Just over one year on from the RDR and opinion on the impact of the overhaul of financial advice regulation remains split.
Although the regulator has put a gloss on the number of advisers that remain in the industry, many people remain concerned about the growing difficulty that lower earners have getting access to financial advice due to the drop in the number of advisers and changes to the way charges have to be presented to clients.
However, there is one area where the RDR has been an undoubted success – driving up professional standards for advisers.
One of the basic requirements for advisers to remain in business after 31 December 2012 was achieving a QCA level four qualification in financial advice but the FSA said it was keen this was seen as the bare minimum and that advisers would continue to improve the level of qualification.
It seems many advisers and businesses have decided one way of standing out from their peers or demonstrating their value to clients is the achievement of higher qualifications.
In February, the Chartered Insurance Institute announced the 4,000th adviser had achieved chartered status and this month the 600th firm was awarded chartered status.
Gloucester-based firm Cass Stephens Life & Pensions was the 600th company to gain chartered accreditation and director Paul Bird says the achievement reflects the general drive to achieve higher standards across the industry.
“I believe the sector has an appetite for learning right now both to improve our technical knowledge and demonstrate the highest possible levels of professionalism to the general public.
“There is a great deal of pride in gaining qualifications such as this but the real benefit comes in terms of what we can offer our clients as a result and the increased confidence they have in our services. Regulatory pressure is not an influence in our case. Instead, this drive for higher technical competence is being driven by a mixture of pride and professionalism.”
Personal Finance Society chief executive Keith Richards says: “Corporate chartered financial planning firms are demonstrating a tangible culture of on-going commitment to higher technical knowledge and professionalism which reflects the overall attitude and commitment of the advice profession in general.”
Imperial Financial Planning senior IFA Michael Doy was the 4,000th adviser to achieve chartered status and he says after the initial regulatory drive to improve his level of qualifications, he decided to voluntarily increase his level of qualifications as he could see the benefits for his business.
“After gaining the necessary RDR qualification in 2012, I realised how it had helped me and I wanted to carry on further. Going on to become chartered has helped increase my technical knowledge and confidence, created better business opportunities with clients and given me the expertise to expand into other areas, such as estate planning for example,” says Doy.
“It takes a fair level of commitment but the potential benefits on a personal and business level completely justify the decision.”
It is not just the PFS that is seeing an increase in the numbers of people achieving QCA level six qualifications.
In January, the Institute of Financial Planning announced that Joanna Hague, a paraplanner at Doncaster-based Investment for Life, had become the 1,000th certified financial planner.
Hague says: “The CFP certification process has brought together all the things I have learnt over the past few years of studying. It has helped me to understand the process of financial planning and I know that I’m a more valuable paraplanner within Investment for Life as a result.”
Institute of Financial Planning president Rebecca Taylor says the qualification is not just a certificate to be framed but provides real benefits for businesses and their clients.
Taylor says: “CFP certification is not just another certificate to hang on the wall or a means of providing letters after your name. It is rare for a qualification to provide real, tangible business benefits for those who complete the process. By engaging with the six- step financial planning process, you will not only take the service you provide for your clients to a new level but also improve the profitability of your business too – something which, since RDR, is more important than ever.”