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Aifa gets tough over RDR qualifications

Aifa is demanding the FSA drop mandatory RDR requirements for existing advisers to reach new qualifications and has pledged to launch a judicial review if the regulator fails to listen.

In a toughening of its stance on the RDR, Aifa director general Chris Cummings (pictured) says the FSA should be encouraging IFAs to meet higher professional standards with regulatory incentives rather than imposing an “arbitrary cliff edge”.

In an interview with this week’s Money Marketing, Cummings says advisers would want to increase qualifications if they were offered lower regulatory fees, lower capital requirements and less intrusive supervision. He says Aifa has no problem with new entrants having to reach QCF level four as long as regulatory incentives are offered.

He says: “The IFA sector has gone further than any other part of the industry in terms of improving professionalism. If there is a good commercial reason for advisers to get the qualification, then they will. What we have to avoid is an arbitrary date that leads to the closure of good firms.

“This approach is what the RDR was intended to do, that is increase consumer access to financial services. The current plans will lead to less people getting advice and that advice becoming more expensive.”

Cummings says the FSA must move away from its current “confrontational approach” when dealing with the investment market which, in itself, has been one of the biggest victims of the banking crisis. “We have already been punished once due to the failures of the banking system, to be punished again by introducing arbitrary supervision is deeply unfair,” he says.

Cummings says if the FSA does not listen on retrospective qualifications, Aifa will seek a judicial review of the RDR process. He says this would be a last resort as it would mean spending members’ money, as well as the FSA spending members’ money defending it.

Aifa is also looking at separate competition reviews to be brought to the Office of Fair Trading and European Commission on the FSA’s ability to abolish commission and its proposed ban on factoring.

“We think there is a strong challenge to their ban on provider factoring,” says Cummings.

SimplyBiz chairman Ken Davy says: “This is a very positive stance for Aifa to adopt. It recognises the whole of the IFA sector is on an unstoppable journey towards enhanced professionalism. Forcing an acceleration of this journey through an arbitrary deadline is simply the wrong way for the FSA to proceed.”

Institute of Financial Planning chief executive Nick Cann says: “We support the use of regulatory dividends but we do not believe that, under its current guise, the RDR should allow IFAs to continue without higher qualifications. Aifa’s membership needs to decide whether they want to become professional businesses offering independent advice or offer a more simplified service to their clients.”

Adviser Alliance director Alan Lakey says: “I fully support the robust stance that Aifa is taking on this issue.”

For full coverage of responses to the RDR consultation paper, see this week’s Money Marketing.


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There are 99 comments at the moment, we would love to hear your opinion too.

  1. The Mystery Shopper for IFAs 4th November 2009 at 9:39 am

    Wow, I’m just picking myself off the floor!!!

    Has Cummings finally woken up? After more than 10 years of corporate and illegal abuse from the F-Pack against IFAs and all falling on AIFA’s deaf ears, HE HAS SEEN THE LIGHT?

    Well lets not get too excited and see if he can carry this one through. Keep it up Chris and don’t relent as the Leviathan monster is weakening.

  2. Can anyone countenance what would happen if accountants or solicitors where given the same deadlines, retrain by X or else?

  3. Some common sense at last – well said.

  4. There are a lot of very experienced advisers who want to improve their qualifications but at the same time don’t have the benefit of unlimited time to study. The average age of an adviser is hardly something to be complacent about, and not giving time and credit for experience to comply with RDR is simply going to make matters worse. There is no great rush of young graduates to become financial advisers afterall. Or perhaps that’s the intention? To make the IFA sector the preserve of the rich? Or perhaps to remove it altogether?

  5. I believe the majority of Aifa members have few qualifications and so it is understandable that Aifa must take this stance on behalf of those members. However I feel as I am sure the public at large do that advisers must have a certain level of technical klnowledge and this is mainly gained/measured through examiniation. I am sure no one would take advice from a solicitor who was not qualified whether he’d been around for 2 years or two decades!!

  6. At last, some common sense.

  7. When will people just accept the RDR and get on with the exams. They should not be that difficult for any ‘good’ advisers out there and surely will weed out some of the chaff out there. If you are committed to being a professional in this industry then acceptance to me seems to make sense and 2012 is still 3 years away. No one can argue this has not been coming for a while so if not already on the exam hunt I would question your industry commitment. I am now working towards chartered as no doubt level 6 will become mandatory for certain areas of advice in the years to come and on the basis I have another 20 years plus to retirement I would rather be ahead of the game than having to play catchup and becoming one of the ‘whingers’in the future.

  8. Can’t belive I’m reading this, what’s changed his mind?

  9. If all IFAs were as professional as accountants and solicitors, we wouldn’t need the RDR professionalism and qualifications work. Sadly, not all IFAs are. Existing qualification levels are insufficient to give consumers confidence, and the bar needs to be raised.

    Those who have sufficient desire to remain in the trade will upskill themselves. Those who don’t, won’t. New people, more highly qualified, will enter the industry over time in the place of those who leave.

  10. Bravo – at last one of our bodies is standing up to the FSA . I have the qualifications ( well in what I understand to be required ? ) but totally support the stance ,although I do agree a gradual increase in qualification requirements -new starters and specialist markets in particular-should be in place. As for the 2nd part – Aifa is also looking at separate competition reviews to be brought to the Office of Fair Trading and European Commission on the FSA’s ability to abolish commission and its proposed ban on factoring. The whole banning of commision issue which will only lead to less and less consumer acces and choice is an even bigger issue in my mind – I for one would be prepared to see my Aifa fees spent and even contribute further to take the FSA to task and win the case on this one.

  11. Excellent stance. There are many advisers who are keen to become more qualified and are studying accordingly but at the same time are looking to change their business model and earn a living! Let us hope that common sense prevails.

  12. Thank you Chris for standing up and being counted. Lets all join together in this action not because we don’t want to be forward thinking and progressive but because we are fed up of being treated very, very badly. It is not the IFA sector that has been out of control that is costing our country hundreds of billions of pounds over £4,000 per family just to bail out the banks not to mention the cuts to come and the tax rises as well.

  13. At long last we have someone asking the right questions and making the same statements.

    Of course the Industry has to change, and that is not in question. Deadlines or Else will not work, and nor will the fact that you can only get qualifications from very limited range of providers.

    Can you imagine only being able to get a Law Degree from Guildford Technical College or an ACCA from Newcastle – it’s laughable.

    Given that the FSA seems to want what it wants and there is little debate, there is good reason to argue and of course the issue of qualifications need to be opened up.

    Personally I think that the FSA is wide of the mark on the RDR while accepting that change is required.

    Come then, Chris lets push for a judicial review, and spend the money, and then we can open up the debate and look seriously about the issue of qualifications and standards, and of course see if we can obtain our Level 4 qualifications from A. N Other rather than the CII.

    Most of us have noting to fear

    Richard Smith IFA and Tech Consultant

  14. Well done Chris, common sense at last (but with a hint of a threat to drag the FSA into the nightmare of judicial review). Perhaps the FSA may now listen and look at the bigger picture.

    I can’t help thinking this is a bit like the upcoming heavyweight boxing fmatch with Chris as David Haye and the FSA as the huge Russian guy. Keep moving and jabbing Chris and remember – The Bigger They Come The Harder They Fall…

  15. Well Chris! you have taken your time but now you are getting there! I might even renew my membership of AIFA. It is about time the FSA started to listen.

    Nick are you suggesting that I and people who have lived through the evolution of the IFA market and have vast experience (35 years) should be stopped from trading 5 years before normal retirement because we will not take further qualifications.
    Presume the newly acquired Charter of the Securities’ institute and being a Fellow is being unprofessional and I should give simplified advice!
    When Ministers and FSA Directors get qualified by examination for the different posts they hold and (regularly change) I might consider it!

  16. Quote: ‘Anonymous | 4 Nov 2009 9:40 am
    Can anyone countenance what would happen if accountants or solicitors where given the same deadlines, retrain by X or else?’

    Errr, Accountants and Lawyers are ALREADY professionals when they start work, the lawyers having done at least 3 years on a law degree and then a year on the LPC.

    They are also required to keep CPD etc etc

    Shocking eh, where will it end? Hopefully it will end with a profession which is called ‘Financial Advisor’ which will have its own constituted body, which is able to strike people off in the same way that the professions can… (Medics, Lawyers, Barristers, Accountants), and which has a voice in Government circles….

    God, all this whinging about taking an exam which is pretty much at A level standard is cause of much amusement amongst my mates who are lawyers. Hell, even with a L4 qualification as the min standard its a lot easier to attain than a law degree and LPC.

    Just sit the exams and get on with it, or go and sell something else 🙂

  17. I think AIFA’s position is sensible.

    Entry standards have risen in many professions but nobody insists that those already qualified should do so again.

    Or compare it to the driving licence.
    The standard my son will be required to achieve is considerably higher than mine – I had no theory test. My father’s test was easier than mine and my grandfather did not need to take one at all.

    We are all expected to comply with the Highway Code as it now stands, rather than the one at the time we took our test – but nobody expects us all to pass the modern test or give up driving.

    Yet the consequences of a car crash are likely to be far more serious than the those of a stockmarket crash.

  18. Anonymous/ 4 NOV 9:43 a.m.- You should be anonymous!! Do you know any IFAs that are not qualified?? It is the fact that we would be required to re-qualify that is NOT acceptable. To expect the IFP,PFS and CII to agree with the very sensible and common sense approach of both the AIFA and Ken Davey would be like expecting turkeys to vote for Christmas. They have far too much riding on the imposition of higher minimum qualifications (and then ever higher). It is all about money and their future status.
    I am coaching a young guy to become a CFP. I am at level 3. I have over 30 + years experience to pass on and I may retire within the next 3-4 years leaving a successful Co to my successors. How would my time best be utilised. Use your nouse!
    Well said Chris and Ken!

  19. About time Aifa represented the vast majority of its members. What the FSA wants to do to IFA’s would not be allowed in any other profession. As for qualifications I already hold a qualification that allows me to do my job, how can the FSA say that this is no longer acceptable. I fully believe in continual professional development but not by compulsory deadlines.

  20. I am delighted hear that Chris Cummings has at last spoken openly about RDR and exams. I do believe that the exams needed to be able to give financial advice should be significantly tougher. Much tougher! However, but I do believe that advisers who have sat exams set by regulators and other professional bodies should be penalised frrom 2012 simply because these same bodies have changed their minds. It’s not the exams I’m upset about; it’s the principle. I know of no other profession that has been treated this way. And yeah, I’m a professional!

  21. Get real folks. Those who entered the industry as I did back in the 80s with only the basic FPC cannot expect to be allowed to adise clients on what to do with their life savings with only this basic “CSE”, and nor should they be so allowed.

    I went on to do the Dip[loma ( the hard G paper based one rather than the softer current issue ), and then on APFS and Chartered in my late 50s.

    If I can do so can anyone else fit to be allowed to invest clients life savings.

    One sensible alternative could be to have at least one Diploma holder in every practice who takes personal responsibility for every case concluded, acting much as a Chartered Accountant or Solicitor might where work has been done by good but not fully qualified colleagues.

    I note ( and deplore) the fact that the PFS/CII is allowing Bankassurers to describe themselves as providing a Chartered Financial Planning service where not even the Advisors own managers, let alone the Advisors themselves, have reached Charterd Status. If having a just a Chartered Senior Manager and a couple of Post Event Chartered file checkers in Head Office is good enough to claim Chartered Status for the whole operation, then I cannot see why one Qualified member per practice of say 4-6 Advisors should not be good enough for the FSA.

    I note that previous posts have referred approvingly to IFAs as Salesmen. That is the problem, too many are indeed salesmen rather than Advisors and in my view that is just not on for anyone entitled to the designation IFA today.

  22. At last A trade Body with Balls (I Hope), is Chris Cummings just being political or is he up for the Fight?

    The FSA have not got a clue and we as IFA’s need help.

    IFA’s will decrease by at least 40% if these new rules come into force.

    There are too many IFA’s who only want to look after themselves!

    They are probably the same when it comes to giving thier clients advice, me, me, me.

  23. Well done Chris.
    To all those who want advisers who “sell” to leave, if you were all better salesman, people like me would not still be in business. Becuase y some of you can’t sell, you see the best way to get more business is to ban us when we haven’t done anything wrong.
    Personally if it will result in the F-pack realising that even THEY should have to apply common sense and respect the law, then I’d happily pay the equivalent of one years F-pack fees to AIFA (i.e. about £3k total when you include FOS and FSCS), to get the FSA to realise they cannot bully us using our own money.
    The problem is that if the FSA defend it, we need the FSA directors to be personally liable if they loose.

  24. Nice words, that will excite the average 50+ like myself, that don’t have the time to study whilst also trying to make a modest living, keeping up with compliance, completing Gabriel, cpd, tcf and all the other acronyms.
    Trouble is they are just words at present. Its also nice to see Ken Davy respond; How many IFA businesses will SimplyBiz lose post 2012? Me for one.
    The only critic of Chris Cummings is Nick Cann, chief executive of the Institute of Financial Planning. Not suprising though as the Institute of Financial Planning makes its money by exams!!.
    Don’t let us down now Chris.

  25. Qualifications = expert advice

    Experience – Expert advice

  26. I think Chris has woken up and smelt the coffee. He has seen that there will be no IFA’s and no AIFA post 2012! The FSA has backed the industry into a corner and we will FIGHT. Although a JR would cost “members money”, redundancy will cost us far more! We may as well make a last stand before these lunatics destroy what is left of the finest distribution network the consumers could ever hope for.

    As for the comments from Nick Cann of Institute of Financial Planning (and his ilk),
    I would remind this man that he is talking about the livelihoods of 10,000 IFAs and possibly a further 20,000 support staff. His opinions are bigger than his organisation, which can only boast a membership of 2,000. This is even dwarfed by the 2,468 IFA’s who have signed to say that they believe FSA policies have and will prove disastrous to both businesses and consumers alike –

  27. About time… Well done AIFA

  28. Interesting points. Re accountants and solicitors; they already need to attain a far higher level of quqlification than the current QCF level three requirement in this industry. I would not want to take legal counsel from a solicitor qualified to FPC/CeFA standard.

  29. As so many have said already, its great that finally we have a trade body that will actually now say what the vast majority in the trade want to hear. I am nearly 50, I have been in the advice sector for 20 years and quite frankly am too tired to contemplate any more exams. If the RDR is pushed through then its curtains for me and for a good number of other IFA’s that I know.

    Those with a vested interest like the CII or IFS want the RDR just like they pushed for FPC as they know the revenue this will generate. The FSA want RDR as it panders to the medias clamouring for banning commission and will cut the number of small firms they have to worry about.

    The people that matter though, the customers have not been asked at all throughout all of this. I have though conducted my own mini survey. I have asked clients both new and existing whats important to them. Overwhelmingly they have said that they thought that wanted someone they could trust to help them financially. Whether I have a higher qualification level or not did not matter to them. They did not much care to pay fees with VAT added and would prefer to pay commission even if it added slightly more to the cost of a product.

  30. To Scott – No, but then I’d happily use a converyancer to handle my house move (and not a solicitor). I’d happily fly in a plane with a pilot, but I would not want the designer flying it neccesseraily.

  31. The Mystery Shopper for IFAs 4th November 2009 at 10:28 am



    We are not investment experts, we are introducers of business. Forget the idea that IFAs are some sort of Gurus who need to prove themselves in which we pick very detailed investments. Most of us pick funds run by fund managers who are the REAL EXPERTS. And those IFAs who are pretending to move to the new no commission model I say stop fooling the clients by adding a SECOND LAYER OF AMCs. You lot are offering clients 2 layers of AMCs, fund mamgers and your own which in the longer term creates a bigger whole in the clients investments. E.G. Just take a look at the recent spat between Towry Law and Neil Liversedge’s letter to the CEO. We are not the manufacturer of these products but purely distributers. Lets not fool ourselves and the public of our real role. We have also allowed the FSA steal our logo (e.g. IFA). The sooner they are all sacked the better for the whole country.

  32. The trouble with most opinions is that they are usually based on the individuals own circumstances. I take great exception to some arrogant twat with twenty years to retirement telling me with five years to go that I spend a fortune in time and money over the next three years to give me the right to see out the last two years of my working life. I spend three years of effort for two in return and he expends the same effort to give him seventeen. I hope his sense of fair play improves in dealing with clients.

  33. I think we should concentrate on our own profession and work towards being the best we can without trying to become as “Professional as Accountants and Solicitors”. In my view, and I surely cannot be alone here, there is as many useless solicitors and accountants out there than in any profession. Add to that people are always moaning about their fees!

    Being a member of an association, corporate body or having high end qualifications never on its own makes a professional. It is more to do with your own application and continuing development. It seems that in any body it would make sense to be more strict with CPD for all existing advisers and naturally you would insist on new entrants meeting minimum standard. This, in my opinion, is how the industry moves on at a natural pace – you do not crash it mid stream and start again! I know the exams are not particulary hard if we are to do our job right but that is not the point.

    Anyway off to do some work now, sorry for the rant!

  34. I’m an IFA in my 60’s, with 37 years’ experience. I trained as an accountant before moving to this field of work.

    I’ve never thought of joining AIFA; never thought they were up to much.

    If they take on the FSA with a Judicial Review I shall join them!


    “The Financial Services and Markets Act does not permit the FSA to cancel an authorisation simply because the FSA has changed its views on what the appropriate qualifications should be….It is one thing to impose new rules for new entrants to the IFA profession, it is quite another thing to disqualify someone who is already qualified.”

    Peter Hamilton barrister

  36. Well done Chris, it is about time someone was listening to our views, that is what we pay our fees for, I hope you will go through with this and not let the FSA persuade you otherwise.

  37. OMGHEREWEGOAGAIN!! 4th November 2009 at 10:49 am

    AAARRGGHHH!!! This is a subject which really winds me up.

    Sorry, although I admire what AIFA are doing, they maybe missing the point here – I would strongly agree with Nick Cann’s views …

    The whingeing typically comes from old-school advisers who can’t/won’t adapt and could be destined to fail in future – check out Darwin’s Origin of the Species!!

    Falling between a graduate-wannabe and an ‘old-school’ pre-bailout-boy, I’ve spent a lot of money in gaining professional qualifications to add to the Batchelors/Masters degrees I’ve already obtained – ALL of which aim to add value to my clients …

    Although the FSA have a shed-loada faults, the requirement for professional qualifications IS A MUST. Period!! And for everyone – not just for new entrants to the profession.

    I’m guessing that all those who complain have:
    A dentist who didn’t quite finish his BSc, but just likes looking in people’s mouths;
    An accountant who, well didn’t quite finish the training contract, but likes numbers and has a loyal client-base
    A builder, who never completed his C&G (or similar) but has seen copious building programmes on TV and hey .. it doesn’t look that hard, I guess I’ll give it a go …
    Goes to his favourite eatery where the chef worked at McD’s, never trained under a quality-chef, but has watched AWT on TV and after all, it would gimme a loada cash/enhance my reputation … …
    etc etc

    Accountants, solicitors, barristers, dentists, optometrists, pharmacists, engineers, etc ALL obtained FULL qualifications/status BEFORE being allowed to practice – if we are to be classed as a profession (rather than one stage up from a Comet salesman), we should adopt the same.

    No dilly-dallying with timescales.

    Otherwise, why don’t we revert back to the ‘bad-old’ days when any numpty could be an ‘adviser’ and hey, why bother being qualified … as long as you can flog products, you’ll be fine!!

    Oh, and whilst I’m having a rant, how many old-school advisers are taking 1% FBC and NOT reviewing portfolios on a regular basis – or even communicating with their clients …?? No prizes, I’m afraid …

    Think I’l stop there!! 😉

  38. Well done Chris Cummings. All IFA’s are in favour of increased professionalism and qualifications to improve quality of advice and service over time and we should all be committed to that. We are also all aware that the current RDR proposals will lead to an exodus of experienced committed professional IFA’s in 2012. What will happen to their clients? We all know the answer to that also – straight into the arms of the bancassurers. Anyone think that’s a welcome outcome?

  39. I agree with AIFA. someone has to challenge the legitimacy of a proposal to downgrade the status of established IFAs whose only sin is to keep paying the fees to fund this regulatory body, which seems hell bent on destroying the IFA sector.

    I am a fee based adviser, who has given clients a genuine choice of payment options since 2003 when I joined A P Financial Services UK Ltd and at age 60, deeply resent the limitations on trade the RDR proposals represent, plus the downgrading of the value of my business as a consequence of such proposals.

  40. Excellent – a line in the sand.

    And if this can be established can we reinstate the authority for things we have already lost to the exam culture such as equity release and others

  41. Excellent news on both counts ie qualifications and doing away with commission option for clients. Lets hope its not too late!!

  42. It is encouraging that AIFA has grown some teeth and now wishes to snarl at financial vandals.

    The softly-softly approach does not always work and there comes a time when the regulator needs to be scared.

  43. Of course Nick Caan supports the RDR exam proposals. He must be laghing all the way to the fat cats bank!

    Well done AIFA, some common sense at last.

    Please keep this up.

  44. only a very small percentage of clients will pay fees .Why not simply put a fixed commission ceiling on product groups ie 5% on all investments 240% on protection etc this would take away any bias and companies who keep this promise could be branded fair trading just like food industry.Their may be a lot of clever clogs out their but have they been made redundant a few times from the employed sector.Are they trying to take up clients just starting up in life who need financial help who cant pay fees or do they become second class citizens.Lets get rid of the firing squad and streamline advice channels on product complexity .By losing commission the banks will pick up on thier products and their service standards and products are limited.AND who got us into the recession .Will the FSA give us redundancy a pension scheme compensation for loss of business tax breaks for additional training or just a say in the way we work

  45. This is the only way forward for many well established advisers like me to be encouraged to decide to remain in this industry and then consider the benefit of exam-tests instead of seeing them as a pointless and time / money consuming distraction and burden.

  46. At last AIFA gets off the fence. Chris you are absolutely correct that the unwarranted discrimination against small IFA businesses is not only unjust but most probably illegal.

    I have said before that like apple pie and motherhood one simply cannot deny the wisdom of increasing entry level qualifications to our business. There is absolutely no possible argument. BUT..

    To simply discard 10,000 authorised individuals, most of whom have invaluable experience, is madness and is unnecessary. Not to mention a further probale 25,000 support staff.

    I trust that the threat of judicial review is not an idle one.

  47. What complete and utter Tosh! AIFA is clearly looking at protecting the interests of the ‘great unwashed’ who probably make up the bulk of their membership and are totally unconcerned with what would be of greater good for the industry/ profession. I have yet to talk to an adviser who has been able to justify commission payments as a method of payment on a contract and those that see enhanced allocations and all that rubbish are happy to confuse the public into how much they are paid for what they do. And let’s be honest the public do not want to be paying professional fees to a bunch of snake oil salesmen. Those that can’t/ won’t get better qualified are causing huge damage to the remainder of the industry…and unfortunately have managed to get our trade union on their side.

  48. Guys , this is nonsense . The regulators have been visiting us for 20 years . They should know who does or does not do a good job or they are not doing theirs . I originally qualified as a Chartered Accountant with an interational firm where it was said ” you have now qualified so get on and learn what it is really about ” !!

    Any IFA who has been in practice for a number of years will have an amazing store of knowledge gained from FINDING OUT THE ANSWERS . Infinitely more than any exam will test . And of course the question is how that information is applied which exams do not test .
    AND there is no such word as “upskill” Ugh

  49. Excellent.I fully concur as an IFA with 30 years
    experience.In addition we should be using our
    resources to bring about the introduction of the
    Long Stop as is in place for other professions.
    Its only just & fair.

  50. There are one or two comments on here about other professional and how we should seek to be like them. They are missing the point and the point is that our industry is already on course to become more professional. The demographics are such that with an average ago of 54 we will naturally see changes in qualifications levels as older IFA’s retire and younger IFA’s take their place. There is no need to cull 10,000 good advisers and those that advocate this do a poor job at disguising their own self-interest. My advice to them is to remain anonymous when they post!

    Finally did you know The Legal Complaints Service (LCS) handles over 300 calls a day on a range of legal complaints? Record numbers of complaints are being made against doctors, according to the General Medical Council.

    The FSA peddle the myth that the IFA model is broken but that is all it is a myth.

    Here is the truth and here is how professional the IFA is: In June 2009 the FSA published an Oxera Report on the RDR

    Table 2.1 Life and pensions new business by distribution channel as a percentage o the total, 2003-07
    IFA/whole of market adviser 48.3
    Single-tied bancassurance 12.0
    Multi-tied bancassurance 24.2

    Source: Datamonitor (2008), ‘UK IFAs 2008’, November, ABI and Oxera calculations.

    * Of the 3% IFA complaints 2.1% were dismissed bringing the total of upheld complaints for IFA’s down to just 0.9%. This is all the more remarkable when you consider that in 2007 the FSA representation says that IFA’s generated 48.3% of financial service distribution compared to banks at 36.2%.

    So which would you prefer:
    36.2% market share 59% complaints share?
    48.3% market share 3% complaints share?

  51. Thank goodness AIFA have seen the light. As for the comments that “I can’t believe that some IFA’s are not just getting on with taking the exams”. Are you not listening?!! I suspect you have about twenty clients to look after and act as a RI within an existing firm. Time is the issue. And please don’t insult me that my thirty years of experience are worthless. I invite you to visit my business to see what I am doing to improve the services we give to our clients and then maybe you will begin to understand what are my concerns. Time! There is not enough time in the day to do all that is required of us at present let alone add to the burden.

  52. Raphael Kozlowski 4th November 2009 at 11:26 am

    The level and quality of comments in this article and the possible actions of AIFA, demonstrates the emotions, the sentiments and the voices of so many. It is refreshing to think that we are so lucky to be living in a democratic society with freedom of speech and freedom of thought. That is until the FSA stood up and roared RDR.

    The incompetence and unclear thinking by the regulator leaves me in no doubt that the sooner the FSA is replaced by people that can do joined up writing , the better.

    There is not one single profession in Europe that has placed similar demands on professionals that requires individuals to re-qualify at a given point in time.
    My own view is that our profession is based on humanity, the genuine understanding of a client requirements and the willingness not only to be an adviser, but a listener too. We are generally willing to help and talk through many other issues that have no baring on Financial Services. Why? Because we care. Do the FSA care let alone understand the humanity side of what we do?


  53. The particularly galling thing about this is that, having used our money to try to screw us with the RDR, the FSA will use yet more of our money to defend it (whilst continuing to line the pockets of its own staff and directors with bonuses of highly questionable merit).

    Just what is it that the FSA perceives to be so defective with the current IFA model? I have as yet to see any published material outlining just what it is that the FSA considers to be in such dire need of fixing as to justify the RDR. Please tell the industry that you seem to be so intent on kicking to death just what the fundamental failings that the RDR has been designed to address.

    For example, transferring control over remuneration from providers to the IFA and his client is undoubtedly a healthy evolution. But is there any hard and substantial evidence that IFA’s are routinely abusing the present system? If there is, then let the FSA publish it for all to see and debate.

    Is it the number of complaints ~ probably no more than and quite possibly considerably less than half of 17,500 recorded for the past 6 months for all non-bank/provider advisers compared with well over a million for bank/building society advisers? Well, not really ~ the FSA’s own statistics couldn’t justify it on those grounds.

    Is it that the majority of complaints against IFA’s are shown to be a a result of technical incompetence? Errr…..nope.

    Is it that letters of recommendation are found in some way to have been defective, notably on the crucial issue of risk warnings? Possibly, though fixing that is hardly going to require 500 hours of study to achieve QCA Level 4, is it?

    Maybe it’s that the majority of complaints against IFA’s are based on the client feeling that s/he’s been ripped off as a result of excessive and undiscussed commission. Errr, nope, not that either, because the great majority of IFA’s are already and have for years been doing their level best to be as open and transparent and flexible as possible in their dealings with clients on the issue of remuneration. Which institutions routinely ~ still ~ does the FSA casually allow to go on flogging to all and sundry life assurance investment bonds paying 7.5% commission and no trail to pay for ongoing servicing and reviews?

    Is there any hard evidence to suggest that clients dislike (properly disclosed and agreed) commission and, unless seeking pure advice, would rather pay fees in addition to the cost of the product? If there is, then let the FSA publish it for all to see and debate.

    Is it perhaps that clients are discovering after they’ve committed to one product that another, which wasn’t discussed, might have been more suitable? I don’t know, but such information should be easily and inexpensively available to the FSA simply by consulting the FOS and the complaints handling departments of the networks. No need to spend hundreds of thousands of pounds of our money commissioning a third party agency (or two) to undertake such a survey. Then the FSA could publish such data for all to see, in line with its website claim that it is an open, transparent and accountable regulator.

    Or is it something else perhaps that nobody outside Canary Towers has thought of?

    I believe it to be highly unlikely that the FSA will respond to a single one of these questions, so let battle commence. I’m sure that many thousands of IFA’s will gladly contribute to the war chest necessary to fight this blinkered tyranny.

  54. Congratulations Chris perhaps you will now start to fight on all the other fronts (in the RDR as well as generally) as well – it is about time.

    As one who is directly involved with the new Adviser Alliance together with Alan Lakey and Steve Farrall I may take the view that you have been stirred into action by events. Whatever the reason, better late than never. It will be interesting to see whether you have the courage of your convictions if the FSA continue on their current path.

    I am sure that I speak for Alan and Steve in saying I am happy to help you along this new path for AIFA

  55. It is good to read Chris Cumming’s comments and i would welcome lower costs and less supervision for higher qualified IFA’s. However we have known for many years that the FSA and our own industry have been pushing for higher qualifications.

    There is still plenty of time for advisers to gain the necessary qualifications. It is simply a question of prioritisation.

    It would, in my opinion, be a retrograde step for the FSA to back down. Advisers should stop bleating and start studying. This is a great opportunity for our industry to create a wider gap between the product pushers employed by banks/large commission driven sales forces and professional, client focussed IFAs.

  56. I do love it when the morals and standards are being laid down by those who already have exam passes (possibly from many years ago in a different world). I passed my diploma in 1991 – MLIA dip – which was the industry qualification at that time, but find that has been totally disregarded despite my thousands of hours of CPD since then. I look forward to those who took the G units for ALIA retaking the new J units.

    Do exams help increase the overall standard – yes it does. Do exam passes guarantee a better future – no they do not. I bet Bernie Madoff and those surrounding him had all the necessary exams, along with the lawyers protecting/working for him and the accountants auditing his accounts.

  57. Blah blah blah blah blah 30 years experience blah blah blah….

    I’m totally bored by this debate. I know a lot of good advisers, and they all either have the Diploma or are nearly there. Hell, these guys and girls won’t hire a paraplanner who does not either have it, or is working towards it.

    The argument is, of course, that if you really do have 30 years experience, and have not just repeated the same errors for 30 years, then you will have an amazing amount of knowledge and will be able to breeze through the exams easily….

    I think the industry has a bright, bright future, once the snake oil salesmen have been removed from the equation. Maybe then the industry will become what it should be, and people will stop telling me the ‘i got ripped off by an IFA…’ type stories. And I hear them all the time, from all sorts of people….. these people would sooner trust the salesguy down at the bank rather than the IFA in his office….which is obviously terrifying given what we all know about the ‘advice’ given by the bank sales teams

  58. Either Nick Cann has been misquoted or selective use of what he has said has been used in articles as what he has been quoted as saying on Citywire gives a completely different impression to what he has been quoted on money marketing

  59. As I said yesterday in another online publication – I fed up and planning my exit.

    The FSA are so out of touch with our industry and seem hell bent on taking down as many as they can, as they slip into oblivion after the next ellection.

    Anyone who was at the Sesame Symposium last year will have recalled what Ms Bowes and the FSA RDR Team thought of the IFA sector. She spoke to some of the top IFAs in the industry, along with Ivan Martin (Sesame & AIFA) & John Gummer (AIFA), as well as many leading industry experts, as if we were all a naughty bunch of school children. We wanted to question her about RDR, but Ms. Bowes refused to take any questions and marched off the stage to a stunned silence.

    RDR has very little to do with giving the general public better and more affordable advice, and all about the Banks securing the lower and middle markets, leaving the HNW market to what is left of the industry post RDR.

    How many of our clients who are not HNW are prepared to pay a fee for our services? Precious few, which is why we don’t charge them fees even though we would prefer to do so (fees are non-clawbackable!).

    I charge fees for mortgage work and non policy matter when I can. On investments I tend to structure commission to include renewal or fund related commission. I still however fail to see how I can charge a client for protection business, when stripping out commission from a policy makes precious difference to the premium they pay – perhaps a 10% saving only?

    Banks need far more regulation and improvement than we do. Friends of mine work for a top High St. bank in very senior positions, and don’t have a single financial qualification between them. Shere madness.

    I’ve had enough as many of you have as well.

    ” Goodbye & thanks for all the fish…”

  60. I fully support the robust stance that Aifa is taking now against the FSA – the FSA pays attention to nothing less.

  61. It’s simple……….Only what works counts and the RDR was never going to work!

  62. Exciting times for you IFAs – never a dull moment when the FSA has bright idea.

    I do feel sorry for you IFAs – you either continue down a costly road and reform to the FSA’s vision of the ideal IFA, or you purchase run-off cover now and leave the financial sector.

  63. Mr Steel(e), I presume you are the one that joined the industry as a trainee investment adviser with L&G Portfolio Management Services in 2006……. if you are bored with the debate why don’t you just stay out of it? You and your colleagues who sit smug in your offices no nothing about life in the real world and obviously get a kick out of trying to wind up others.

    It is great to hear that AIFA are finally standing up for experienced IFA’s who have added value to their clients for years ……………….

  64. Well done Peter Turner for puting probably what a lot of us feel accross in a manner that is logical
    while I agree that furthering qualifications is not a bad idea particularly for persons that have a long career path ahead and not much real experience behind them, I think that the FSA need to properly clarify their ideas on ‘the limited advice’ concept for those that would rather take this route also I wonder what standard the bank advisers will need to work to seems to me that tied advisers may be again the norm in the future for the general public whilst HNW clients will be able to pay for highly skilled IFA’s

  65. Well said and well done Chris Cummins!

    I am a member of both AIFA and IFP and am taking additional qualifications at age 59 at a difficult time for my small business. Nontheless I think that is is morally reprehensible – and perhaps illegal – for the FSA to change the goalposts on authorisation for existing authorised advisors.

    Smug young dynamic and, possibly, inexperienced, exam collectors and those who sell them academic services should pinch themselves back into reality. If the FSA is allowed to “move the goalposts” this time it will do so again and perhaps next time it will hit these people. He who laughs last laughs loudest.

    I cannot accept the rationale that older IFAs with many years of experience must necessarily provide a less professional service than inexperienced exam collectors. I want nothing more than for IFAs to be recognised as true professionals and welcome the steps being taken to that end. But I cannot agree with taking away the livlihood from time experienced and proven IFAs who find that taking further examinations in the Autumn of their lives is simply uneconomic. The FSA should allow for a smooth transition to professional status and not a brutal cull of those who have served their clients well, have gathered a great deal of knowledge and experience and have a record of complaints that the bankassurers would die for.

  66. I cannot believe Nick Cann’s comment (no relation that I know of) that the FSA should not allow IFAs to continue without higher qualifications. This is nonsense and an uncharitable and unfair blow to those IFAs of a certain age who have 20 or 30 years blameless experience of sound advice and integrity. AIFA are right in their stance and for what it is worth I have no problem with them spending my contributions in tackling the FSA judicially on this issue. From the responses so far, he appears to have the backing of many of us.
    Apologies for my disclaimer that I seem to be putting in every posting on this subject,but – I have no personal axe to grind; I am emphatically of a certain age but I am a (recently licensed) cfp and way past level 4.

  67. Excellent Chris. How can an institution that has let down 60 million people be allowed to pick on those doing a fine job despite ever moving goal posts – why has the following been buried?

    The Institute of Economic Affairs has published one of the most detailed analyses on the causes of the crunch, and their powerful conclusion is that it was governments and regulators who erred. Moreover, that the people most often berated for their part in the crisis – the hedge fund managers and those who run tax havens – are among the least guilty. Meanwhile, the regulators have secured a massive reward for failure, in the form of
    more funding and new responsibilities.
    A letter to The Daily Telegraph, signed by some of the country’s most renowned economists, outlines
    precisely what went wrong and spells out the need for a radical overhaul to ensure it never happens again.
    ?? Perhaps the most important point: central banks should have done more to ensure both prices and
    debt did not balloon out of control. In the early years of this millennium, following the dotcom bubble,
    central bankers ought to have kept interest rates higher. Likewise, those in surplus nations should have
    tried to encourage their public to save slightly less. Instead, the cabal of central bankers, led
    intellectually by Federal Reserve chief Alan Greenspan, ignored the massive imbalances that built up
    between nations and the asset bubbles inflating closer to home, judging that they could easily mop up
    after their explosion.
    ?? The Bank of England and Financial Services Authority are to blame here: there are a whole variety of counter-cyclical policies they could have used – for instance compelling banks to keep more liquid cash or to build up more capital – but they refused to do so. Whatever they claim now about overhauling the
    system, the fact is that they had powers to do so before, but simply did not act.

  68. I am 56 soon, have delivered long term holistic financial planning for 16 years and been the principal of a small IFA firm for 9 years. As it stands in January 2013 I will be 59 unemployed, with my retirement plans ruined, and a forced sale I am 56 soon, have delivered long term holistic financial planning for 16 years and been the principal of a small IFA firm for 9 years. As it stands in January 2013 I will be 59 unemployed, with my retirement plans ruined, and a forced sale of my business interest returning pea nuts. Not to mention possibly loosing my home due to loosing my income 6 years before planned.

    Alternately, I can take c. 600 hours off work to study, let my business fall apart, and my clients of many years fall by the wayside. Meanwhile my “RDR Qualified” advisors also lose their employment & let their clients down, as in the short term they don’t have the time, inclination nor legal right to run the business.

    I for one would be happy to fork out cash to support AIFA’s efforts to bring this issue to a judicial review, and sooner rather than later.

    There are lots of alternative solutions to this issue, which in principle I support. We should I think be a degree profession in the long term.
    of my business interest returning pea nuts. Not to mention posably loosing my home due to loosing my income 6 years before planned.

    Alternately, I can take c. 600 hours off work to study, let my busines fall apart, and my clients of many years fall by the wayside. Meanwhile my “RDR Qualified” advisors alo losse their employment, let their clients down, as they don’t have the time, inclination nor legal right to run the business.

    I for one would be happy to fork out cash to support AIFA’s efforts to bring this issue to a judicial review, and sooner rather than later.

    There are lots of alternative solutions to this issue, which in principle I support. We should I think be a Degree Profession in the long term.

  69. The following letter was published in the Daily Telegraph – Spot the Similarities?

    Chris Cummings has and deserves our praise – which of the great financial institutions will be brave enough to show public support?

    SIR -As someone who trained as a nurse in the 1950s, I have watched the steady decline in the standard of nursing care since the introduction of degree qualifications for nurses.
    Nursing had to change and move with the times. But how do patients judge nurses? Not by their academic achievements, but in the way they are treated and cared for. Nursing is basically a practical profession; we learnt as apprentices on the job. One can liken the training of today’s nurses to placing a prospective plumber behind a desk and then sending him out to mend your pipes.
    Practical experience, care, compassion and a real sense of wanting to nurse are what the profession is lacking today. Margaret Dixon Warmington, Oxfordshire

  70. Neil F Liversidge 4th November 2009 at 2:02 pm

    I should be at level 4 by next spring so I don’t really have a personal vested interest in the qualifications aspect of RDR. I do however oppose the imposition of a cliff edge date for qualification. I don’t suppose any on here would relish having to take a driving test again in order to continue driving if they had committed no offence to justify such a requirement. The qualification deadline introduces unnecessary pressures at a time when economic circumstances have caused a real increase in normal day to day business pressures. Moreover, with the CII only offering three sittings per year a traffic jam of exam entrants is a real possibility. The FSA seems to think it can behave like Professor Pavlov and use IFAs as performing dogs. The concept that somebody can be competent one day and incompetent the next dfies logic, is silly and artificial. That should not surprise us however as it is the conception of bureaucrats, none of whom have ever started a business from scratch and run it at a profit. Anyone can be an apparatchik; being an entrepreneur is something else entirely.

  71. @ Michael Pearman

    (1) experience is very useful indeed
    experience plus qualifications is even better

    (2) upskill

    v. [often as noun upskilling] teach (an employee) additional skills.
    · (of an employee) learn additional skills.

  72. Can’t belive I’m reading this, what’s changed his mind?

  73. My aren’t some people in this debate very rude/ignorant. Some are also not very brave either in dishing out their insults, e.g. by daring to anonymously describe intelligent, hard working people they have never met as “part of the great unwashed”.

    Qualifications do not in themselves endow maturity, sensitivity and compassion on their aquirers, as some of the commentators aptly demonstrate. Perhaps such people are better off working for large institutions where meeting targets are more important than client care?

  74. It is a difficult argument to challenge, however there are those of us with 20 years experience and some of us with 1 years experience 20 times. I do hope that they are not the ones who slip through the net and compound what can only be described as advice which benefited the adviser foremost. To decide if you fit the second description look in the mirror and ask yourself “how many times have I taken maximum commission for a investment, single premium into a pension or pension transfer in the last 5 years”. If the answer is 1 or more then you do need the qualification.

  75. Well well, the penny finally drops that without a robust IFA market, trade bodies such as AIFA will not exist. By the same token no further exams does present a similar problem for the CII and IFP – everyone looking after their own interests as usual then. The potential for imminent extinction does tend to concentrate the mind somewhat and one asumes this moment of enlightenment has brought Mr Cummings to his senses. I do however agree with his view (and yes I do hold QF level 4 before the professional exam takers wade in with the normal vitriol).

    Whilst I have no objection to enhanced qualifications (provided they are relevant and fair and are achievable within a reasonable time frame) I do take exception to the fact that the FSA and certain advisers that should know better assume that higher qualifications will automatically result in better advice and greater client care. This is no stronger an argument Mr Cann than the 30+ years experience highlighted in previous responses. I have seen first hand evidence of advice which has been a little lacking to say the least even though the advisers held CFP or Chartered status. Conversely I have also seen excellent advice that has been given by non CFP/ Chartered advisers. I have yet to be convinced that higher qualifications result in better advice to the client. When do the FSA enforcement officers and higher level management have to pass their diploma?. I suspect that I will remain regulated by individuals who have little or no experience of the financial planning role and will be qualified to a much lower level than me if they are qualified at all.
    Whilst the issue of qualifications is of great importance and an immediate threat to many, as an industry we have failed to see the runaway train that will destroy more advisers than the requirement for greater qualifications – this being the removal of client payment options from 2013. I have no problem with commission PROVIDED the client understands the mechanics and can compare this option against paying a fee etc. I look after mainly HNW clients but financial ability to pay fees does not equate to a willingness to pay fees. If the commission option is removed I predict that many IFA firms will suffer and that many qualified advisers could also be under threat. Whilst a member of the IFP I do not agree with Nick Cann’s comments but of course he does have a vested interest. He would no doubt tell us that all IFP members are fee only whereas I know that 99% are fee based (commission offset advisers), not quite the the same thing Mr Cann and I wonder how many of the IFP membership will still be around in 2013 if invoiced fees are the only option clients have. The RDR presents all adviser firms with major challenges and qualified or not, there is certainly no room for smugness

  76. Steve @ IFAbonus 4th November 2009 at 3:17 pm

    Qualifications = expert advice

    Experience – Expert advice

  77. What a very welcome U-turn. There are several aspects of RDR that need legal challenge but it needs bodies like AIFA to take the lead. Well done.

  78. It was predictable that, with a possible abolition of FSA in the wings, comment against RDR would become more vocal. But the case for ensuring a proper level of knowledge (exams and cpd), avoidance of conflicts of interest in the advice/sales process (abolishing commission), and service of the public good (ethical behaviour) remains to be fully and independently answered if professional standing is the industry’s goal.

  79. For Dathan Steele’s information I have a law degree and do not understand how anyone on a full time course can fail it. I found it far less challenging than, say the G10 taxation and Trusts module, with a much much lower passmark. Having said that, I will be completing the diploma, despite being 60 next year, and would have done so already if it had been cheaper.

  80. Michael J. Hollingdale 4th November 2009 at 4:55 pm

    I am disappointed by some of the anonymous comments and in that set out by Julian Sunley – at leat he was prepared to put his name to his comments –

    I would like to know how old Julian is and do not wish to make this personal but – I am 66.

    My partner dies at 75 giving a great service to his clients – I have ben authorised for almost 35 years through FSA, PIA, FIMBRA and before that even, NASDIM – (very few will remember the National Association of Security Dealers and Investment Managers)

    I love my job, I love what I do but I do not think I will be able, even with some 500 hours of study to obtain the so called exam results as are needed –

    I do find it insulting that after having built up a really excellent business with wonderful clients
    some people and a regulatory body deem that after 2012 if I have not been able to assimilate a formidable amount of fairly irrelevant information my advice to any clients may prove to be inferior or inadequate in any way !!

    For the benefit of anyone reading this article, if you are not already aware please read an article by an eminent QC Peter Hamilton – his presentation infers that what the FSA are trying to do is not Lawful – it is unlawful and therefore illegal – how about that !!


  81. It would be excellent to see this happen.
    However it should be noted that the FSA are not bound by any UK laws other than the legislation that put them in place, and have shown time after time total contempt for any attempt to discipline their cavalier attitude to normal legal rules that govern the rest of the populace.
    The only way to return sanity to the RDR is to disband the FSA and start again – ensuring that the new body has no-one on board that has been part of the current FSA.

  82. The FSA is clearly attemting to act beyond its legal powers by trying to force through a requalification for those advisers who have alreay passed formal exams. Withdrawing one’s licence and therfore an adviser’s living for no other reason is clearly stated by Peter Hamilton QC to be acting ‘ultra vires’, The FSA has closed its ears to reasoned argument.
    NOW is the time to take this matter to judicial review. Give the FSA an ultimatum. If the policy makers are not man enough to amend the poicy within say 30 days, then commence the JR process, do not keep stringing out the discussions. Be resolute, firm and confident. Bullies need to be opposed, not pandered to.

    I am happy to contribute to a fighting fund, say £300 – £500.
    If 10,000 of us did the same we could del with this matter in the High Court, where the policy could be seen for what it really is: ILLEGAL.
    The same need sto be done for the FSA preventing a longstop on liability.

    Contact AIFA and indicate your willingness to contribute. Post your willingness on this web site too, so we can see what numbers of us really feel like protecting our livings. £500 seems like a bargain. If 10,000 of us contribute, surely we can right this wrong that is being perpetrated against us.
    Let’s get the wagon rolling and show we mean business. Onward!

  83. Chartered Charlie 4th November 2009 at 6:21 pm

    If the FSA back down on this they will look like fools. Its not going to happen.

    I can imagine AIFA’s challenge “yes we want our members to be able to continue to give advice on potentially large and complex cases with 2 multiple choice exams and an A-Level (thats being kind) written exam”. FPC3 has always been inadequate – a joke almost. Would you seek legal advice from someone with A-Level Law?

    If you lack the confidence and intelligence to pass 4 2-hour written exams I would seriously doubt your ability to give quality financial advice. We have all known that this has been coming for years so there can be no excuses.

  84. I don’t see why a competent adviser should be phased with exams. If you have 20 years experience & you have not mis – sold endowments because you understood the risks associated and you are not flogging investment bonds where a simple unit trust would be an ideal investment then you should have no problem going through the level 4 exams…

  85. Why hasn’t anyone at the FSA ever suggested we read this?
    Bearing in mind how much drivel they manage to produce, it’s hardly surprising if we miss this section!

  86. florence mccartney 4th November 2009 at 9:10 pm

    As an example. The nursing profession now requires new entrants to obtain a degree to enter the profession. What of the nurses in the industry who trained on the job with an examination at the end. Did they have to obtain a degree by a deadline to remain in the profession? Of course not…why?..they have a union to fight for them…and there would have been a public outcry!

  87. My view, and I am one, is that the financial services industry is largely occupied by people of average intelligence, (got A-levels, but not a degree, sort of person). My colleague always laughs when I call the financial services industry the “last bastion of the semi-educated”

    If you had a degree and the intellectual capacity, would you have gone on to become and IFA through choice? Answers on a postcard please.

    Indeed there are not that many people who have both strong intellectual ability and the necessary people skills to do the job of an IFA. I know this because in the five years within my own business, I have only ever hired people with a degree and only one out of 12 people has had the ability to do the job correctly and successfully. In all but two cases, the main problem has been lack of people skills followed by lack of desire.

    My own conclusion is thus, raise the bar by all means but it will lead to a dramatic fall in new entrants into the business. Those people who do have the intellectual capacity and desire to actually come into the industry may not have the necessary people skills to do the job.

    So I have a choice, pass more exams in the FS industry or do an MBA and get a more rewarding job.

  88. My experience of staff I have taken on has been exactly the same as anon above.

  89. I have been an IFA for almost 20 years and not once have I been asked what qualifications I hold. In competition I have to say that fee paying/so called higher quality brokers charge the earth and deliver little. The reality is that if you have under £250k you will get very little advice or ongoing service. The FSA needs to understand the issue that the RDR is a disaster for 95% of the population. Those with large wallets will get help everyone else will not.

    Examinations as they stand will do nothing to enhance the offering to the public it will just make it more expensive to access good advice. A much enhanced CPD regime would be much better because this would improve IFAs in a foused and ongoing manner. Those of us who get the enhanced exams will do what is necessary to trade on in 2013. The benefit of passing will not enhance the client proposition or make IFAs better qualified in the medium to long term. It just means that we will have to charge more in future to cover increased costs and because there will be less IFAs around we will get away with it. How stupid is that!!

  90. I have to agree that we should be inceasing our qualifications , I have level 4 but level 6 is a bit much as you would very rarely use this but some academically gifted advisers will and good luck to them- I am thinking of doing level 6 but will wait and see , the only issue i had with the CII level 4 exams was I studied at least 60-100 hours per exam but why does your diploma credits hinge on a 2 hr exam what about all the hours you have put in where is the CPD or recognition for this as there is none , there must be a better system for level 4

  91. Chartered Charlie 5th November 2009 at 2:47 pm

    There is a floor in many of the previous arguments against qualifications – namely how can additional qualifications possibly make you a worse adviser?

    It would appear from many comments that technical knowledge is very much underrated and experience/sales skills/people skills are very much overrated. I would much rather deal with someone who is not so nice but knows what he is doing than someone who is nicer but doesnt know what he is doing. “He gave us poor advice on our trust investment, we incurred a tax charge that could have been avoided, but he was a really nice man. If only he’d sat G10”.

  92. I think this is treacherous ground. The National Press may well have a field day accusing IFAS of not wanting to raise their game and of being Luddites.

    Chris Cummings is of course representing his members – which is entirely right. Unfortunately the gainsayers are in the majority. I say unfortunately because those who have made the effort may well wonder why they bothered.

    I am no advocate of the CII system of sitting like a superannuated schoolboy answering banal questions in a tatty, draughty hall at an uncomfortable desk. However I do think that saying you are ‘good’ and have plenty of experience is not good enough. There must be a way of proving your worth and competence. Just fighting against exams (as justified as this may be) doesn’t really look good unless a decent viable alternative – acceptable to the Regulator and appearing good to the general public, is offered in exchange.

  93. I may be doing Mr Katz an injustice but this is the first time I can remember seeing such an unequivocal statement from him as “I am no advocate of the CII system of sitting like a superannuated schoolboy answering banal questions in a tatty, draughty hall at an uncomfortable desk.”

    And yet that is exactly where our Regulator, the FSA, is currently positioned, with thousands of IFAs who do not sit and pass a series of “closed book” examinations in a hall (draughty or not) facing termination of their licences come 1st January 2013.

    I say “currently” because the FSA’s ridiculous and destructive stance on this issue is now under such effective, sustained and justified shelling from many quarters (of whom AIFA are just one) that, provided the pressure is kept up, they will be obliged to modify proposals that would have otherwise resulted in very many consumers losing access to trusted independent financial advice.

    As far as the national press is concerned, who can say what view they might take when the point is brought home to them that, come the FSA’s Brave New World on 1st January 2013, many of their readers will be at the mercy of the same Banks whose wretched misdemeanours in providing financial advice they are regularly exposing

  94. Harry – I have to say I am entirely with Roger Heath. I am saying lets improve our RELEVANT skills over a timescale that does not throw the baby out with the bathwater and allows new entrants to come in without them being so tightly tied in by the qualifications they have done that they cannot move away from the job if they decide it is not fo them becuase of the cost and time they have already incurred moving in to it.

    Lets not get in to the “what the consumer thinks” argument as you Harry would I suspect be the first one to say in other quarters that what the consuemr THINKS and is feed by the media and politicians is plain WRONG.

    Let’s change perception, not change what is right simply becuase of incorrect perception.

  95. RDR is an example of what your get when the government vests in the “executive” powers that it (the government) does not hold accountable! RDR will be the end of the FSA!

  96. No one is against exams although some interests may be served by portraying this view. In fact there are aspects of RDR that are logical and dare I say it acceptable. Unfortunately, the FSA have picked a fight that is unnecessary. This is an issue of choice for the consumer and now AIFA has made a stance we are seeing more and more signs of dissent to RDR.

    Exams will have a twofold impact:

    1. A reduction in IFAs
    2. The consequential increase in costs to the consumer

    What is wrong with allowing the consumer the choice of whom they deal with? Make level 4 compulsory for new entrants only. If the average age of the IFA is 54 then within 6 to 11 years the FSA will have what they want without the cull of advisers projected in 2012. Many advisers having already started on the exams will also continue. This is a fight of the FSA’s own making and there is a simple solution to it.

    Finally, here is a list of providers and interested groups and what they are saying. I have listed these before and will do so again and again. I can list these as often as the FSA can ignore them:

    Otto Thoresen – CEO Aegon “The RDR is only helping wealthy customers”

    AXA April 2009 “We will lobby the FSA to make sure the RDR does not mean less are able to access advice”

    David Cox – SuuqeaMarch 2009 “Two million clients could be left without an IFA after RDR – 40% could leave the industry”

    FSCC January 2009 “Financial advice will be less widely available post RDR”

    Institute of Financial Services “RDR will impair financial advice before improving it”

    Alasdair Buchanan Scottish Life November 2009 “Sales advice is a real cop out and extremely confusing to investors”

    Stephen Gay – AvivaJune 2009 “The regulator has failed to consider the danger of adviser charging limiting access to advice for those on lower incomes”

    Lord Lipsey “Consumers in the middle (not high net worth or money guidance fodder) to be sold products by banks under the contradiction that is sales advice”

    Walter MerricksChief Ombudsman “I think it would be unwise to count on the assumption that complaints from the retail investment world are suddenly going to go down as a result (of the RDR)”

    Deutsch Bank reportAugust 2009 “There has been industry talk of 30% or even 50% if IFAs exiting the industry post 2012, which is not impossible”

    Paul Selly HBOS “Bancassurers set to benefit”

    Richard Howells Director Zurich LifeJune 2009 “The big question mark is still around what benefit it will have for the ultimate consumer.I am still not convinced that all of these changes, when you sit down with a consumer and explain them, actually give rise to a consumer benefit that I can really hang my hat on.”

    Martin Lewis Money Saving Expert June 2009 “There’s a worrying possibility that the FSA is about to kill off independent financial advice in the UK for all but the wealthy. I do hope I’m wrong. I’m not convinced most people will want to pay for advice. The commission route has the advantage that you don’t pay a fee each and every time you want information; you can go without the worry of laying out cash. What I find most galling though is that bank-based advisers – those primarily responsible for PPI misselling, endowment mis-selling, investment mis-selling and generally poor advice all round are still to be allowed to be remunerated based on the number of sales.”

    Janet Walford OBE, Editor Money Management Sept 2009: “I am not paranoid enough to believe that the FSA has a hidden agenda to do away with small IFAs, but the law of unitended consequences may well mean that this will be the result. This is especially the case when set alongside the myriad of other proposals that are costing some £430 million to set up, with ongoing fees of £40 million pa thereafter, a mind boggling amount of cash.

    Peter Hamilton barrister, Source: Money Management Oct 2009, Scrapping the FSA by Marie Jennings MBE: “The Financial Services and Markets Act does not permit the FSA to cancel an authorisation simply because the FSA has changed its views on what the appropriate qualifications should be….It is one thing to impose new rules for new entrants to the IFA profession, it is quite another thing to disqualify someone who is already qualified.”

    David Hazelton of Tax Incentivised Savings Association(TISA) 30/10/09: The RDR could be detrimental to consumers both in terms of higher product charges and an increase in the cost of advice, warns the Tax Incentivised Savings Association(TISA). Implementation costs for the RDR are being “seriously underestimated” and product charges will consequently have to be raised.

    Bankhall managing director David Golder 03/11/09: “We say write to the regulator, write to your MP. Do not let the FSA get away with some of the things that will lead to the widespread decimation of our industry.”

    Robert Kerr, head of retail distribution development at Scottish Widows says: The RDR could have the unintended consequence of “disenfranchising” the majority of consumers from financial advice . “Our key concern is the RDR proposals will act to drive advice upmarket, with financial advice becoming the preserve of the wealthy leaving mass-market consumers un-served,”

  97. Maybe Chartered Charlie should take a GCSE in English as most arguments have never been ‘floored’,(sic)

  98. Simon,

    The series of quotes you’ve assembled in your post this afternoon makes for a devasting and concussive critique of the RDR.

    Just as in Danny Kaye’s song “The King is in the altogether, the altogether…..” people are now beginning to see what has been in front of their eyes all along – stripped bare, the RDR is an elitist’s charter which, if implemented, would result in massive consumer detriment.

  99. As a new entrant into these exams I feel its ridiculous to expect people like myself to have to be QCF4 by mid next year and if I do not get there by then what would happen with the qualifications I had achieved. After speaking to FSA and skills council, nobody can answer the question. Keep up the good work Chris as I think what your doing is right

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