow pensions minister : "While no-one can object to raising the standards of training and competence, should an emphasis on exams take precedence over on-the-job training and experience? Is the 2012 implementation date practicable given the extra qualifications and changes in systems that will be required to be in place? Ivan Martin Bankhall Group executive chairman 01/12/09 said: “I believe that if the FSA doesn’t take the genuine concerns of the IFA community seriously, and soon, it risks leaving a legacy that will needlessly jeopardise the ability of millions of consumers to benefit from professional financial advice. It will create a crisis all of its own; an advice crunch, at the precise moment when Britons need advice more than ever before. Never mind the credit crunch, the FSA is risking an advice crunch.” John Redwood 01/12/09: "The RDR is like a sledge-hammer to miss a nut." Mark Dampier, head of research at Hargreaves Lansdown 02/12/09, says:"My personal view is coloured by the fact I am 53 years old. I have no intention of taking any more exams. I am fed up with it. If I have to sit the exams, I will retire or do something else. It is absurd. If I was a qualified accountant or doctor and someone changed the rules, and said you have to qualify all over again, there would be uproar." Clive Waller, of CWC Reserch 09/12/09, says the new qualification requirements are disruptive, distracting and disappointing. It is unreasonable to ask 60-year-olds to take a whole new set of exams. The study, by CWC Research in association with BNP Paribas, says qualification proposals do not match the original intentions of the RDR and the drift up-market will deprive the mass market of access to advice. Physician, heal thyself! Luke 4:23.

Posted by: Simon Mansell

books in exam

sorry do not agree with this,why not go the whole hog and take the paper home with you and send it back when finished , however having sat the exams you would not have the time to look up and answer all the questions in two hours as this is nowhere long enough without books ,i agree with increasing our knowledge /professionalism, but the whole level 4 cii exams are a farce , for the record i have passed level 4 having sat 4 J0 exams in last 18 months much to the detriment of my business , with the studying etc.... , my biggest gripe with this flawed qualification is if you do this properly you have to study at least 60-80 hours then everything hinges on a two hour exam and if you fail what about the study time it means nothing not even any CPD of any value to put to the FSA ,but on the plus side my level of knowledge has increased substancially , i thought i was a very knowledgable IFA until i started doing these exams , anyway good luck on your journey to achieve level 4 you will need it

Posted by: STEVEN CUSACK