The two main awarding bodies are the CII and the ifs school of finance. The CII has a well established level four accredited qualification – the diploma in financial planning – and the ifs school of finance recently launched its qualification that positioned itself as “tailor-made solutions to RDR”.
The CII diploma generally requires a candidate to pass four examinations whereas the ifs diploma requires one examination plus coursework.
It is hardly surprising that firms and advisers were confused and concerned about making a wrong decision. I was therefore delighted to see the FSA issue clarification regarding the proposed structure of a level 4 qualification.
Firms and advisers now know where they stand when selecting a route to level 4. The clarification indicates the need for advisers to focus on composite professional qualifications, an established example being the CII diploma which provides a range of eight level 4 units from which to choose.
The reference to filling any gaps with CPD is interesting as the FSA clearly felt the need to go further by stating that “for this statement to apply, and for any gaps relative to new knowledge requirements to be dealt with via CPD, all parts of the qualification must be accredited at a level equivalent to at least QCF level 4 – it is not sufficient for only some of the parts of the qualification to be at that level but others to be below that level”.
The FSA also points out that there must be a greater rigour of learning and application of critical thinking to demonstrate a clear difference in standards from the current level.
The FSSC will now commence its work deciding the breadth of coverage and content of the new level 4 qualification.
They will need to work with the adviser community to ensure that the outcome meets the FSA’s requirements but is also fit for purpose.
The new qualification must include modules (or units) that are relevant to the role of the adviser and that also test practical application.
The “core module” approach that the FSA has outlined meets this objective. Everyone giving investment advice should be tested in the areas mentioned. Beyond these, there should be a selection of specialist modules from which an adviser can select, depending on the field in which they operate.
The T&C rules require firms to ensure their advisers have the requisite knowledge and skills to perform their role and the modular approach described above fits well with the rule, allowing firms to determine which additional modules would be relevant.
Until the FSSC has consulted and the framework finalised, we will not know exactly what the requirement will be but the FSA’s clarification statement should bring reassurance to thousands of advisers.
Faye Goddard is chief executive of the PFS