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Clarity case

In the first of three pages on education and qualifications, Anne Kiem urges advisers to select a programme of study which suits their skills, knowledge and experience and enables them to communicate complex information clearly and effectively to clients

Now that the long-awaited consultation paper on the retail distribution review has been published, the real effect of the RDR on the advice industry is becoming apparent, particularly in the area of qualifications. Advisers across the sector must now examine how they will balance their challenging workloads with the requirement for further study in order to complete a level 4 qualification by the 2012 deadline.

However, although the RDR will impose such professional learning standards across the sector, it is not, nor has it ever been, about a one-size-fits-all approach. Advisers must be able to develop their professional skills and experience in a way which most benefits them both now and in the future.

A choice of education providers and qualifications provides exactly such opportunity. It enables individual advisers to select a programme of study which best suits their own skills, knowledge and professional experience and provides the tools they need to progress their careers.

What is key is that advisers are able to provide a service that is built upon a firm foundation of knowledge and understanding and, most importantly, are able to apply this in practice. It is crucial that this goes beyond simply having product knowledge. Advisers must be able to communicate complex information clearly and effectively to their clients and to provide advice that enables those clients to understand the options available. These are values which have been embedded in the qualifications process. The Diploma for Financial Advisers (DipFA), for example, has been specifically designed to enable advisers to draw upon their existing professional experience at the same time as dev- eloping skills to evaluate the options available and to explain and justify recommendations in a way that is understand- able and readily accessible to clients.

The Diploma for Financial Advisers also allows advisers to work within their own preferred learning style and uses a variety of tools, including online knowledge-gap analysis, learning styles analysis and comprehensive study guides, to inform the adviser where their technical knowledge might be improved.

Again, this is crucial in enabling advisers to choose the right approach for them. An example of the type of questions that advisers will face in the coursework element of the DipFA can be found below:

Question 1
You have just been introduced to some new clients who have various investments. They have told you that their investments consist mainly of unit trusts and investment bonds but wonder if they have a suitable split in their investments of these two product types.

When advising on investment bonds and unit trusts, state the factors that should be taken into account when making a choice between the two types of investments.
(15 marks maximum)

Although the RDR will impose such professional learning standards across the sector, it is not, nor has it ever been, about a one-size-fits-all approach

The qualifications required under the RDR are still in flux. New qualification standards will be announced in March and consequently changes will be made to all existing level 4 qualifications to ensure that they meet those standards. However, that is no reason for advisers to delay engaging with the qualifications process. In fact, the reverse is true.

The FSA has been very clear in its commitment to a no regrets policy, which will enable advisers to fill any gaps in their learning with CPD, and the longer advisers leave it before looking to enhance their professional skills and formal learning, the more difficult it will be to complete their exams before the 2012 deadline.

Assessment methods
Alongside the variety in qualifications open to advisers, increased attention has also been given to different assessment methods. In particular, given that the FSA has unequivocally ruled out grand-fathering, there has been much debate on oral assessment as an alternative for experienced financial advisers seeking to meet the level 4 standard.

Taken at face value, oral assessment offers a potentially attractive alternative to a traditional examination route and, for some, will conjure up an image of a collegiate discussion between like-minded professionals. It is well worth sounding a note of caution, however. While the finer details of the process are subject to further consideration, two things are certain – it will be neither a soft or cheap option.

In the context of RDR, to be effective, oral assessment will need to be directly comparable to the level of knowledge demonstrated through completion of a level 4 qualification. Such oral examination would not be able to replicate the exam process per se but it would ensure that advisers are able clearly to justify recommendations and explain views when challenged and that they hold a depth of knowledge comp-arable to those assessed via other methods.

The issue of cost is also worth considering, particularly when taking into account the need for an experienced panel, time for preparation and assessment and a robust feedback process.


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