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FCA and CII announce new exam to ‘reassess’ Level 4 qualifications

Hourglass-Clock-Time-Race-Measure-700x450.jpgThe FCA and Chartered Insurance Institute have announced a new test to reassess whether or not advisers with the Level 4 Diploma in Financial Planning still have sufficient knowledge.

From 1 October, the Regulated Retail Investment Adviser Re-Evaluation assessment will be available after a collaboration between the FCA and CII aimed at raising the standards and competence of financial advisers.

While advisers have to complete at least 35 hours of continuous professional development a year designed at keep knowledge up to date, the FCA notes that “not all firms test their advisers’ knowledge yearly as part of their Statement of Professional Standing, with many advisers never retesting”.

Only a few large firms retest their IFAs’ knowledge every year, the CII notes.

In a statement today the regulator says: “We believe that advisers having a good level of knowledge is the foundation to giving sound financial advice. This is particularly the case with the more technical aspects of financial advice.

“The objective of the re-evaluation is to identify areas of strength and weakness in technical knowledge and its application that underpins suitable financial advice.”

The test will be 100 questions long, spread across units R01 to R05, but the priority will be on areas impacting the suitability of advice.

The CII says: “This test will provide firms with the ability to independently assess their advisers’ knowledge and development needs against the industry standard. This is part of a firms’ obligations to ensure that advisers are and remain competent.”

Earlier this year, Money Marketing revealed that the FCA had probed adviser training and competence records at a number of firms.


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There are 41 comments at the moment, we would love to hear your opinion too.

  1. CII trying to get more money through exams endorsed by the FCA when there are better ways of achieving the same laudible objective without the involvement of the CII. ISO22222 perhaps?

  2. Cue a host of comments moaning that this is just another way of the CII / PFS spinning money out of yet another exam.

    As far as I can tell this isn’t compulsory, you don’t have to pay for it or take it but it is another option for proving your ongoing competence to do the job. If you already test yourself of your advisers in another way fine but why anyone wouldn’t be happy to annually prove their knowledge is up to scratch is beyond me.

    • So why do people do CPD? And no mention of CISI.

      I’m afraid this does rather look like another CII revenue raising exercise. In truth I have always regarded them as a rather money grubbing operation, more concerned with their bottom line that the welfare of their members. That’s why I refused to have anything to do with them over the years having used the LIA, IFP and CISI etc for educational requirements.

  3. Tesco each morning; How do we give our customers more today?

    CII each morning; How do we squeeze more money out of the adviser community today?

    FCA each morning; ________________________ (over to you)

  4. More money making at our expense. Do solicitors, accountants, doctors, dentists resit exams each year? no they carry out CPD.
    A simple solution is that all advisers have to be either advanced (degree level) or chartered to practice and have done with it. More tinkering at the edges. BTW I am only level 4, so easier for me if they just leave it other wise more exams 🙂

  5. I wonder if the CII would let you do this exam instead of the compulsory CPD. I for one would much prefer to have one exam a year and be done with it!

  6. Darren – it is about the FCA getting involved when there are better ways which achieve other objectives too. The FCA should focus on these and let firms decide if this exam is appropriate – it is the thin end of a wedge, a piecemeal, knee jerk answer which lacks any joined up thinking.

  7. Won’t make me popular but perhaps now is time to say everyone should be level 6 with a generous timescale (2025?)

    • Richard Clinton Green 5th September 2018 at 4:24 pm

      It would make the CII an incredible amount of money if that happened and even then they would not provide text books which covered the whole syllabus. Even universities do not expect you pass a degree without giving the whole syllabus!!

    • You’re right. It won’t be popular.

      Although I don’t expect to be around in 2025 (you can take that any way you want) I would leave the business if I was asked to do that. If anything like this comes is, during the next 4 years, I will leave. I had my CPD checked by the IFS, last December, and, between the level 4, exams, RDR and the sunset clause I lost thousands in revenue, as a sole trader (one man band). I think a lot more advisers close to retirement would also go.
      How many time to we have to say that exams don’t make advisers act ethically, which is of more importance.

  8. I have just put my “bring it on” badge on.

    I conduct about 30 hours per month on face to face client meetings, about 100 hours on office work for clients per mth, and around 40/60 hours on compliance and regulatory crap (yes the vast majority of regulatory stuff is crap)

    So tacking on (say) 10 hours a year for an exam is no big issue ……or is it just the principle? As for the cost …well everything is billed to the clients …so again no big issue ….or is it just the principle

    Do I not do enough CPD in my daily work load and research to cover this “bolt on” ?

    You may guess I am more principle based than ……say prescriptive ?

    It’s all a con ! Thought up my chinless wonders in a boardroom who couldn’t stand up straight if their life depended on it …..

  9. Makes sense to me. I thought this would come in sooner or later. I would hope and expect however that it should be VERY reasonably priced at less than for any other individual R0 exam.
    It doesn’t state the price yet on the CII web page
    I don’t think a move to level6 being made mandatory makes sense when there is already a shortage of elvel 4 advsiers and it takes 18months-2yrs to get to level4 if they are working at the sametime

  10. £110 for members. If it was half the price I would say fine. £110…… for something many of us already do in a similar way….. maybe not until it’s compulsory

  11. Wizard learning have already been doing this for ages……

  12. This is a risk of regulation by the back door. FCA must consult on changes so by encouraging (it seems) a regular exam they can move round that. Is it not much better for firms to ensure their staff are competent based on the needs of their target market and business lines they operate in.

  13. What happens if you have a niche specialty and fail the overall test? Would you be prevented from advising on, say, pensions if you duff the Protection side?

  14. Will FCA staff and FOS staff have to sit these as an example to all of us?

  15. The introduction of this exam demonstrates the typical retrograde two dimensional thinking underpinning the current advice paradigm. In an increasingly complex market, it is impossible to master all the information available, and one must therefore specialise to offer the highest level of advice in any particular subject. Much as a solicitors practice will have different partners for family, civil and corporate law etc. logically it follows advice firms should do the same. A family lawyer would not be competent to defend at a criminal trial and would not be expected to be either. Similarly, a pensions specialist has no need of detailed knowledge on mortgages or home equity release. The new test is therefore redundant.

    • Your references to specialisation are wasted on the FCA as they still think you have to be a GP to be ‘independent’. Apologies for mixing professions – I hope you’ll get the gist…

  16. There are quite a lot of different level 4 equivalent ongoing CPD testing systems – although the style of question is often very different to the CII and hard to gauge level of care that has gone into them as they aren’t set or offered by accredited exam institutions. Sitting this new exam each year is a bit extreme and expensive but every few years might be worthwhile. It’s probably more useful for those who have had a career break or stepped out of advice into a different role for a while or for those whose T&C supervisors have voiced concerns their technical knowledge is weak or not up to date.

    • That sounds sensible. Compare with licensing for divers (yes, divers) – CPD through doing the role, or a mandatory reassessment if you’ve been out of action for a while.

      • Adam

        I too am a diver. The big difference here is that the assessment is for your OWN safety. You could kill yourself.

        This initiative is supposed to be for the well being of clients not the adviser and I don’t think many have been killed for lack of re-testing.

        What if you are level 6? (As I am) In this case no further testing – just CPD. The logic is flawed. If an annual exam is necessary for level 4 to ensure they are up to snuff, then surely the same should apply (in all logic) to level 6. (And beyond).

  17. What makes anyone think that all Chartered (Degree level) advisers have more ‘relevant knowledge, are more ‘honest’ and more ‘savvy’ than Diploma (A level equivalent) advisers.

    Is it true that all University Graduates have more ‘relevant’ knowledge, are more ‘hardworking’ and are more ‘savvy’ than ex A level students?.
    Why doesn’t the FCA, with the 6 monthly and annual Gabriel returns ask for a list of Clients and then SR’s for say 6 random names if they are not sure about our ‘professionalism’.

  18. Oh my God I must have, for the past 30 years, misunderstood the point of CPD.
    I was under the impression CPD is targeted learning, a means of keeping up to date on areas in which you need refreshing.
    This exam is certainly not targeted and achieves nothing.
    As the CII have have repeated many times to me in the past (and this is recorded) “we do not test you on what you know, we test you on the study text.
    The CII’s real agenda here is to abolish CPD and replace it with compulsary annual exams. This will ensure the CII will have a continuous income stream for ever and a day. Is this really what the the regulator wants to endorse, if it is we need to seriously review the future for this profession.

  19. This is not an issue about money.

    It undermines the credibility of the FCA who appear to have no faith in their current requirements in terms of attaining and then proving ongoing competency.

    Ironically if this was a new compulsory exam then I would accept the matter. If the regulator feels that the present rules are insufficient then change them.

  20. Well FCA are doing something, and CII get more exam fees, so everything is fine.

    Not sure how many customers needs are not met by Level 4.

    IMO, the real advice issue is the millions of customers who can not afford advice

    Not everyone is HNW.

  21. With Wizard Learning there is a way of proving your R01 to R05 knowledge by assessment online without having to take an exam. You can take assessments for each of R01 to R05 (plus a lot more material such as monthly CPD and compliance courses) that are exam style assessments then you also have the online courses for each of the R01 to R05 to study the gap areas that you don’t do so well on, then take further assessment after further studies. Plus all your studying also counts for CPD as well. For more details see you can also take a free 7 day trial first to see if it meets your requirements.

    Some testimonials at

  22. The motive behind these new ideas is always making money for the CII. Why should I have to pay them again when I have paid and passed these exams previously?

    If the CII are genuinely concerned about advisers knowledge meeting the needs of the consumer why don’t they offer this new exam as a free online assessment?

    • £110 is too much, free is too little. This should be at a cost of somewhere between £30 and £60, no more no less and as it is not mandatory (yet) it should be sat remotely rather than at exam centres which in my case requires 4 hours of travelling time to be wasted.

  23. No. This is a disgrace. No other professional service requires re-licencing based on an arbitrary test set by a bunch of bureaucrats. We all engage in lots of CPD all the time. In any event mature businesses are likely to practice the division of labour (we do) and have specialists. So do I bring along my pensions specialist, my tax specialist to these stupid tests?
    And to put this the other way about how about a series of tests for the continuing competence of the FCA bureaucrats? Those that I have met are clueless about economics and financial services in general. This whole is ludicrous.

  24. Another means of getting a bit more money.

    Could, should, be offered free as part of PFS SPS/CPD offering.

    Drop a line to PFS CEO and CII CEO

    Complaints forced them to rethink Advanced Diploma bundling so worth a try.

  25. I am British but I studied at a University outside of the UK. I ended up completing a post grad financial planning law. So I am a CFP. I wanted to come back to the UK but I would need to do a Diploma to have my Varsity qualifications recognised. I understand why as all legal acts in Tax Pension etc are different but to bring in another exam to test financial planners in the UK makes no sense to me. Do they not trust the CPD points earned. Rather put make sure that the points earned are verifiable.

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