What if we did not know as much as we thought we did? And what if some of what we learned was actually wrong? How would we find out? I do not have the answer but the recent introduction of a re-evaluation exam by the FCA and the Chartered Insurance Institute could be a step in the right direction.
It is a far from perfect solution, I will admit (I do not think it goes far enough and it is currently only voluntary), but as a method for assessing continuing competence, it is relatively cheap and easy to deploy.
And before the bleating starts about other professions being able to rely on continuous professional development, and not be subject to retesting, that does not make them right, does it?
Frankly, all professions should be aiming to rise to the standards of the airline industry, in which pilots are subject to strict annual assessments they must pass to be able to continue flying, including six-monthly assessments in flight simulators (on top of everything else they do). By comparison, the proposed annual re-evaluation exam is a walk in the park.
But putting aside the talk of re-evaluations, I want to return to my opening comments: what if we did not know as much as we thought we did? And what if some of what we learned was actually wrong?
I have long thought that even when we finish the last exam of the Diploma, we are barely competent, and with knowledge fading, our technical competence diminishes quickly. With the Level 4 Diploma exams, most of the multiple-choice papers have a nominal pass mark of 65 per cent and the written paper to assess the application of knowledge (arguably, our day job) is lower, at 55 per cent. Crazy.
This means that anyone passing a diploma-level paper could have answered about a third of the questions completely wrong – possibly more if they have successfully guessed a few answers. That is worrying. Especially as there is no requirement to undergo any further formal assessment (unless it is a requirement of their employer).
So we start our careers potentially knowing just two thirds of what we might be advising on, and that is before our level of knowledge falls due to knowledge fade.
But what if some of the things we believe we know are also wrong? Is that possible?
Take a topic like ethical investing. Early study material talked about light and dark green ethical strategies, and that ethical investing was about excluding certain types of company, which would lead to lower performance.
Well, that is wrong today and it was probably wrong back then too. Yet I will bet there are some advisers still holding that belief and there is no reliable mechanism to pick them up and correct it.
The re-evaluation only looks at our technical ability and we all know there is so much more to our work.
How on earth do we deal with the unknown unknowns? If only we could develop the equivalent of a flight simulator for financial advisers. That would be something, right?
Dennis Hall is managing director of Yellowtail Financial Planning