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Categories:Advisers,Regulation

Are we overlooking the value of experience?

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Qualifications are important but don’t overlook experience.

Not a day goes by without the RDR and the professional consequences of its introduction dominating the press. Do we all have the “right” qualifications? Can we remain independent? Have we done enough CPD and gap-filled on regulation, ethics and building society deposit accounts?

While I completely accept the need for the industry to become more professional in the eyes of the public and agree completely that we need to demonstrate procedural knowledge, I wonder if we are missing the point by setting purely technical or educational standards and potentially overlooking the value of relevant experience.

A well rounded financial adviser is a people person, as are most support staff. But we are not taught people skills on the whole, we acquire them by varying means. Some individuals are natural communicators, others learn by example, from George Kinder perhaps, or simply from trial and error.

I reluctantly hark back to my military background. I was 19 when I went to officer training college. Along with Queen’s Regulations, RAF law and in-depth weapons training, we were taught how to manage delicate situations, that is, how to break bad news, negotiate, arbitrate or deal with varying personal circumstances.

We were given a specific technical framework appropriate for the strategic role undertaken but also taught the soft skills needed to cope practically and diplomatically with difficult issues.

I was green behind the ears when I graduated but there was always a sergeant on the sidelines to mentor and coach those of us with less experience. These senior personnel were and are the crucial backbone of the armed forces, helping to form the careers of many a young recruit. I did not realise how valuable those transferrable skills would be.

But are we now about to lose a backbone of experience from financial services?

The PFS and other websites are crammed full of useful technical information, gap-fill, libraries and online seminars but should there be more practical direction?

e can seek our own assistance from other business development professionals but it is not a natural inclination to do so. We are more likely to turn to colleagues.

Going back to the military analogy - you need to understand the mechanics of a weapon before making a moral judgement to fire it. Soft and hard skills - they both definitely matter.

Fiona Sharp is a chartered financial planner at Almary Green

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Readers' comments (20)

  • You can't expect a failed regulator like the FSA to understand or comprehend 'experience' as it is not something they can relate to from their Ivory Tower in Canary Wharf

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  • Ha!
    Experience counts for nothing with the Mandarins at the FSA who do not give a tinkers curse whether advisers can meet their draconian deadline.

    If we have learned anything from the dramatic systems failures in the recent November and December exams, it is that the current deadline is raising issues of concern with regards to the Health and Wellbeing of advisers who are now under so much stress when trying to maintain business levels for profitablility and study and take these daft exams.

    The deadline is wrong and needs to be put back by a year.

    Then no one will have any excuses not to achieve the requisite level.

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  • Good article Fee and the simple answer is yes we are! The consequences will only become measurable over the next few years ..... but by then it will be far too late!!!
    I wish all of those left in FS all the very best of luck. Myself, after 33 years, I'm about to turn the lights out and that decision means 5 advisers with a combined service to this industry of over 130 years will be out of work along with 4 admin staff. Just brilliant!

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  • It does not matter what industry you work in, experience is important. The FSA think by flashing a levekl 4 certificate you are going to be the best adviser since sliced bread. After 2012 no one is going to enter the industry if they are going to have to have level 4 before being able to practice. The government are pushing for apprenticeships, which is the same as having non level 4 person practicing with a mentor untill they have passed, or for those people come 2012, who are mid stream towards level 4, being mentored by someone who has. The problem there is the person who is being mentored may have more experience that those with level 4, but hey ho if it keeps Financial Services operating with every member of the public having access to independant advice, it does not matter

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  • Yes this all makes depressing reading; I have managed to obtain Level 4 and this has cost me a lot of time and money and will it bring additional business? I think not. For those who are willing and able I feel there will be a place for an IFA post RDR and that will be to service a smaller but more wealthy client group. I only expect to be in the business for about five more years but, if I was 20 years younger, would I consider a career in this industry? NO!

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  • Do not be reluctant to hark back on your military background. It is a stupid young officer who goes out into the field / air / onto the sea armed with 'knowledge' and 'authority' and thinks that is sufficient. The right experience, which at that stage can only be gained from others, is vital. That is just as relevant in the financial world.

    As a reservist I have found that my military skills enhanced my civilian skills AND those civilan skills also helped on my military life.

    I have seen life offices retiring early those people with experience, particularly of past contracts, to the detriment of advisers. I also feel more comfortable when being advised by someone with practical experience of the issues that interest me, rather than some high level exam pass. As a Compliance Consultant I see letters written by very well qualified by examination advisers, whose lack of experience shows when they try to explain issues to clients.

    It is difficult for the FSA to bring the need for experience into the regulations; but it should try to ensure that the rules it brings in do not mean that those who have the experience will leave the industry.

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  • An extremely pertinent piece very well presented. Thank you.

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  • People have been argueing until their "blue in the face" that experience and not Exams is the key to quality advice, but all regulators are deaf.
    Just ask the simple question? How many advisers plan to remain in the industry? How many have already left? and how do you pass on the costs of Examination when we all know that income will drop like a stone. Being Chartered but bankrupt is the Holy grail to the FSA
    he simplest route would be to assess the quality of the advice that advisers already give to their clients, examine the diversity, look at tax avoided, did the advice intergrate with the clients Legal & Accountancy requirements: Has the adviser been subject to an adverse number of complaints?
    IF the all the above are positive, i'd say the advice and the adviser was tip top. - job done. Too simple, but very cost effective.
    .

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  • Good article. Passing exams has always demonstrated your ability to pass exams...nothing more. This industry is, and always has been, a people business however you cannot empirically demonstrate people skills so the regulators will tend to ignore them. I get the feeling that our Lords and Masters in Canary Wharf would prefer us all to give 'guided advice' while paying lip service to independence. Welcome to the new world where IFAs will morph into form filling, mindless automatons.

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  • The problem is that all of the common sense, and the hard earned experience that goes with it is not in the FSA, and they will never accept anything other than the exams as proof of competence.
    As an RAF pilot, and subsequently as a commercial aircraft captain, I too learned most from my experiences, mostly from my failures and my successes. Interestingly, I also worked quite closely with another government 'authoriry' called the Civil Aviation Authority (CAA), and I have to say that the FSA could learn a lot from them. In particular, an aircraft operator can discuss their particular operations with an assigned CAA operations inspector (who is of course a pilot himself, with loads of actual experience), and if needs be, edit their operations manual, so that it complies with The Air Navigation Order to the satisfaction of the CAA. This very open, two way flow of practical issues and day to day real world operations, is regared as a significant contribution to flight safety, as reduces errors, and leaves little or no room for doubt or innapropriate interpretation. So, based on the EXPERIENCE, I run my IFA business with an 'operations manual' based on the CAA model that eveyone follows. But guess what? The FSA aren't interested in discussing it with me, or how it helps all of us to be more compliant. So much for experience being used to actually abide by, and comply with the FSA rules!

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