This is an opportunity that must be grasped so we can all take part in designing an industry that will operate in the best interests of customers and our own businesses.
We cannot afford for the public to have a poor opinion of us. However, research shows people really do not trust the financial services industry. They think we are only in it for the money and care less about their interests.
Addressing the causes of mistrust is fundamental for effective market reform.
The issue has a number of facets, such as the thorny consideration of remuneration but the more straightforward challenge is the need to improve professional qualifications.
Our research shows that 35 per cent of consumers think advisers should be educated to degree level and 32 per cent say chartered status – only 7 per cent think it sufficient to maintain the A-level equivalent minimum standard (certificate in financial planning).
Experience is extremely important but it must be complemented by ongoing education and a credible standard of qualification.
In our response to the RDR discussion paper, Norwich Union suggested that a minimum qualification equivalent to diploma level would be more appropriate.
We also believe advisers should be members of a recognised professional body and should be required to adopt customer-agreed remuneration to avoid conflicts of interest.
There are still those who would contend that certificate level is fine. This is especially worrying since the Government has recently announced that companies such as McDonald’s will be able to award their staff A-level equivalent qualifications. The prospect of advisers continuing to operate at this same benchmark puts a different perspective on Aifa director general Chris Cummings’ comment about McDonaldisation of advice.
Of course, it is easy to articulate such views but what are we doing to help advis-ers? For some, the amount of study required, about 100 hours per diploma module, is difficult to deal with while running a full-time business and having a family life or it is difficult to start studying again.
We have launched our Financial Adviser Academy to make it easier for advisers to attain the CII diploma in financial planning.
The scale of the challenge is the volume of advisers still practising at certificate level – only 20 per cent of advisers have been awarded the diploma or higher.
We hope that other organisations will join us in offering advisers support to achieve higher standards and create a financial advice profession the public will trust.
Steve Gay is director of distribution development for Norwich Union