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Bridge the knowledge divide

The adviser is first and foremost a firm’s best product and gaining level four will mean bridging knowledge gaps in the long term and enhancing the business

Nick Kelly Managing director Sesame

There are myriad reasons why becoming QCF level four qualified is going to be difficult, not least the estimated 400 hours of study time needed to pass the various exams.

This will invariably take up precious time that could have been spent with clients. But focusing solely on the short-term difficulties and disadvantages, namely the time “wasted” and the out-of-pocket expenses, makes it easy to miss the longer-term advantages of the qualification. Put simply, an adviser cannot advise on what they don’t know and this investment in time and effort will address exactly that.

Just because the majority of advisers have got by with experience and CPD despite not having a detailed grasp of, say, taxation, at diploma level, it does not mean that acquiring this knowledge will not prove valuable in extending the scope and depth of the financial planning topics they can confidently discuss with clients. These additional “touch points” of client interaction could help the adviser to spot and take advantage of opportunities to benefit the client that may previously have been missed.

So the real question is how best to use these skills and qualifications to improve the bottom line of the business and build greater value. No one would deny that it is going to be extremely tough to run a business, make a living and put in the time to study and pass these exams but the payoff should make it all worthwhile, especially as we recognise that first and foremost an adviser’s product is him or herself. Therefore, the extra time and effort invested in that product will inevitably enhance the business and add further value to the client.

Likewise, I can see how it would be easy for advisers faced with trawling their way through rather austere and academic looking study material to become frustrated by sections of the syllabus that they are unlikely to need to use in a reallife advice situation. And it is certainly true that there are some detailed elements that are of little immediate relevance but rest assured Sesame has been sending its feedback to the examining bodies on this and other issues.

In reality, that applies to a very small part of the syllabus and despite the difficulties that advisers face in finding time to study, what we have seen over the years is that most recognise that they have acquired valuable new technical knowledge that is relevant and, most importantly, valuable. We have real-life examples of this. Most recently, we ran a study programme involving two face-to-face workshops for around 90 advisers who took the CII’s JO1 (personal tax) exam in October.

This particular exam covers seven learning areas – how the self-assessment system works, income tax, National Insurance, capital gains tax, taxation of investments, inheritance tax, and the impact of a person’s residence and domicile on their liability for UK tax.

Many advisers who went through this programme have told us since that the knowledge they have gained has allowed them to spot and follow-up on business opportunities that would previously have passed them by.

These advisers also told us that a detailed and thorough understanding of those seven learning areas covered by the JO1 taxation exam made them more confident about discussing taxation issues with clients, more confident about suggesting solutions and more confident to talk about fees – based on their perception of enhanced credibility.

So rather than – however understandably – being reticent about what lies ahead in the short term and the time this will mean spent away from core, profit-making activity, instead focus on the previously untapped business possibilities this will present longer term.

This investment in time and money has the potential to revitalise client relationships and could very well be the dawn of a bright new future, where advisers who have embraced the challenge are able to make the most of everything that they know and not be constrained by knowledge gaps.


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