CII says high cost will hit alternative to exams
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The Chartered Insurance Institute says it developed an alternative QCF level four assessment following pressure from the FSA and advisers but warns it will cost double the price of exams.
Speaking to Money Marketing, CII chief executive Sandy Scott says he does not think the alternative option will be popular with advisers.
He says: “We are offering an alternative assessment because we came under quite a lot of pressure from the FSA and IFAs to provide one.
We will need a troupe of examiners for each individual that takes the assessment, so the cost to advisers will be at least double the cost of traditional exams. I do not think they will be popular.”
Scott says he has some sympathy for older advisers who only plan to work for another five or 10 years but he says the FSA is firm in its final rules.
He says: “The FSA have to set a deadline and if they gave even the slightest hint that they might shift the deadline, advisers would delay taking action.”
Scott says he believes around 80 per cent of advisers will get a QCF level four qualification by the end of 2012.
He says the remaining 20 per cent will simply choose to leave the industry. He does not think they will be forced out because the deadline is unachievable or the exams are too difficult.
Scott says the CII has a market share of around 98 per cent of all studying IFAs but does not approve of monopolies.
“I do not think it is a good thing to have a monopoly because it tends to turn in on itself and look like a guild,” he says. “Some people say we have a monopoly, but they are wrong.”
Scott does not think there should be a single, professional body but adds he does not feel under threat of losing members to new or existing players. He says: “Under the RDR, more people will become members of professional bodies so the market will expand but we will continue to be the market leader.”
He recognises that the CII is not always popular with IFAs but insists that those who complain about the institute are the ones failing exams.
He says: “We have an incredibly strong brand outside the UK and a pretty strong brand in the general insurance market. Then we have a weak brand with IFAs who fail exams.
“Of course, when I read negative things about the CII, it hurts and I think we need to do more in some sectors but we will not play to incompetent advisers.”
On professional standards, Scott insists that any committee overseeing advisers should operate independently of the FSA.
In December’s consultation paper on delivering the retail distribution review, the FSA said it would scrap plans for an independent professional standards board in favour of an internal supervisory model.
The FSA estimates that, while set-up costs for an internal model would be broadly the same as for an independent board at £2.8m-£3.5m, the internal model will be £1.5m a year cheaper to run than an external model. It says it could supervise professionalism internally for £3.5m a year, compared with £5m for an independent model.
But Scott says he supports a “lean and fit” independent professional standard board, which would not necessarily cost more than an internal model.
He says: “I do not know that you can automatically tie in the fact that a board is independent, with increased cost. I advocate a lean and fit independent professional standards board because I do not think that people have much faith in the regulator.
“Various consumer bodies and the Financial Services Consumer Panel have said they would prefer an independent professional standards board.
To gain the confidence of consumers, the board should not be run by a single professional body and needs to have at least half the board from outside of financial services.
“We have to be clear about the benefits that professionalism will bring to clients and to the market over time.”
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Readers' comments (10)
Incompetent Regulators Awards Team | 12 May 2010 4:28 pm
Oh yeh! Will that be the end? I don't think so..........They will ask for more exams later don't you worry. They have already gone back on their word so they will again. And for the CII, more coffers for them again and again.
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Anonymous | 12 May 2010 4:46 pm
Scott - may I add that IFAs only pass these over priced exams should they use other resources outside the CII's standard reference material. If the guides were written in plain english then the pass rate would be higher and subsequently your brand strengthened. But that wouldn't help with the coffers would it!
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Blair Cann | 12 May 2010 5:23 pm
i)Why is a troupe of examiners required for each individual? ii)What part is CPD going to play in the transition from 3 to 4? iii)On what basis does Scott suggest 80% will take exams and 20% will leave the industry? When the Chief Executive of the FSA was asked this question by the Treasury committee he was unable even to give a ball park figure as to the number affected let alone who will leave; and a survey by Aviva put the figure of potential leavers much higher. This sounds as if it was plucked out of the air.
As a Certified Financial Planner I have no personal axe to grind but if what is said about the alternative to the exams is true then the CII need to go back to the drawing board and think it all out again.The answers must be i) they are not - go back and start again ii) clearly not enough; this must be the major part of a transitional scheme iii) I know of know evidence whatsoever to support this figure except a survey undertaken by a provider which suggests it is much higher
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Anonymous | 12 May 2010 6:48 pm
I hate taking exams! An alternative would be good for me. Why would not like the CII have anything to do with failing exams?
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Crazy gang IFA member | 12 May 2010 8:19 pm
I am seeing a distinct difference between employed advisors and self employed advisors in the way they are dealing with all these axams.Generally it seems that if you are employed, the company seem to be footing the bill, and giving study time, rightly or wrongly, or at the very least refunding them.
A large proportion of self employed consultants have to not only pay for them themselves but take a significant amount of time out to study. There should be some support for the self employed sector or there is going to be a major problem I feel.
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Anonymous | 12 May 2010 8:33 pm
Advisers may not
be forced out because the exams are too hard or the deadline unachievable. They may just be sick and tired of the slavemasters, especially if they are within 3-5 years of retirement. Exams will not prove them better advisers at this stage.
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Gillian Cardy | 13 May 2010 9:44 am
Hi Crazy Gang - I'm not sure what you think this industry looks like ... perhaps someone should submit a FoI request to the FSA.
I ran my own business. I took the exams - starting in 1995 and taking a total of around 10 years - FPC 1, 2 and 3 through to Certified, Fellowship and Chartered.
But as an employer I also paid for my staff to do their own FPC and AFPC exams. I shared the costs of the study material which they would keep afterwards, and refunded the exam costs when they had passed so they weren't motivated to not bother!!
It's nothing to do with employment or self-employment. Many of us are both.
It's actually investing - in personal futures (your own and those of your employees) and in your company's future.
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Anonymous | 13 May 2010 10:12 am
In response to the post at 4.46 yesterday afternoon, I have to say that I have always found the CII's study materials to be very helpful. In fact, I've never used any other study materials and I'm now one exam shy of chartered status.
If advisers are struggling to pass the exams, it's more likely to be as a result of a lack of effort or deficiencies in their study technique than it is the clarity of the study material.
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Dusty | 13 May 2010 10:13 am
What fantastic news for the CII. an opportunity to make even more money!
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Steven Phillips | 13 May 2010 11:51 am
Failing exams does not make you an incompedent advisers. This is an insult.
I would also like to know why IFAs have to pay for exams that someone else says we need to keep our jobs.
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