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Fay Goddard: ‘Firms should not be forced to get QCF level 6 qualifications in future’

Fay Goddard 480 Alt

Personal Finance Society chief executive Fay Goddard says the regulator should not force advisers to attain QCF level six qualifications in the future.

Speaking to Money Marketing at the PFS annual conference in Birmingham last week, Goddard said any move to push up the minimum qualification from QCF level four would be unnecessary.

She said: “I do not want to see the adviser community put through mandatory qualifications again. I saw it in 1997 with FPC and I have seen it again now. While there could be different levels for different specialisms, I am comfortable with level four. I would not be comfortable with a blanket approach to level six if advisers sold any investment product. There is no need for that. Firms working towards becoming chartered do so because they want that status.”

Goddard announced last week that she will be stepping down from leading the PFS next year. She said she has almost achieved her five year vision for the professional body to provide advisers with qualifications support ahead of the RDR and to grow the chartered profession.

She said during her tenure she has seen attitudes to the RDR change among advisers, with “RDR rejecters” reluctantly accepting the change and “complete converts” who are proud of their achievements as a result of the increase in qualification requirements.

But Goddard said: “I do not underestimate the challenges firms will still face. There have been unintended consequences and there are still a lot of business issues outstanding, such as legacy products, the inconsistency of adviser charging approaches by providers, fund managers and platforms, VAT, and numerous other things. It is going to take time to identify these operational issues that still need to be resolved.”

Goddard added she remains concerned about the way different providers facilitate adviser charging, and whether that will end up influencing product selection.

She said: “The worst possible outcome is another kind of bias is created which does not benefit the consumer. A simple example is company A facilitating adviser charging on an investment bond, and company B doing it in a different way. Will that drive the product selection, and will that be based on what benefits the adviser’s business rather than what is right for the client?”

Goddard also raised concerns about regulatory uncertainty for firms that declare themselves as independent from next year.

She said: “The danger for firms is they may interpret the rules one way and the FSA another. If there are grey areas, I would like to think the regulator will take a pragmatic view to put firms on the right track, rather than storming in with enforcement action.”

Goddard believes a drop in total adviser numbers is “inevitable” post-RDR, with some businesses unable to survive and greater market consolidation.

Goddard said: “There will be people that will not or cannot pay for advice, so a growth in direct sales is likely. But I do not think this will be just through banks or providers, it could well be advisers setting up a direct to consumer service, and we are already beginning to see those emerge. My concern still is we need to find a way to deliver an advised proposition to service that middle ground.”

Goddard said her message to the adviser community is to be proud of what they do.

She added: “The future will be about what the majority of people are doing today, rather than what the minority did yesterday. I believe it is a great profession with a great future, but you do have to change and adapt, and advisers have been doing that for as long as I can remember.”

Goddard will remain as PFS chief executive until a successor is appointed, but she expects to step down by March.


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There are 9 comments at the moment, we would love to hear your opinion too.

  1. I think it’s safe to say that the IFA community is or is soon to be a cottage industry and we’re raising our qualification levels simply as a a form of product differentiation.

    Like any guild once you’re in you want to raise the barriers to entry. Let’s face it the only people that pay are the public.

  2. Roman Duzinkewycz 20th November 2012 at 9:02 am

    ‘Almost achieved’ – says it all I’m afraid – typical of the industry and the hierarchy within it – on we go – aimless, pointless – poor clients who won’t know what is going to hit them very soon.

  3. Level 6 should be the level for new entrants (with an element of experience also required to meet Chartered Status) and firms should have to meet BS 8577:2012. That is the professional way forward – the FSA has been to focussed on individual qualification and not on firms. TCF is too woolly and fluffy.

  4. Goddard believes a drop in total adviser numbers is “inevitable” post-RDR, with some businesses unable to survive and greater market consolidation
    Believe it or not Fay, there are real people with real lives,behind your crass statements.
    But what do you care?
    Enjoy your retirement in the knowledge of all you have done for the adviser community.

  5. This sounds painfully obvious, but the question of qualifications has to be viewed alongside the question of professional standing. I think that all IFAs I have encountered regard themselves (and want to be regarded) as on a par with accountants, solicitors and other professionals.

    If you take the CII route, after 5 short multiple choice exams and one longer written exam, you come out qualified as a financial advisor. With a modest effort, I think it is perfectly achievable for someone with no prior knowledge or experience to complete the qualification in under a year, whilst working full-time. That’s a very short time.

    Much shorter than the time it would take to qualify as an accountant or solicitor, for example. Financial advisors won’t be regarded as on par with other professionals if it is seen as quick or easy to get in.

  6. Raising the standard required to level six is unnnecessary and would succeed only in driving even more advisers out of the industry. I have no axe to grind-I hold a level 6 qualification-but I am getting mighty tired of this debate which suggests to me kite flying by those agencies who exist to promote further educational activity.

    CPD by all means but give further qualifications a rest

  7. Fay may have the best of intentions but when change is foisted upon a business sector by civil servants to view such change negatively is a civil right. To agree wholeheartedly to such changes is also a civil right but we have that right to think for ourselves.

    I was at one of the 4 UK PFS roadshows where we were asked how many of us were wearing our Chartered Lapel Pin which was the ‘silver bullet’ of PFS marketing of the Chartered Brand.

    The fact that Fay does not address the unlevel playing field that the RDR produces is not surprising as the FSA care not to consider it either. product manufacturers tying to advisors or vice versa who offer Tied propositions can continue as pre RDR – to what purpose??

    Yes Fay lets get the min quals up to Level 6 and start actually promoting the Chartered Brand and quals to the mass affluent rather than asking us to wear Pin Badges and hope that the Public notice.

    Chartered Financial Planners pay more in CII/PFS dues and also have paid more over the years to actually become Chartered after sitting many exams to qualify.

  8. Silver Bullets have their uses

  9. @anon

    silver bullets might kill the odd werewolf but the lack of PFS/CII marketing of chartered brand is no use to man or beast.

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