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Educating IFA

Karen Houlihan Divisional director of societies,CPD and research,Chartered Insurance institute

A recent survey by the CII shows there aresignificant differences in the

educational professional support that employers give their staff in the

financial services community.

In today&#39s low-inflation economy, the scope for direct salary rises is

limited but the prospects for increasing employability by getting

additional qualifications remain.

Most employers cite a clear market advantage in having professionally

qualified staff. This assertion is frequently backed by research among

consumers which shows they believe advisers should be qualified and that

they would pay more for products if this resulted in consumer protection.

But how much help will an employee get from their employer if they decide

to study for qualifications? Late last year, the Chartered Insurance

Institute&#39s Society of Fellows commissioned a report into the scope of

educational and qualification support across the financial services


The research was based on questionnaires answered by human resources

directors and senior managers at a wide range of employers representing

nearly 130,000 employees, more than 55,000 of whom were employees of

product providers and 7,500 who were employed by IFA firms.

You should always bear in mind that the training package offered by

employers is an important factor when considering job opportunities. How

does your current package compare? How many employers pay the expenses of

the exams and what other incentives are offered?

Is there a common standard across the industry which employees can expect

from their employers? Did employers pay annual subscriptions for membership

of professional bodies such as the CII and Sofa? Did they offer financial

incentives to staff to qualify by recognising success with one-off cash

awards and salary increases or by giving automatic promotion?

The research reveals clear differencesas well as common ground in the

extent and components of support packages offered by employers in the same

sector and also across sectors. This can be seen, for example, when schemes

offered by product providers and IFAs are compared.

Product provider and IFA policy on education support is almost invariably

set at head-office level (90 per cent of respondents) but line managers

often have discretion to vary policy to meet local operational needs.

Many employers already recognise the benefit of educational support for

their staff by keeping their policy under close review. Most review their

policy annually. Just under half of respondents make studying for specific

qualifications mandatory for certain staff beyond that required by the

regulators. A further 11 per cent claim the need for a post-professional

qualification, with the MBA being by far the most popular choice.

The most popular method of support is to pay study fees closely followed

by payment of exam fees and offering exam leave. Although study leave is

found to be another popular method of support across the industry, it is

less common in the regulated sectors. Only 45 per cent of these employers

offer staff study leave compared with 63 per cent across the general and

life profession.

Although day release is another popular method used by product providers

to support employees (nearly three-quarters of respondents offered this

option), none of the IFA firms who responded offer study leave in any form,

perhaps reflecting the time pressures on IFA employees.

It is noticeable that some employers have loan schemes for exam and

tuition fees. This is much less popular with providers than with IFAs. If

the loan is written off on passing the exam or qualification, only success

is rewarded. It could be argued this is why this option is popular with

employers who see it as a positive incentive which need not involve

up-front expenditure.

Across all sectors, nearly half the employers pay their employees&#39 annual

CII and Sofa subscriptions but none of the independent advisers offer this


Differences also emerge between the product providers and IFAs when it come

s to rewarding success at FPC and AFPC level. Forty-five per cent of

providers pay cash awards for success at FPC compared with 50 per cent of

IFAs. When it comes to passing AFPC, however, providers are more likely to

offer a financial reward than IFAs.

Many employers pay a one-off cash bonus on qualification while other

employers choose to pay a salary increment. These varied quite

considerably, both between qualifications and within them. Of those

organisations which give a cash reward on completing FPC, the lowest award

is £125 and the highest is £500.

Payments for AFPC are higher although only five companies in the survey

pay a cash reward on completion. These payments range from £150 to

£1,000 although the average is around £600. An additional

incentive offered by a number of employers is a cash award per subject

passed and a handful give milestone awards on partial completion,

encouraging employees to stay motivated.

Twenty-three per cent of respondents say they would rather offer other

study incentives for staff such as the use of a resource centre for study

or a facility to book a room for thispurpose. When providing private study

arrangements, respondents generally offer time off as well.

Forty-five per cent of product providers and IFAs offer study leave for

FPC and52 per cent for AFPC.

The most generous provision of study leave was 10 half-days per exam plus

a further one day per subject before the exam and the day of the exam


The provision of paid leave for the exam varies considerably between

product providers and IFAs. Nearly three-quarters of providers offer this

support for AFPC exams compared with just 33 per cent of IFAs.

Continuous assessment is the preferred method of study for most

respondents and is twice as popular as college classes. Distance learning

through the use of study books is popular with providers.

This contrasts with the more comprehensive package of distance learning,

where assignments are dispatched to a tutor for assessment during the

course which is the option preferred by IFAs.

A follow-up to this study has already started and the results of the

research will be published next year.


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