AIFA open letter sparks fresh qualifications row

Res Ipsa Loquitur

I would refer the gentleman to your article of 4 Feb entitled "IT to IFA". A perfect example of qualified dabblers who are not going to add anything to the quality of advice. The guy is talking his own book.

Posted by: David Cowell

RDR Qualifications

It is all very well for those with qualifications to rubbish those without. We have 3 people in my practice. Myself with level 3 & practicing for 25 years. My PA of 10 yrs with no qualifications & plenty of knowledge & a newly qualified level 4 adviser who I need to go through every case in detail as although the exams are there the knowledge & experience isn't. My unqualified PA has far more knowledge than my level 4 adviser.

Posted by: Tom Jones

Perspective Required

Adviser Alliance holds a number of views pertaining to this. Firstly, no other industry or profession insists that existing staff, who have been deemed competent,need to take further examinations. CPD is the oder of the day for them. Just because a regulator has formed yet another new opinion does not mean that it should be used to effectively excise 30% of the exising IFA population. There are many types of adviser - some are qualified to the hilt and smug about it whilst other are realistic and work within their areas of competence. The FSA already has a way of dealing with this - it has a permission process where advisers wishing to advise on what the FSA considers higher risk areas (equity release, final salary transfers)need to pass dedicated exams and apply for the necessary permission. One would imagine that an extension of this existing process would resolve this nonsensical argument and ensure that cnsumers continue to receive advice from their existing IFAs. Secondly, why is it that a certain section of the adviser community wishes to divorce itself from the mainstream? Are they so obviously superior that only they can lay claim to the term 'adviser'? William E Simon said it best, “The citizen must be made aware that today a relatively small group of people is proclaiming its purposes to be the will of the People. That elitist approach to government must be repudiated.”

Posted by: Alan Lakey - Adviser Alliance

Real reasons

I think Keith Churchouse, of Churchouse Financial Planning, hits the nail on the head, self interest, "Why should we have gone through this and not everyone else?" You don't get better advice by charging fees, you get better advice from a better advisor. Just because someone can string the time out and do Unnecessary work that they can charge for doesn't make them better advisors. Happy clients getting their needs satisfied is what it should be all about. Experiencd advisors shouldn't have to keep increasing the qualifications they hold to keep doing the same job for their clients.

Posted by: Chris Glen

SEEKING PUBLICITY

Last week Steve Martin was making friends in Leeds with a view to building a Mini Network to sell on in the future, this week he wants to cause a rift with the IFA community. Next week he will be on the front cover of New model adviser and the week after that he will have sold his business and be on the circuit telling everyone how you to can build a succesfull fee based business..........all for the competitve price of £950......Seen it all before

Posted by: Experienced IFA

I don't get it

If an adviser has plenty of experience then they should be able demonstrate their expereice by sitting a 2 hour exam four times in the next 3 years. If not then their experience is not relevant and should be ignored. I have sat numerous exams since my O levels in 1987. The only exams I have ever failed are the ones that I didn't prepare well enough for. I passed a whole heap where my prep was poor too -mainly financial services exams. If you've got the experience then you should also have the knowledge. I fail to see how you can have one without the other. If not then stop deluding yourself and pick up a book. I started towards dip pfs in October 2005 as soon as the RDR was on the horizon. I realised the implications and sat my first J paper in April 2006. I achieved dip pfs in July 2009. I didn't work flat out, I didn't fail an exam and, more importantly, I didn't enter an exam unless I felt I was ready. My business partner didn't follow the same path as me and is now faced with the Dec 2012 deadline. The sooner you start the sooner you finish.

Posted by: Former Teacher

BIg business

Hope steve makes plenty of money from his business he and the other new model advisers still in business after thr rdr will need it to pay all the fscs levies in the future. Hm let me see how much is £100000000 between 7t housand or so advisers. Not to worry they will have plenty of money from all those big fat fees their qualifications allowed them to charge.

Posted by: LOL

Isn't it shocking and disappointing...

... the way that self righteous individuals can claim to be shocked and disappointed when they want a bit of free and easy publicity? Give it a rest Steven, we've heard it all before from Andrew Fisher. Persist with your posing and we might start analysing the clay content of your feet just as we did his, with very illuminating results. A lot of the so-called 'drive for professionalism' is nothing more in reality than a drive for self-justification by those with an inflated opinion of themselves, along with a similar justification for inflated charging of course. When these prima donnas have created their 'perfect world' we will end up with a financial services industry that mirrors the disastrous economic model of premiership football, where the masses are screwed, priced out and exploited for the benefit of a relative handful of self regarding popinjays.

Posted by: Neil F Liversidge

To: "I don't get it - Former Teacher"

The point that is often missed is this: someone with a lot of experience should be able to pass an exam with ease, so at a theoretical level that argument is virtually impossible to argue against. The facts may be different and that is where reality meets the devil in the detail. The exams are probably not and maybe never have been total reflections of the advice given... it is true you are not supposed to cross your hands when driving and will be tested on that premise, but when you have learned to drive and you drive around say a race track at high speed the professional track drivers do cross their hands in order to achieve their job quickly and efficiently and also toe & heel whilst driving, another thing you would be failed for in a driving examination on the road. Many advisers form many differing solutions to the same client problem (different circuits at different speeds, as explained above) and the premise that ONLY one solution is the correct one is largely false..but only experience hones the ability to grasp that nettle and wrestle with differing solutions on a per client and per circumstance basis. The trouble is, the exams are not (AFAIK) set by a wide and considered consensus of adviser views on best solutions across the range of possibles, so why should the answer expected in that exam by the best, only or absolutely correct solution ? The REALITY is the exams advisers are being asked to sit are more about passing exams by trying to figure of what THAT examining institution thinks is the right solution... so it's about exam technique...not "knowledge". As a former teacher I'm sure you should understand how to pass exams and exam technique, but that doesn’t mean you should denigrate those fearful of educational waters who may be otherwise at least as competent as advisers. The client's I sometimes had most discourse with, rather than advice to, were teachers who read “consumers” magazines whilst I was an IFA (for nearly a 1/4 of a century). The reason was they read very basic info' and thought they knew what they should have, but if my advice - based on experience AND current market knowledge, meant suggesting/advising a different solution they may have thought me wrong.. and it often became difficult to explain their best solution may differ from that they had read at a general level only. Can you see the issue...because until that is fully discussed and a solution found the subject will always cause a divide rather than a way forwards for all ?

Posted by: Former IFA

Word for word

I could have written what Neil Liversidge has above and I agree with what "Former IFA" above has said. I was merrily going down the road of studying for my DIP and will continue it at my OWN pace. my objection is to being told to do it or else. That simply makes me stick my feet in. It also shows how poor salesmen some of the exma junkies actually are as the only way they can "sell" us the idea of taking exams which may be totally irrelevant to the work we do for clients is to tell us to. Anyone who has ever had any sales training should know telling someone what they must do is never as successful us helping them see the benefits of "buying" your products (in this case better quals) so they make the decision to buy... We keep getting told we need to work out our exsit stategy for our businesses and key seeing these high profile IFAs banging a drum and then eitehr selling up or collapsing leaving a debt that the FSCS has to meet and in turn those of us who are just happy to plod along. I actually considered selling my business last year, NOT because I have had enough of doing this job and becuase I have complainst coming out of my ears (I've had one since 1998), but becuase I am fed up with continual changes of govt policy and being told what to think (and that is what some of the exams are like). I AM an Independant Financial Adviser and ceased to be tied as once I knew what I was doing as a tied adviser I realised what I was being told to think was often plain WRONG. Instead of you Financial Planners trying to hijack the term IFA by forcing the broad church which are IFAs to become Financial Planners, why don't you just market yourselves better as being such wonderfully better qualified chaps than us and if the general public think you are any good, they'll come flocking to you. The problem is I suspect a lot of you are not actually that good salesman (and salesman should NOT be a dirty word) as you have a duty of care to sell an idea to a client if you believe it is what they should do. So far both the FSA and CII seem to be failing to sell the idea of parts of the RDR to an increasingley large part of the IFA community. The worst thing for me is the aims of the RDR are actually quite laudable, but that the problem when you let buracrats, teachers and accountants have teh biggest voice and ignore the fact pensions and protection have to be SOLD as do most intangibles.

Posted by: Phil Castle

AIFA open letter

WOW...I think it is fantastic that an individual can spark a debate like this and I thank you Steve. Great advertising too.But how incredibly elitest on so many different fronts? It is a shame that Mr Martin's "clearly superior intelligence" has not manifest itself in providing him with an ounce of insite into the industry that he works in. You are completely missing the bigger picture. In the current financial climate, RDR, fee charging and in particular "professional qualifications" are streamlining the industry perfectly to become an easily "VATable" comodity. Sorry Steve, but your head is over the parapit. Would I join your network...Hmm...No. But I wish you all the best in selling it before 17.5% of the value is wiped. I am sure you will disagree, but time will tell.

Posted by: An insider

commission or fees etc

The comment from Mark Lloyd about fees and commission is exactly right in my view. I do believe the FSA should be reading all these comments for they are a good source of consultation for RDR and all other FSA consultation documents. The FSA is slowly strangling the advice industry and forcing many long serving IFAs out of their jobs. This could be construed as forcing early retirement which I thought was against Government and EU policy! There is so much more to all this than what qualifications are needed to be a good honest (even ethical!) adviser who is totally independent and clients are happy to use. As I say often now a qualification doesn't make a good adviser no more than a particular make of car makes a good driver!

Posted by: Derek Vivian

Room for All

Not being the best of people to take exams I have gone along with what is required in the past and have to get 60 points to qualify for QCA Level 4. Should not be too hard in two and a half years. However, our industry should quit bitching about everything particularly professionalism, fees v commissions. There is a case for both. Yes some clients require a high quality service and highly qualified advisor or should I say knowledgeable advisor. However others simply require the best pension which is probably simple and cheap. As we all know clients can be their worst enemy and both need advice to get it right. Thus their is room for us all in this industry and we should concentrate on fighting the regulators and government who keep moving the goalposts on everything we do. Exams and education is not the real issue it is the rest of the rubbish we have to put up with that is so quit bitching and lets concentrate on the main issues which make our industry much better.

Posted by: Bob Donaldson

Breath taking

Steves letter is breath taking in its arrogance and self serving in its intention.

Posted by: Mervyn Thomas

The educationalist

I've been thinking - never a good thing - and I thought the following. Who should I send it to? Dear .......... I was dismayed by the decision to introduce formalised examinations over and above those already in place for financial advisers. The premise for this dismay, you may be surprised to learn, is from the point of view of an educationalist. I am responsible for a generation of enquiring minds and my choice is simple - fill them with facts or fill them with wonder. The former can be looked up on the internet in a matter of seconds by almost every pupil under the age of 18. The latter is the black art that teaching has had to become. Enquiring minds find solutions; those that can regurgitate facts based on outdated data can do, but lack the innovative spark needed to stay ahead. For this country to maintain its dominance in financial services we need to stay one step ahead of the competition. An enquiring mind does this effortlessly. The desire to produce examinations stifles this enquiring mind because there is only one solution for the examiner to mark against. Oddly enough the exam board may believe they have the best solution but the regulator's disagree*. What appears to be happening is that a new set of standards are going to be introduced with no way for the IFA to know whether the ideas set out in the coursework will be given any credence when the crunch time comes - i.e. when a complaint comes in. When an enquiring mind comes across this sort of anomaly it balks; it questions; it disagrees profoundly. The Legal profession deals with enquiring minds in the best way possible - it allows them to have their say and to argue the thing out publicly. What open court is available to IFAs? - IFADU have had to pursue the right to open hearings for some time now and it appears that they will have to fight for the right a little longer. Assessment for learning is the ability for a pupil to look at how well they are doing as they progress BEFORE they attempt any significant examination hurdle. This ethos of knowing if you are doing things right or wrong is anathema to financial services regulation - if an IFA asks the FSA if they have correctly addressed a problem in advance - FSA will not give firm answers - evidence is in the public domain and can be found if IFADU is asked for it**. The evidence so far in the industry is that the regulator neither is aware of the real issues [what happens in practice rather than the right sounding words on a wet Wednesday afternoon meeting where a good decision relates to how well a Board member has fared against a rival - without thought for how much damage has been done to many innocents not in the room] nor does the Regulator care. The children of today have a very acute understanding of what is right and wrong. They also have enquiring minds. I understand that the current Regulator wishes to introduce an examination system that tests the ability to answer out of date questions rather than examine an ability to adapt to the ever-changing marketplace. I also understand that the regulator wants to make this examination a threshold standard. Being told in an exam that there is a direct rationale for a product and that is the basis for being given a license to trade would make most people think that by following those rules you could be allowed to progress in the industry, perhaps even enjoy the fruits of one's labours. To be told after the event that what you were examined on was not true would suggest a lack of respect towards the examinee that undermines the requirement for an exam in the first place. I never refer to my pupils as Kids - they find it patronising (that means talking down to people) - instead I call them Ladies and Gentlemen. One pupil confronted me about a minor issue (not uncommon with intelligent children) and said that I didn't respect her - I asked: what do I refer to her as? When she realised that I always thought of her as a Lady, I suggested that she went away and came back, asking if I had at any point ever treated her with anything except respect. She came back feeling a little ashamed and I told her not to be - she is a child and is still growing and one day she will not need to fight against a lack of respect (being "dissed" is the vernacular). To be able to communicate in this way with a pupil demands a consistent and honest approach to all dealings with the person (pupil) in front of you - an important lesson for the Regulator if they too want the respect of the regulated. I ask that the regulator thinks a little bit further ahead than their next wet Wednesday's afternoon meeting and thinks a little more carefully about who gains from the proposed exam regime. Is the Regulator giving a consistent approach to all future dealings with any with clients? Is this a sign of respect towards IFAs? Could it be that FSA has finally grasped the crown of leadership and accepted that by stating that the exams are necessary they are also saying that they have value? - If they are then look carefully at what that value truly is. Think carefully about the following: Should those that take the exam and always follow the procedure set out in the exam coursework should always be put forward as exemplars of best practice? If they have followed the procedures set out in the exam should they always be granted immunity from prosecution from FOS (or the next variation on a theme)? Always is a loooong time. If at this point you are thinking, "perhaps we should include exams more frequently" be clear to all about who will be examining the regulators that preside over decisions about complaints? Will the Regulator finally accept that the rules regarding sales at the time of the sale prevail in a complaint? FSA state that the previous Ombudsman's or equivalent rules apply for sales preceding the incumbent Ombudsman - the reality is the opposite. If you don't believe me - check with IFADU for examples - there are many. Who is able to identify what rules apply? Who took the right exam at that time to deal with a case? If the case arose from a sale in April 2010 and the rules changed in July 2010 (I've given two months clearance there) but the complaint does not arise for 10 years - can you (today's regulator) say to the enquiring minds of today that in 2020 what they were examined on in April 2010 was not correct? Is there a guarantee being given? Treating customers fairly is an ideal but so is the idea that the examination system will right the problems being experienced today in the future. An enquiring mind will find you out and will bring you to account - as a teacher I know this as a given. It gives me comfort - I hope it does you as well. Yours, Richard Wood *Cases brought before FOS have been decided against because a single person taking out their first mortgage would have been incorrectly advised because they had "no need of life cover". Ask IFADU for evidence if you do not believe me. Oddly enough this directly contradicted by the then main examiner: "When assessing major protection needs, such as in relation to a mortgage, it is important to realise that these arise from the existence of a liability; the need is there, regardless of other circumstances connected with the mortgagor such as occupation, income or health. These other circumstances will naturally affect the underwriting of a protection policy and whether the mortgagor can afford it, but they do not affect the underlying need for protection, which remains." Chapter 1, Page 6, Financial Planning Certificate 2 Protection, Savings and Investment Products, Course Handbook C Chartered Insurance Institute, 1994. "If the client was single with no dependants, the adviser will normally be able to identify the likelihood that he will have very little need for life cover...... .....the need for life cover might only extend to the cost of a funeral, although cover should always be effected for any loans." Chapter 8, Pages 8 & 9, Financial Planning Certificate 1 -Financial Service And Their Regulation, Course Handbook C Chartered Insurance Institute, 1993. ** http://www.publications.parliament.uk/pa/ld200304/ldselect/ldconst/68/68we71.htm

Posted by: Evan Owen

Oh my gosh

I've never come across any research that correlates higher qualification with better advice in the financial services industry. I have been told not to blind clients with science - which suggests a possible negative correlation. But suddenly I have come across information that does put me on my metal. I am told by PA that Professional Adviser has a weekly circulation of 14,000 "1-12 month old readers" (sic). The next generation of adviser is on its way, and its likely to be far more knowledgeable that I ever was. I couldn't even read at that age, let alone understand the financial press.

Posted by: Glen McKeown

Experienced IFAs about to be dumped!

Having read all the numerous comments that were atirred up by Steve Martin's article I have an idea to possibly resolve a lot of the potential problems that will be caused by the implementation of RDR. It is an 'Articled Adviser' similar to an Apprentice, but for professionsa whereby a new IFA would be mentored by an experienced adviser. This would mean those IFAs who have, say, over 20 years' experience and for whom taking a new qualification is not an option would be paid a fee (not a commission!) to 'teach' the Articled Adviser the 'ropes'. There is so much more to advising a client than is taught in the exam prospectuses and the best way to gain this is by being 'shadowed' by a highly experienced IFA. This would do two things: give IFAs a way to put back into the advice industry their experience gained and at the same time allow new advisers to add to their degree level qualification the 'real life' way to advise. This could be an amendment to the RDR paper or something product providers could instigate and fund at least for the start up costs. IFA firms could be charged a levy for the Articled Advisers they want to employ and it could all work much as it used to for apprentices.

Posted by: Derek Vivian