After a lengthy wait, advisers finally had confirmation on the minimum CPD requirements in early January via the FSA’s PS11/1: Delivering the retail distribution review – Professionalism paper. Even though the new rules require fewer hours of CPD, the nature of the development required has changed. A number of the previous means to accumulate CPD points will no longer be valid and advisers may have to rethink parts of their training programmes.

The new rules state that all retail investment advisers have to undertake 35 hours of CPD annually from the start of the Retail Distribution Review (01/01/13). This represents a reduction over the previous 50-hour requirement, but the FSA is more prescriptive about how those hours can be taken.

The regulator has said that all CPD will need to be relevant to giving retail investment advice in order to count. This means CPD related to other product areas such as protection, or to areas such as personal development will no longer be valid. The FSA has also stated that 21 of the 35 hours needs to be ‘structured’. This will include courses, lectures, seminars and workshops. E-learning will count if it is 30 minutes or more in length. ‘Unstructured’ CPD could be research, reading or mentoring.

In practice, although the rules may seem more onerous, many advisers – up to 70% on FSA estimates - are already achieving this amount of CPD. However, the FSA also states that all CPD should be measurable and consider the learning outcomes of the RDR-diploma, which may pose more problems.

CPD needs to be fully documented - advisers need to record evidence of the CPD activity, the target outcome and how it was met and assessed. Firms are responsible for keeping records for individual advisers and will have to supply the regulator with data about individual advisers’ professional standards from the end of 2012. They will also have to notify the FSA if any adviser falls below the required standard of competence or ethical behaviour from July of this year.

Individual accrediting bodies will have additional requirements for maintaining their qualifications at level 4 and level 6. The IFP, for example requires 75 points per year to maintain competence at CFP level. The CII requires 100 points a year to maintain competence. Both bodies will also issue CPD accreditation to external bodies.

In most cases advisers have a number of options for initial and ongoing CPD. For example, Certified Financial Planners usually meet their initial CPD requirement through a 12-week home study course, requiring an estimated 70 hours of preparation. Both the IFP and CII hold accredited events for ongoing CPD – a one-day Principles and Practice of Financial Planning Workshop from the IFP, for example, is equivalent to 9 points of structured CPD. They will also issue CPD accreditation to external providers and both groups also have online options.

CPD providers and accrediting bodies are beginning to put systems together that allow CPD for more ready recognition and recording of CPD. For example, Techlink offers a system whereby online questionnaires automatically feed through into the IFP’s CPD recording system. Increasingly, there are adviser-friendly ways to ensure CPD is fully up to date and this trend is likely to continue.

Defaqto's free publications contain whole-of-market product data, contextualised with independent commentary to keep advisers up to date with the latest industry developments. Defaqto publishes guides, case studies, insight papers and service reviews to deliver the information advisers need on key sectors and products. These publications are CPD accredited by both the IFP and CII, making them a valuable learning resource.

An introduction to exchange traded funds

Defaqto's insight paper on Exchange Traded Funds looks at why these products are becoming increasingly popular as implementation of the Retail Distribution Review approaches. It also contains independent analysis of the ETF market and explores how ETFs can be used in portfolio construction.

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A review of platform service: Measuring adviser satisfaction in the platform industry

Defaqto's free review shows how advisers who use platforms rate the level of service they receive from providers. It also reveals the providers identified as the best in eight distinct service categories.

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A guide to passive investing

This free guide examines and analyses trends in passive investments to give readers an insight into how the UK retail passive fund and ETF market has evolved over recent years. It addresses key points advisers should consider when using these funds, including accessibility, due diligence and options around portfolio construction.

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Segmentation - the key to a successful advisory business

Our free paper on the value of pre-RDR segmentation contains independent insight on how financial advisers should approach segmentation and the benefits it can bring to businesses and clients.

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Case study: discretionary managed portfolio services

Defaqto's case study explores the ways in which on discretionary managed portfolio services can benefit advisers and their clients, with particular focus on outsourcing in preparation for RDR implementation.

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