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Advice you can bank on

Institute of Financial Planning chief executive Nick Cann believes banks are well placed to take financial planning to the next level and predicts that major names will enter the fray within five years.

Cann says at least one bank will take the opportunity to train financial planners, make sure they have appropriate qualifications and deliver quality planning.

He says: “This is a great opportunity for the banks. You need big organisations to take this forward and reach all members of the public. We now need to get to the stage where big companies are embracing the opportunity.”

Following the RDR interim report, Cann is continuing to lobby for the inclusion of a financial planner’s category to sit at the top of the advice chain, rather than simply having an advice/sales split.

He says there is a need to create an upper tier that provides an environment of professionalism, followed by IFAs, tied and multi-tied salespeople and money guidance.

He says: “The professionals would be the financial planners. Advisers and sales people would then be components of the professional sector. I do not have a problem with distribution models that are tied or multi-tied, as long as consumers know and understand what they are being offered.”

Cann says that while he supports the move towards higher qualifications, the interim report proposals create a danger that advisers will not aim higher than diploma level.

He says: “The FSA has set out diploma level as the benchmark but there is no indication of what people who have already achieved that level should be reaching for. I hope that does not become the new ceiling. There needs to be a provision to recognise achievement over and above diploma level.”

Cann adds that most advisers are happy to work towards obtaining higher qualifications and have the necessary tools and support available to them.

He says: “Advisers need to understand what they need to support themselves and get on with it. People will have had two years to think about obtaining higher qualifications by the time the requirements are introduced and many providers are offering free training programs. People will then have another four years to pass three exams testing the things they are supposedly already doing.”

Cann says he is disappointed with the FSA’s less stringent proposals for customer-agreed remuneration. He says: “Advisers have to have their clients’ needs first and their remuneration should reflect that. If they are relying on sales to make money, they will never make it.”

He adds that the FSA’s suggestion that product providers should not have any influence over how much advisers are paid is “nonsense” as some products are price-sensitive and providers have to remain competitive.

Cann is also calling for universities to provide graduates with courses and qualifications that will enable them to become financial planners. His goal is to have at least six universities offering a financial services degree within the next five years.

He says: “We need to make sure we have students who want to become financial planners, make sure there is a course that equips them with the skills and qualifications needed to perform the job well, then make sure there is a job for them at the end.”

Cann says he does not believe that the current changes proposed in the interim report will sufficiently alter the market and will do little to draw in more consumers.

He says: “There is still a gap in how we reach out to consumers. We need to create an environment where people are looking at different paths to advice and then actually following them.”

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