I was one of the first to be granted chartered financial planner status, but I wonder what the future is for the accolade. The Personal Finance Society does not seem overly concerned about erosion of the title, seemingly allowing its abuse with impunity.
There have been high-profile incidents of more than one chartered financial planner involved in poor advice. In one case, the clients in question (many of whom were left thousands out of pocket) did everything that could have been expected of them, seeking advice from an ostensibly independent, fee-charging chartered financial planner referred to them by friends or found and validated through Unbiased and the FCA Register.
There have also been accusations that the chartered financial planner status at company level is of little value and too easy to obtain. I have to disagree with the first point, as many discerning consumers only want to deal with chartered financial planners.
That said, this is often to the detriment of independence, weakened through Mifid II.
Unfortunately, I feel there is scope for worse outcomes in seeking advice from a restricted chartered financial planner than an independent financial adviser with the client’s best interest at heart but fewer exams.
As to whether it is easy, that depends on whether you have a predisposition to exams or a preference for study that reflects real world skills. I like to think I have both, but the individual chartered financial planner status could be achieved with no actual financial planning skills.
I achieved mine through examination and, until it was subsumed into the Chartered Institute for Securities & Investment, I was a member of the Institute of Financial Planning. The IFP was where real financial planning was done. It has since been a small part of the CISI agenda and I have cancelled my membership.
Chartered status is further cheapened where claims are made to hold the accreditation, even implicitly, which are not true. We can give firms that do this the benefit of the doubt and assume they do not understand the rules; after all, they may have several individuals that are chartered. But they should not describe themselves as chartered financial planners.
There are also firms incorrectly using just the word ‘chartered’ in their name. This seems even more bizarre, as Companies House forbids it, unless permission is granted by the professional body. Given chartered’s ephemeral (annually renewed) status, have they requested and been granted permission, or is this a Companies House issue?
Perversely, the FCA does not have chartered on its list of sensitive names, so one assumes it is content to let a firm use it even if it is misleading.
I have highlighted this to the PFS but it seems no action has been taken. It makes a mockery of the process I go through each year; not least because of the time and cost of recertifying, and the requirement to have non-customer-facing staff with Chartered Insurance Institute membership. In the case of those misleading consumers, what hope is there for the advice they give? If an adviser is not willing to be clear before engaging with clients, there can be little hope afterwards.
We should be protective of this status as we would the similarly abused term IFA. There are no guarantees but these terms used in the spirit they are intended should be a benchmark of quality.
I feel we have the worst of both worlds: a brand pushed as ethical but misused by those least deserving.
Alistair Cunningham is director of Wingate Financial Planning