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Categories:Regulation

Is QCF level 5 the next mandatory step?

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Exams have always been seen as a necessary evil but it is high time that we embraced them wholeheartedly for their passport-like quality to a better industry. Qualifications hold the key to transforming our industry into one with full professional standing and it should be a priority for company principals to ensure their advisers are up to scratch.

Raising the professional standards of the industry remains central to the guiding principles of the RDR but once we have reached the level prescribed (QCF level four), we must not rest on our laurels. Level four is a sensible base for the profession to be constructed on but having reached this milestone we should continue to ensure that we are moving upward and onward - perhaps QCF level five is the next mandatory step?

Whether advisers choose to take the certified route or the chartered path, there are many benefits to standing on the highest tier of qualification. Apart from distinguishing yourself from advisers that have chosen to stay at diploma level, higher qualifications also mean that advisers are more likely to get professional referral introductions. This would lead to new business being easier to come by, which would have a knock-on effect as their time would be less under the cosh from commercial pressures so they could devote themselves further to quality advice.

For too long, we have been laden with a legacy of misselling skewing the reputation of a profession where the occasional bad apple is certainly the exception, not the rule. This has led to us not starting on a level playing field in comparison with other industries.

The RDR will put us back to square one and it is from this point that we need to spring forward and reinvigorate the industry to raise itself to a standard we can all be proud of.

The key with qualifications is to start off as young as possible. It can only be good for the industry to have bright young professionals coming through the ranks, highly qualified at a relatively youthful age.

Going one step further, surely the holy grail of our profession would be self-regulation, such as lawyers with the Law Society and accountants with the Association of Chartered Accountants.

This would give the industry the reputation that it deserves as long as we keep up the high standards of professionalism.

Some advisers might not make this exacting standard but to move the profession forward, it is a necessary adjustment. Advisers who want to stay one step ahead should look to invest in training staff up to the highest level, increasing the profession’s reputation and benefiting clients.

Sheriar Bradbury is managing director of Bradbury Hamliton

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Readers' comments (15)

  • And not one mention of how it will serve the general public Sheriar ... Just one section of the advisery community asking for increased rules to get rid of the competition who may be better at a different part of our role.
    A mandatory increase to level 5, when consumers haven't even requested, nor want to pay for an increase to level 4. You don't believe in a free market economy then I take it?
    No evidence that it was those with lower qualification that missell....

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  • Perhaps more exams are indeed a good thing, especially when people are offering financial advice to the public who spell it "advisery"

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  • "Experience, when it is wisely used, becomes knowledge"

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  • Let Anonymous, be it he or she, cast the first stone !

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  • So how would RDR have solved, Equitable life, Keydata, Arch Cru, Northern Rock, Endowment, PPI and pension transfer miss-selling etc.?

    RDR is just an a set of exams indicating if you pass you have a achieved a certain level of knowledge but it does not mean that knowledge will be used correctly or to the best interests of clients.

    G60 did not mean those who gave advice on pension transfers did so to the best interests of clients as the FSA eventually found out and forced some large firms to go through re-training despite having passed G60. In fact I would say G60 encouraged pension transfer business as if it was a licence to make money.

    When you pass your driving test it doesn't mean you will always drive safely and not exceed the speed limit does it?

    RDR is just a tunnel vision view and will not encourage people to save or give everyone better access to advice in fact it may do the exact opposite.

    No one seems to be looking at the wider picture sadly.

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  • Some of the wisest people I know have no letters after their name or pieces of paper stuck to their walls.

    Some of the biggest crooks have been chartered, certieid or otherwise 'qualified' advisers.

    Let's be clear, we are talking about ethics as much as qualifications We are talking about experience as much as qualifications, we are also talking about bodies which are gleefully pulling in vast sums of money from advisers who are being relentlessly pushed in that direction by misiguided rule changes.

    History is littered with examples of ruling bodies forcing change with devastating results. In this case, the lack of accountability means the FSA can do whatever it wishes (as long as the general's horse is carrying the consumer flag).

    Just think, six years preparing for financial nirvana and a decade or more to recover senses and start again.

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  • I recall the Pensions Simplification exam: what a waste of time end energy. JO5? Well I didn't pass this particular exam and so I can't tick that box. But what if I had passed? The rules have changed out of all recognition, so what would a certificate prove? It would prove that I knew the rules then and not the rules as they are now. If you feel that you need to pass exams, then please do. Personally, I'm bored with it all.

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  • Why are can’t the majority of advisers just honest and admit they are terrified they will not pass the exam instead of bleating on about experience and how qualifications don’t solve anything. Some people want to label themselves as professionals based on passing the FPC 15 years ago and attending the odd seminar here and there. Prove you are professional by showing this ‘experience’ is backed by knowledge and pass an exam. If you can’t then get out of the industry because we don’t need the dead wood ‘know-it-alls’ who actually know very little and don’t deserve to be called an adviser.

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  • Alan Lakey | 19 Oct 2010 12:21 pm

    "Some of the wisest people I know have no letters after their name or pieces of paper stuck to their walls."

    --------------------------------------------------------------------

    You would say that though, wouldn't you? After all, it supports your view that increased qualfications aren't required.

    "Some of the biggest crooks have been chartered, certieid or otherwise 'qualified' advisers."

    --------------------------------------------------------------------

    Really? Are you able to provide any examples of this?

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  • The reality is that most financial advice is relatively straight forwards, yet the exams seem to be focused on the extreme cases.

    How many IFA's actually have clients with pension funds in excess or close to the life time allowance, yet all the testing will be based around the legislation that will affect a very small percentage of the population and IFA community.

    Do we really need any more than the basic FPC type qualifications for dealing with simple life cover, pension provision and investments?

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  • Well said Mark and the Lifetime Allowance is a very good example. How many consumers have been totally confused by being asked how much of their lifetiome allowance they have used compared to those who might have ended up anywhere near their lifetime allowance, let alone over it!

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  • Anonymous | 19 Oct 2010 2:18 pm

    Alan Lakey | 19 Oct 2010 12:21 pm

    "Some of the wisest people I know have no letters after their name or pieces of paper stuck to their walls."

    --------------------------------------------------------------------

    You would say that though, wouldn't you? After all, it supports your view that increased qualfications aren't required.

    "Some of the biggest crooks have been chartered, certieid or otherwise 'qualified' advisers."

    --------------------------------------------------------------------

    Really? Are you able to provide any examples of this?


    short answer is yes:

    simply look on the FSA site, which firms have been fined then see if they are chartered etc

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  • Melanie - You are questioning the honesty of other advisers in your post, please do not do so.
    I thought we lived in a free society where I am allowed my opinions and I do not have to GET OUT as you say.
    In a free market society, the markets would dictate a need for a move to level 4, 5 or even 6, by increasing the cost of PII to reflect the claims experience associated with having the qualification. That has NOT been the case, so an mandatory increase is actually a distortion of that free market economy.
    Oh and for the record, whilst I have not finished my diploma, I was working towards it, but if I am to be dictated to then the natural reaction is one of two things, fight or flight and I prefer the latter, especially when even before getting our levcel 4's we are hearing siren calls for even higher qualifications which are not being requested by PII insurers yet.

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  • In 2007, as a young adviser, 20 years old with no financial services expierence i was thrown in front of customers selling investments only having past just CF1 and 2.. i was given 5 weeks of training on the advice process.. No support was available and was not allowed to look at protection for clients.. 3 years on, i have worked for 2 big banks, witnessed bad advice being given on a daily basis for targets only and ignoring what is right for the customer.. I have now done all the CFs and now passed IFS diploma, while starting first Advanced Dip exam in April.. I am now an IFA, and hand of heart believe what i have done to get to where i am is not acceptable.. The CF exams are not of a high standard and the diploma is what a client deserves in terms of knowledge.. If you have worked as an IFA for more than 3 years and have a good record.. That should be enough and grandfathering should be in place.. More regulation of Banks is a must, they sell one thing Structured Products and are not Protecting their clients.. New entrants a diploma is not a great ask and lifting the standards from 2012 onwards will be the right move come 2012 let alone 2015 or 20.. The older IFAs are getting the short straw here and forced to do exams that are worthless to them and a kick in the teeth.. Financial Advisers who want a long career in this, look around we have had it easy and start studying before you get left behind!

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  • Melanie Samuels

    1 question the same question that is now being asked by MPs and the TSC - 'where is the evidence' ??

    Exams do not equal professionalism any more than experience that is precisely the point there are bad in both and in a Free Market generally they get found out eventually. As far as I am concerned (and I suspect most I know) its not about passing a poxy exam its about the thin end of a wedge.

    Thats why IFAs have the lowest compliants - it aint broke so dont fix it.

    Forgive me if I'm wrong (I am not being patronising) but I suspect you have not been around too long in this industry (and specifically dont recall regulation since 1988) - when you have you will realise just how big the thin end of the regulatory wedge really is.

    This is about the regulator not the IFA

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