At least half of the advisers within corporate chartered firms must be chartered individuals by 2020, under overhauled standards for chartered firms unveiled by the Chartered Insurance Institute.
Previously, the CII required chartered firms to have at least one board member with the chartered financial planner title, and for 90 per cent of customer-facing staff to be members of the CII or Personal Finance Society.
But Money Marketing can reveal that from July 2017, 25 per cent of a chartered firm’s advisers must be chartered, rising to 50 per cent of advisers by January 2020.
The CII is introducing a number of additional higher standards which will come into effect from July.
Firms will have to meet various criteria around conduct and culture, including a commitment to behave ethically and to aspire to exceed the minimum regulatory requirements. Firms must also ensure that customers have access to a chartered adviser within 10 days of requesting it.
In addition, tougher oversight rules will see the CII sample test 10 per cent of chartered firms to ensure they are meeting the criteria.
CII director of financial services and insurance markets Steve Jenkins says: “Chartered status is becoming more popular, and that means we have a responsibility to ensure the requirements are fit for purpose.
“We have to make sure the title bears scrutiny and meets consumers’ expectations. During our thorough consultation process, customers told us that when they engage with a chartered firm they do not expect to have to look far to find a chartered financial planner.
“For small firms, the vast majority are there or thereabouts already, but for some of the larger firms it will be a challenge. We are already in discussions with those firms on the best way to proceed.”
He says the new requirements “should feel like a bit of a stretch” but should be doable for firms.
Jenkins continues: “We have had some challenge from existing chartered firms about what are we doing to protect the brand. The chartered brand is only as strong as the weakest member.”
He says the CII will continue to review the criteria every three to five years.
In November 2013, the CII published a consultation on criteria for chartered firms, which closed in January 2014. This proposed that a chartered financial planner must be “prominent” in the advice process, of which having 50 per cent of a firm’s advisers holding the chartered status would be one option.
Jenkins says: “The consultation process did take quite a bit of time but a balance needs to be struck between getting on with it and listening to all stakeholders.”
There are currently 4,500 chartered individuals and 630 chartered firms.