Professionalism: A Q&A with the CII

Professional Adviser asked the Chartered Insurance Institute for its views on the financial advice market as we head into 2012. This week: Professionalism.

How can advisers expect help from accredited bodies?

The role of the accredited body is to issue Statements of Professional Standings (SPS) that verify the adviser abides by a clear code of conduct, holds an appropriate qualification equivalent to QCF Level 4 and follows a relevant and structured programme of continuing professional development (CPD).

Practitioners looking for support to become RDR-ready should not overlook the support offered by professional bodies. The CII and PFS provide a range of learning resources to help members through the transition, from a new fully RDR compliant qualification through to a bespoke online gap-fill tool. If advisers prefer, they can attend regional gap-fill sessions.

What will the financial advice market look like in 2020?

The financial sector has suffered a reputational hit following the economic recession and the industry is likely to feel the effects for some time.

We anticipate the impact of RDR reforms to be twofold; initially, the overall number of IFAs will contract as those who do not wish to continue or cannot meet the FSA’s RDR new requirements leave the profession; but then, as higher professional standards help to improve consumer confidence, there will be a greater demand for financial advice and we’ll witness an influx of talent as industry reputation grows and financial planning becomes an attractive career option.

We also expect a rise in numbers of Chartered financial planners and firms as practitioners look to further their learning and differentiate themselves from competitors.

Will consumers understand the qualification requirements for advisers?

Many qualifications that are well-respected in the industry remain relatively unknown to the average layperson.

This, coupled with a lack of awareness about RDR reforms (81% do not know of the new professionalism requirements) means there is some confusion among the public about how to assess the competence and professionalism of advisers and planners.

When, however, consumers are informed of the changes encompassed by the RDR, a third of people who said they had not previously used financial advice would consider taking it. This, reflected in the population at large, could lead to an additional 11 million adults who have not previously engaged in financial services doing so.

The implications are clearly positive but a shift in perception will only be felt if consumers are made fully aware of the changes. We believe that the impartial, public-facing independent body, Money Advice Service, is best placed to lead a campaign to promote, educate and re-engage consumers with financial advice with support from the FSA and the industry, trade and professional bodies.