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Are we overlooking the value of experience?

Qualifications are important but don’t overlook experience.

Not a day goes by without the RDR and the professional consequences of its introduction dominating the press. Do we all have the “right” qualifications? Can we remain independent? Have we done enough CPD and gap-filled on regulation, ethics and building society deposit accounts?

While I completely accept the need for the industry to become more professional in the eyes of the public and agree completely that we need to demonstrate procedural knowledge, I wonder if we are missing the point by setting purely technical or educational standards and potentially overlooking the value of relevant experience.

A well rounded financial adviser is a people person, as are most support staff. But we are not taught people skills on the whole, we acquire them by varying means. Some individuals are natural communicators, others learn by example, from George Kinder perhaps, or simply from trial and error.

I reluctantly hark back to my military background. I was 19 when I went to officer training college. Along with Queen’s Regulations, RAF law and in-depth weapons training, we were taught how to manage delicate situations, that is, how to break bad news, negotiate, arbitrate or deal with varying personal circumstances.

We were given a specific technical framework appropriate for the strategic role undertaken but also taught the soft skills needed to cope practically and diplomatically with difficult issues.

I was green behind the ears when I graduated but there was always a sergeant on the sidelines to mentor and coach those of us with less experience. These senior personnel were and are the crucial backbone of the armed forces, helping to form the careers of many a young recruit. I did not realise how valuable those transferrable skills would be.

But are we now about to lose a backbone of experience from financial services?

The PFS and other websites are crammed full of useful technical information, gap-fill, libraries and online seminars but should there be more practical direction?

e can seek our own assistance from other business development professionals but it is not a natural inclination to do so. We are more likely to turn to colleagues.

Going back to the military analogy – you need to understand the mechanics of a weapon before making a moral judgement to fire it. Soft and hard skills – they both definitely matter.

Fiona Sharp is a chartered financial planner at Almary Green


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There are 20 comments at the moment, we would love to hear your opinion too.

  1. You can’t expect a failed regulator like the FSA to understand or comprehend ‘experience’ as it is not something they can relate to from their Ivory Tower in Canary Wharf

  2. Ha!
    Experience counts for nothing with the Mandarins at the FSA who do not give a tinkers curse whether advisers can meet their draconian deadline.

    If we have learned anything from the dramatic systems failures in the recent November and December exams, it is that the current deadline is raising issues of concern with regards to the Health and Wellbeing of advisers who are now under so much stress when trying to maintain business levels for profitablility and study and take these daft exams.

    The deadline is wrong and needs to be put back by a year.

    Then no one will have any excuses not to achieve the requisite level.

  3. Good article Fee and the simple answer is yes we are! The consequences will only become measurable over the next few years ….. but by then it will be far too late!!!
    I wish all of those left in FS all the very best of luck. Myself, after 33 years, I’m about to turn the lights out and that decision means 5 advisers with a combined service to this industry of over 130 years will be out of work along with 4 admin staff. Just brilliant!

  4. It does not matter what industry you work in, experience is important. The FSA think by flashing a levekl 4 certificate you are going to be the best adviser since sliced bread. After 2012 no one is going to enter the industry if they are going to have to have level 4 before being able to practice. The government are pushing for apprenticeships, which is the same as having non level 4 person practicing with a mentor untill they have passed, or for those people come 2012, who are mid stream towards level 4, being mentored by someone who has. The problem there is the person who is being mentored may have more experience that those with level 4, but hey ho if it keeps Financial Services operating with every member of the public having access to independant advice, it does not matter

  5. Yes this all makes depressing reading; I have managed to obtain Level 4 and this has cost me a lot of time and money and will it bring additional business? I think not. For those who are willing and able I feel there will be a place for an IFA post RDR and that will be to service a smaller but more wealthy client group. I only expect to be in the business for about five more years but, if I was 20 years younger, would I consider a career in this industry? NO!

  6. Michael Wainwright 4th January 2012 at 4:05 pm

    Do not be reluctant to hark back on your military background. It is a stupid young officer who goes out into the field / air / onto the sea armed with ‘knowledge’ and ‘authority’ and thinks that is sufficient. The right experience, which at that stage can only be gained from others, is vital. That is just as relevant in the financial world.

    As a reservist I have found that my military skills enhanced my civilian skills AND those civilan skills also helped on my military life.

    I have seen life offices retiring early those people with experience, particularly of past contracts, to the detriment of advisers. I also feel more comfortable when being advised by someone with practical experience of the issues that interest me, rather than some high level exam pass. As a Compliance Consultant I see letters written by very well qualified by examination advisers, whose lack of experience shows when they try to explain issues to clients.

    It is difficult for the FSA to bring the need for experience into the regulations; but it should try to ensure that the rules it brings in do not mean that those who have the experience will leave the industry.

  7. David Cowell, Myddleton Croft 4th January 2012 at 4:09 pm

    An extremely pertinent piece very well presented. Thank you.

  8. People have been argueing until their “blue in the face” that experience and not Exams is the key to quality advice, but all regulators are deaf.
    Just ask the simple question? How many advisers plan to remain in the industry? How many have already left? and how do you pass on the costs of Examination when we all know that income will drop like a stone. Being Chartered but bankrupt is the Holy grail to the FSA
    he simplest route would be to assess the quality of the advice that advisers already give to their clients, examine the diversity, look at tax avoided, did the advice intergrate with the clients Legal & Accountancy requirements: Has the adviser been subject to an adverse number of complaints?
    IF the all the above are positive, i’d say the advice and the adviser was tip top. – job done. Too simple, but very cost effective.

  9. Good article. Passing exams has always demonstrated your ability to pass exams…nothing more. This industry is, and always has been, a people business however you cannot empirically demonstrate people skills so the regulators will tend to ignore them. I get the feeling that our Lords and Masters in Canary Wharf would prefer us all to give ‘guided advice’ while paying lip service to independence. Welcome to the new world where IFAs will morph into form filling, mindless automatons.

  10. Douglas Baillie 4th January 2012 at 4:48 pm

    The problem is that all of the common sense, and the hard earned experience that goes with it is not in the FSA, and they will never accept anything other than the exams as proof of competence.
    As an RAF pilot, and subsequently as a commercial aircraft captain, I too learned most from my experiences, mostly from my failures and my successes. Interestingly, I also worked quite closely with another government ‘authoriry’ called the Civil Aviation Authority (CAA), and I have to say that the FSA could learn a lot from them. In particular, an aircraft operator can discuss their particular operations with an assigned CAA operations inspector (who is of course a pilot himself, with loads of actual experience), and if needs be, edit their operations manual, so that it complies with The Air Navigation Order to the satisfaction of the CAA. This very open, two way flow of practical issues and day to day real world operations, is regared as a significant contribution to flight safety, as reduces errors, and leaves little or no room for doubt or innapropriate interpretation. So, based on the EXPERIENCE, I run my IFA business with an ‘operations manual’ based on the CAA model that eveyone follows. But guess what? The FSA aren’t interested in discussing it with me, or how it helps all of us to be more compliant. So much for experience being used to actually abide by, and comply with the FSA rules!

  11. Great article, i just hope and pray the FSA relent and give us “useless at exams brigade” more time.I am sitting level 4 via the IFS route, i passed the first stage [whooppee!] then just before Christmas i had my results for stage 2[failed] so i not only had a…..Christmas i have to to take the exam again.Stage 3 is in a few weeks and if that goes belly up then…. well not good!Another year would allow me not to panic, still generate business and give proper service to my clients.I am 57 and i want to stay in the industry for at least another 3 years…. more importantly my clients do as well! Common sense PLEASE prevail

  12. I have always had a problem with nerves. I shake rather a lot and couldn’t be relied upon to carry a cup of tea and saucer without spilling most of it. I’ve got 110 points towards the 140 that I’m told that I need in order to reach level 4. I’m panicking already, just thinking of the next exam. Exams of the nature we are expected to pass are unfair to older advisers and do little to improve standards. I’m afraid that we’re all doomed. Doomed I tell you, we’re all doomed!

  13. A voice of sanity and singular charm for a change.
    It is a striking paradox that whilst my clients and immediate peers might attach the greatest value to my 40 year’s experience as a practitioner and the modest wisdom I have garnered on my journey, it is a commodity held in contempt by our regulators and evidently an object of fear for those who claim the “qualified” moral high-ground. And, Yes, I shall be hanging up my bowler by the end of the year (though I don’t wish to) because, working 60-70 hours a week servicing the needs and expectations of my clients, I lack the time (and the inclination, more so) to ‘study’ that which I already know and the other 80% which is wholly irrelevant to my delivery of informed, skilful and intuitive advice. Funny thing is, I didn’t need some sanctimonious bureaucrat to tell me 40 years ago that I had both the need and the professional duty to educate myself; I had the wit and innate desire to work that one out for myself.
    To every rule there are, of course, exceptions, but the curmudgeon in me is driven to observe that while I know many highly experienced, sensitive and skilful advisers who lack Level 4 qualifications, I have met a distressing number of “qualified” but half-witted advisers who are festooned with diplomas and saturated with ‘information’ but with little understanding of how to apply it and shape it in a manner that is of value to those they seek to advise.
    Before those of my Certified and Chartered peers vault indignantly to their elevated equine conveyances, I should add that I am not disdainful of their academic achievements or the need for the advisory sector to professionalise (I have been shooting my mouth off since the early eighties about the need for the industry to professionalise and engender greater integrity in its practices), but it would be nice that just an iota of acknowledgement be given to the value of experience and professional sagacity that cannot be found twixt the covers of a textbook.

  14. I’ve sold life insurance bonds and switched pensions for 30 years. Gives me huge experience in the modern financial services world!

  15. The only time ‘experience’ outweighs ‘qualifications’ is when people are given jobs at the FSA.

  16. Yes of course experience is important. Experience and qualifications are not mutually exclusive. Qualifications show you know stuff. Experience shows you know what to do with it.

  17. Look at what all the qualifications in this and that did for the regulators.

  18. I would only add one thing, in addition to experience, you must have integrity, there have been some “experienced” bad apples who have been eventually caught and fined, the biggest shame will be the loss of many honourable diligent experienced IFA’s through the FSA’s beligerance,

  19. I have all Gaps covered and have a record of 143 points (although the CII have said they’ll only count 138 of them, which I will dispute in due course whilst doing another non CII exam which actually interests me)
    Like your writer, I was a reservist (TA for 16 years) andI have found that my military skills enhanced my civilian skills AND those civilan skills also helped on my military life until I had to choose between the two and the one which supported my family won.

    II had 8 years between teh ranks of Craftsman (Private) and Corporal before becoming a Sargeant where I remained for the rest of my time, simply because although when I went on my artificer selection borad (takes you from Sargeant to Warrant Officer asa tradesman) it was felt that although I had the same Army qualifications as my peers, my lack of mechanical experience in civvy street meant I’d be better applying for a commission in a different Corps. I decided to stay where I was for the following 8 years and saw the Army change to allow those with non mechanical backgrounds to become Artificers instead, despite the fact the Military course for TA was weeks compared to months for “Tiffys”. It did however make the numbers look good on paper.

    You need both qualifications AND experience and they don’t have to be in the same body/person if the structure is right and we used to prove it all the time as I was in a deatchment of 1 platoon and ancillaries (30 men and women) who when entering 10 man teams, often beat the rest of the company in regional competitions, despite the fact the company had 120 people to choose their teams from, simply by getting the mix and team work RIGHT .
    There is NO teamwork with the FSA and anything the seem to encourage and enforce, unlike the CAA example mentioned earlier where polits work WITH the CAA.

    I was always very good at taking orders, but the orders coming from the FSA are like the ones in the Army you would be requried to disobey i.e. contrary to the rule of law.

  20. Re Douglas Bailliie Letter:
    This is an excellent portrayal of how an Industry should and must work integral to compliance and regulation.
    I feel that Mr Baillie should write his expereince and send them to Select Committee.
    It is very supportive in how business should work.
    I feel the TSC would look at his letter and think. This is not complaining for the sake of complaining, but good honest sound advice.
    I would say 95% of all advisers would agree.
    Go on Douglas write to the TSC

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