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TSC MPs warn of RDR abandoning IFAs

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MPs in the Treasury select committee have raised strong concerns about the effect of the RDR with some suggesting that IFA trade bodies are not doing enough to help older advisers unhappy about the new qualification requirements.

Speaking at a committee evidence session this morning, Aifa director Robert Sinclair and IFP director of operations Steve Gazzard were asked what they were doing to help older advisers, many of whom were constituents of MPs on the committee.

Committee member and Labour MP for Leeds East George Mudie said he represented constituents very unhappy about the RDR. Addressing Sinclair and Gazzard, he said: “I have a lad in his late 50s who has been in the industry for 20 years and you have left him abandoned because he is not passing the exams. He is out of a job.

“Is there an effort being made to get an assessment system that will rescue these lads and lasses who have been in this industry for many years and are now stranded and are not able to work in the future?

“You are saying there is a way forward but there are difficulties, are you intent on getting that way forward or is this just words?”

Sinclair told the committee that he agrees with the QCF level four benchmark qualification but suggested the “cliff edge” date to comply with the RDR is “unfortunate”. He said the industry has been unable to find assessors who could deliver work based assessment instead of formal exams.

Gazzard said that it is not something which had been raised to him by IFP members.

Sinclair told MPs the debate has been reduced to talk of exams and commission. He said: “It feels as though we have come down from dealing with some really fundamental economic issues within the industry and actually getting more savings and engagement with consumers, to a debate around exams and commission.”

Sinclair told the committee it is right that professional standards are increased but said he has concerns over whether the shift to level four qualifications by 2012 is deliverable.

He said: “We believe the aspiration to level four is exactly the right level for us to get to, but this cliff edge date at the end of 2012 amid the other cliff edge debates affecting the industry at this time is, I think, unfortunate.”

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Readers' comments (38)

  • It would be very wrong if the RDR proposals were watered down in any way. The public need knowedgable advisers and it would be an insult to those of us who made the effort to acheive the level 4.

    if you you are confident in your subject the exams are not impossible they just take effort. if you can't pass them then either you are not applying yourself or may be you shouldnt be advising?

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  • I'm still not sure what the exam stadrad is going to be for non IFA advisers e.g at the bank where clients are sold these Scottish Widows Bonds at 7% commission with no financial planning?

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  • Diane
    I think you somewhat missed the point. I can appreciate that it is in your own interests that the RDR continues on its race towards a brick wall but there is more at stake here than your own income and ego. And before you make assumption s about me I have no concerns about level four qualifications at all I just don't class gong collecting as a sport we should all engage in so willingly when it does little to help the public engage with us and do what they need to do. The RDR means fewer members of the public get to see us and that is not good for any of us.

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  • I am an IFA who has been in the 'profession' for over 20 years.

    I saw the writing on the wall near the beginning and first passed my AFPC and then became Chartered.

    Although I have some sympathy with the people that are struggling to pass - their lack of forward thinking and lack of desire to pass professional exams has come back to haunt them.

    I believe passionately that financial planning should be a profession - and I can't think of many/any other profession where a lucky day answering multi-choice questions would cut the mustard.

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  • Can we please stop talking about a "Cliff Edge"

    With the deadline over two years away (and it's not like we haven't known this was coming for a long time already), I think 'gently sloping shelf' would be more appropriate.

    Or perhaps we should extend it to 2030 - that way people will be able to rely on retiring to get them by and never have to worry about getting properly qualified at all

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  • Well said, Diane - couldn't agree more.

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  • I agree there is a need to get to level 4 and this is the minimum level it can go to. However, both IFP and AIFA have a conflict of interest in that they offer exams themselves so cannot be truly objective.

    I am pleased that at least part of the debate focussed on outcomes for clients (consumers) and how will the things in the RDR Including exams ensure better outcomes for clients. I am not yet convinced this has been answered in a concise manner and I am certainly not sure the trade bodies are taking up this point. With TCF it is easy to see that the regulator is trying to get better outcomes for clients and despite some concerns it is actually trying very hard to make sure the finance community does better for them - no problems here as this is actually good for business. However, I am not sure they are managing to be as clear and concise in the RDR message which is being hijacked by all sorts of interested parties which not only includes insurance companies, networks and software providers it also includes the trade bodies.

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  • It wouldn't be so bad if it was just a case of holding a leve 4 qualification - but even those with the CII diploma have a problem if they have not covered all 132 learning outcomes - again with the 2012 deadline. In fact, you can be 1 exam short of chartered status and still have over 40 learning outcomes to meet according to the CII gap-fill tool.

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  • Passing exams is supposed to raise the level of professionalism.

    Advisors who work for large organisations especially banks, have no problems passing these exams as their employers are able to offer them every assistance.

    However these same advisors are also the biggest offenders when it comes to unprofessional advice.

    Go figure...

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  • Sorry AIFA too little too late we have got on with it and represented ourselves!

    Still nice to hear from AIFA

    looooooooooooong last ZZZZZZZZZZZZZZZ

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