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FSA names six accredited bodies

The FSA has published the names of the six professional bodies it is likely to grant accredited body status.

In its quarterly consultation paper published today the FSA names the six bodies it intends to grant accredited body status as the CFA Society of the UK, the Chartered Institute for Securities and Investment, the Chartered Institute for Bankers in Scotland, the Chartered Insurance Institute, the Institute of Financial Planning, and the Institute of Financial Services, which is a division of the ifs School of Finance.

The six bodies are subject to consultation.

Accredited bodies will be responsible for issuing advisers with their Statement of Professional Standing, which will certify that advisers have reached the minimum qualification requirements under the RDR.

The organisations awarded accredited body status need to have satisfied the FSA that they act in the public interest and in the further development of the profession, and that they carry out effective verification services.

Accredited bodies will also need to have appropriate systems and controls and co-operate with the regulator on an ongoing basis.

The FSA says: “The criteria is based on what we expect all accredited bodies to demonstrate from December 31, 2012 so the proposed accredited bodies may not have all the appropriate capabilities or systems and controls in place now. As the accredited body role is new, it is very unlikely that any accredited body is 100 per cent ready now.

“We are satisfied that the applicants and their independent auditors have provided sufficient detail about how they expect to implement the appropriate systems and controls between now and December 31, 2012.”

The regulator adds it expects to receive further applications from potential accredited bodies and will consult on any decision to accredit those bodies.

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Comments

There are 43 comments at the moment, we would love to hear your opinion too.

  1. “The Gravy Train is departing from Platform 2”

  2. David Quarrell 6th June 2011 at 12:10 pm

    I thought it went by boat ?

  3. But they do not have a financial interest in RDR or a conflict of Interest, when, they say that over 90% of their members agree with RDR!
    Also not sure when the CISI became CInsuranceISI

  4. Another old boy’s club to pay for, for those of you who are left.

  5. Here we go again. Fimbra, lautro, pia, fsa. Same crap, same people different name.

  6. Green Eyed Monster 6th June 2011 at 12:19 pm

    The Gravy Train won’t apply to the IFP which is including the service without additonal charge to its membership. Also the membership fees won’t be increasing in the forseeable future.

  7. More costs to pay for and those idiots at Canar Wharf are telling consumers that costs to consumers will not increase due to RDR. These so called interlectuals are living in cuckoo land

  8. …… The Gravy Train won’t apply to the IFP which is including the service without additonal charge to its membership ……..

    I feel oh so much better for that!!

  9. Green Eyed Monster – No additional charge to its membership and no increase in fees for the foreseeable future, but there will be no choice but to become a member of one of these accredited bodies in the future.

  10. PFS or CII members will receive their Statement of Professional Standing (SPS) free as part of their membership.

    David Ross
    CII

  11. Robin Seymour 6th June 2011 at 1:37 pm

    The debate in respect of gravy trains is pointless and serves no useful purpose. It is good that we know the 6 and lets get the next part of the process done.

  12. To David Ross, how can it be “free” if you have to pay a sub to be a member? We’ve paid gazillions to you in exam fees etc already, we have to pay subs to use the qualifications on our stationery etc, this is hardly “free”!

  13. Robin Seymour

    At least the FSA has got one person to roll over!

  14. Anonymous,

    “PFS or CII members will receive their Statement of Professional Standing (SPS) free as part of their membership.”

    Given the concerns of some posters I felt it was reasonable to point out that the introduction of SPS’s by the FSA was not going to see PFS or CII Members facing additional charges.

    With regards to your comment: “We’ve paid gazillions to you in exam fees etc already, we have to pay subs to use the qualifications on our stationery etc, this is hardly “free”.

    The RDR has seen CII revenues increase by around 4%. As we’re not for profit any surplus is reinvested back into the operation for the benefit of members. It’s this that has allowed us to create a new suite of predominately online RDR-compliant exams, a free gap fill tool and a plethora of free gap fill CPD to support advisers. We have also developed an alternative assessment for experienced advisers that allow them to study for QCF level without sitting examinations. No other professional body can claim to offer so much to its members. You can view our annual review on our website. This provides details of our finances and provides an overview of how our revenue is spent.

    If you claim to be a member of the PFS or CII on your stationary then not unreasonably you have to be a member of the PFS or CII. Being a member shows that you have committed to adhere to the bodies code of ethics and to actively engage in continuous professional development. If you have a professional qualification then your designation would reflect this e.g. DipPFS. Our approach is commonplace amongst other professions and the professional bodies that operate within them. If you were to compare our membership fees with other bodies operating within financial services you’ll see there is little variance. If you extended this to the wider ‘profession’s you’ll see that members pay significantly less than lawyers, doctors or accountants.

    David Ross
    CII

  15. Steven Farrall (Adviser Alliance) 6th June 2011 at 3:06 pm

    It’s more evidence of ‘nationalisation by regulation’, which, let’s not forget, is the sole purpose of the FSMA 2000.

    There is no evidence at all that official licensing of trades and professions improves outcomes for consumers, whereas there is stacks of evidence that simple free market competition does just that.

    Furthermore, as Mr Haeth points out this regulatory capture of the various accedited bodies gives their personnel a little filip. I makes them party to the bureaucratic game and as so is it lilely that they will feel like challenging the rules, even if they are demonstrably not in the public interest as they restrict competition?

  16. What do accredited bodies do for my clients? I suspect little or nothing.

    After nearly 40 years in financial services I see the following:
    Then some “brokers” sold whole life non-profit as it maximised commission. I remember seeing editorial in a Saturday edition of Daily Telegraph extolling the virtues of this product. There was a half page ad from the provider elsewhere in the paper.
    Then Daily Mail decided it didn’t like mortgage brokers makintg commission on endowment policies and launched a campain against them. All the policies I recommended returned a healthy profit, or paid out on death.
    Then you could buy whole life with profits, in the right case an excellent way of providing cheaply for what is now IHT. That product isn’t now available.
    Now we have commissions up considerably on what they were 40 years ago to pay for regulation. The customer pays for that. We have almost no insurer capable of anything like the service standards of a good mutual life office then. Now we have a worsening gap in adequate life and other covers and under-provision of pensions, mainly on account of lack of public confidence in our once proud industry.
    We seem to have rid ourselves of a few unscrupulous salesmen and replaced them with an inept regulator.

    Perhaps even nostalgia ain’t what it used to be?

  17. @ David Ross – I accept the fact that members do not have to pay extra for their SPS, but your point “Being a member shows that you have committed to adhere to the bodies code of ethics” ignores the fact that by being an approved person, you have accepetd your are subject to the FSAs rules to BE an approved person. As such, to obtain an SPS, the FSA do not require someone to be a member of a professional body, so to make it a requirement to be a member to obtain an SPS is unethical.
    This is NOT aimed solely at the CII, it is aimed at all bodies who refuse to accept CPD, qualifications and confirmation of committment to the FSA’s code for approved persons as sufficient in order to continue to practice the job we have done for decades.
    I have previousl been a WILLING member of the LIA, SOFA, PFS, CIOB, but the point is WILLING and freedom of choice, not mandatory through the back door.
    Charge me double if you like for the extra cost involved in signing off my SPS, but requiring me to submit to enforced membership or submission to a code contrary to my own beliefs and standards in order to trade is morally indefensible.
    It needs to be remembered that Fred Goodwin, if he were an IFA and not an accountant and had signed the CIIs code for instance, could NEVER work again, becuase he was shagging some bit at work which might have brought the CII in to disrepute and my use of this language coudl ALSO be deemed to be bringing the CII in to disrepute were I a member and result in my being unable to get an SPS and hence unable to ever work again in the industry.
    Mandatory membership is the thing of dictators and is why the current Pope can put full member of the “Hitler Youth” on his CV.
    If you haven’t referred my comments to your Ethics committe yet David, then you really should. It is quite ironic, that as a non member, whilst i can get all my payable exam info on the CII website and a copy of the code of conduct, I cannot donwloand the CIIs ethics paper without first becoming a member.

  18. @David Ross | 6 Jun 2011 12:42 pm "FREE SERVICE" 6th June 2011 at 3:33 pm

    @David Ross | 6 Jun 2011 12:42 pm

    PFS or CII members will receive their Statement of Professional Standing (SPS) free

    Perhaps you apply post RDR charging standards to that statement David and list the PFS fees so we can see how much this free service costs?

  19. Membership fees will not increase as a result of SPS’s being issued to members. For the record a qualified PFS member currently pays £170 a year.

    David Ross
    CII

  20. PFS membership fees are outlined here:

    http://www.thepfs.org/pages/about/join/subscriptions.aspx

    David Ross
    CII

  21. All I see are fees, costs, bureaucracy. IFA’s now spend more time kowtowing to the rule makers than actually dealing with clients. Its all too depressing for words. And frankly, I’ve had enough

  22. PFS fees £170, IFS £60 – I think more IFA’s should be walking with their wallets.

  23. My comments appear to have been moderated and whilst I accept they were close to the knuckle, they were for a purpose, so perhaps the moderator would be kind enough to email me detailing which bits they would like amended and I will then do so, whilst trying to keep the same aim.

  24. Richard Brydon 6th June 2011 at 7:04 pm

    Re CII Exams etc.

    I passed RO1 today, having had a narrow fail earlier this year.
    I don’t object to raising the standards of advisers but this exam has taught me nothing of any merit. If these exams were relevant and they would eventually achieve the apparent objectives stated, that would be fine, but they don’t. I even chuckled when I had to choose a wording that described the FSA. Open and Fair? You must be joking. But I had to tick the box anyway, and it hurt.

  25. @David Ross | 6 Jun 2011 3:51 pm 6th June 2011 at 7:44 pm

    So this “free” service costs currently £170 a year for “qualified” members. Tell me David do those PFS members who fail to get qualified i.e. culled for failing level 4, do they get a refund especially after PFS/CII supported the FSA anti grandfathering stance!

    Personally, because of your group’s shameful misrepresentation I’d rather pay £170 pa to charity

  26. Richard Brydon,

    Congratulations on passing R01.

    I appreciate the point you are making and rest assured you aren’t the first person to make this observation. I would however point out that the learning outcomes that you are being tested upon where defined by the FSA. The CII, in common with all the other exam providers are testing you on those things demanded of you by the regulator. Irrespective of what exam you took and with whom you wilb expected to know (and apply) the same knowledge. The RO1 exam unit was simply created to meet the FSA’s specification. If we didn’t follow their instructions it wouldn’t be an RDR compliant qualification.

    It’s also worth noting that the new QCF level 4 standards laid down by the FSA are the new minimum benchmark for new entrants. R01 is part of an entry level qualification.

    Not sure this will make you feel any better but hopefully it does explain why the exam tests what it does.

    David Ross
    CII

  27. Anonymous,

    Student members pay £70. Members who have a certificate, diploma or advanced diploma pay £170.

    The PFS is not some esoteric star chamber. It is a body made up of 29,000 individuals from across the financial advice sector. These members have repeatedly given their support to raising standards of professionalism and have chosen not to support grandfathering. The PFS Board who set the strategy and oversee the running of the PFS is made up primarily of financial advisers. Your peers ARE the PFS and your peers are running the PFS.

    It’s important to understand that the PFS is not a trade body. We aren’t an alternative to AIFA we are a professional body operating under a royal charter. I appreciate the strength of feeling felt by advisers about grandfathering but PFS members have been clear in their support for the RDR. For the record AIFA didn’t support grandfathering either.

    David Ross
    CII

  28. I agree with David Ross | 7 Jun 2011 9:37 am
    posting. It is NOT the CII’s fault that the subject matter being tested in R01 is pretty pointless, especially as much of it will change post FCA.
    As a method of testing the syllabus that has been layed down by QCF/FSA, (so far) I have found the R0 method fair and reasonably convenient, having sat and passed R04 and R02 to date, with R03 next Monday and R01 in a few weeks time. The subject matter in R01 is probably the most boring I have ever read adn I have to keep finding something more interesting to do, like posting on here to give myself a break, but that is not the fault of the CII or the writer of the manual.
    As to the PFS not being a trade body, it is important to remember that AIFA is only a trade body for IFAs (at the moment) and as I seem to remember, the LIA WAS a trade body for both IFAs and FAs and that was why I thought that the CII and PFS were seperate entities. Am I wrong?
    If the PFS is not a trade body, then is there a trade body at all looking after the interests of tied advisers still or have they been cast adrift from any representation?
    It’s a pity Moneymarketing censored my other post rather than emailing it back to me and asking me to make changes as whilst it was quite close the the knuckle, it was actually aimed at making a valid point about the shortcomings and moral problems with making membership of an accrediting body mandatory through the back door.

  29. Phil,

    The PFS is part of the CII Group in the same way that the Society of Mortgage Professionals is. The CII is the awarding body so it’s the CII that is regulated by OfQual as the exam provider. It’s also the CII that has been given the authority by the Provy Council to award Chartered titles. The CII is a professional body and has been for over 100 years. It’s purpose is enshrined within a Royal Charter laid down in 1912. As we are first and foremost a professional body our submision to the FSA for Accredited Body (AB) status has been made as a professional body i.e. we will offer SPS’s to our members. This approach meets the FSA’s requirements for AB’s.

    David Ross
    CII

  30. @ David –
    Yes know all that. I was a member of the CIOB being an ex banker, BEFORE joining the LIA as my job role changed and then the PFS and SOFA at the sametime.
    No mention of LIA or PFS in your response.
    The CII’s approach is “super equivalent”
    The below statement is directly lifted from the FSAs fact sheet.
    If an accredited body wants to set a standard for their members and subscribers
    our requirements, the FSA imposes no restriction on them doing so.
    THAT DOES NOT MEAN YOU HAVE TO FORCE PEOPLE TO BECOME MEMBERS IN ORDER TO ISSUE AN SPS. It says A CODE OF ETHICS not YOUR Code of ethics. The code must be at a minimum of that required of an approved person.

    David and others, I understand you may view this as a piddling little matter, but bearing in mind we are all being forced to sit an exam with “ethics” in the title, I woudl have thought it might be appropriate for some kind of consideration of the ethics of enforced membership?

    5 volunteers are worth 10 pressed men.

    1. act in the public interest and further the development of the profession;
    2. carry out effective verification services;
    3. have appropriate systems and controls in place and provide evidence to us of continuing effectiveness; and
    4. cooperate with us on an ongoing basis.csheet for small firms

    Accredited bodies will:
    • ensure that all of the advisers who use their services are subscribing to a code of ethics that is consistent with the Statements of Principle for Approved Persons;
    • check that all of the advisers who use their services hold an appropriate qualification, including verifying 100% of their gap-fill where required;
    • carry out a random 10% CPD sample check (the body can exceed this requirement if they choose); and
    • recognise CPD activity from a range of providers, including firms’ own in-house schemes.

    http://www.fsa.gov.uk/pubs/the_role_of_accredited_bodies.pdf

  31. The most important line from the FSA factsheet.

    “An adviser does not have to be a member of an accredited body to receive their SPS.”

    These may have to be reprinted as this is factually incorrect at present as I don’t think there is one SPS who have said they will issue them (perhaps at an inflated price for the theoretical extra work) to non members.

    The CII charge extra for exams for non members, what is the logic in not doing the same with teh SPS? Is there ANY logic.

  32. Phil,

    As I understand it the LIA and SOFA came together to create the PFS.

    On the matter of codes of ethics…I respect your willingness to stand up for what you believe in and hopefully my willingness to engage in debate shows that I don’t view this as a piddling little matter.

    The AB’s that have been announced have all appear to meet the requirements of the FSA. You may feel the FSA is coercing you into becoming a member of a professional body but the CII is not compelling you to do anything of the sort.

    We are a professional body with close to 100,000 members. We have no wish to create an additional operation outside the professional body that acts solely as a verification service for advisers seeking an SPS. There is no requirement by the FSA for us to do so.

    I respect your opinion on this matter and appreciate the strength of feeling that it illicits within you but I sense we must agree to disagree on how the CII (and others) operate as professional bodies.

    David Ross
    CII

  33. @ David – sorry, it was unfair of me to imply you felt it was a “piffling affair”, I do appreciate your willingess to enage on the issue.
    Interestingley enough, I have just had a call from a journalist to a competitor to MM who reliably informs me that one of the 6 accredited bodies does not require memebrship in order for an SPS. If you follow my (I know it is a bit convuluted) logic, then the fact one allows an SPS without mandatory membership let’s the FSA off the hook and adds moral authority/weight to the argument that any FAs who then choose to sign up with the CII or IFP do so fully agreeing to the code of ethics and rules of the body of which they apply to be a member and it has not been by way of any form of coercion.
    I would therefore suggest all re-read what they are signing to agree to do and the committments they make and will be measured on.
    The fact someone offers an SPS without mandatory membership means I am now free to choose (which is VERY important and should be a mark of Independance) to commit to the CIIs or IFPs code OR not.
    My principles may have just cost me an extra arm and a leg in non member exam manuals and fees, but sometimes that is the price of ethics.

  34. Phil,

    As I read it the FSA appear to be saying:

    1. You don’t have to become a member of a professional body to get an SPS.

    2. You do have to sign up to a code of ethics to get an SPS.

    The two aren’t necessarily linked. You can avoid joining a professional body but you can’t avoid signing up to a code of ethics. The FSA demand that ALL of the Acrediting Bodies have suitable code of ethics.

    They state:

    Accredited bodies will:
    • ensure that all of the advisers who use their services are subscribing to a code of ethics that is consistent with the Statements of Principle for Approved Persons;
    • check that all of the advisers who use their services hold an appropriate qualification, including verifying 100% of their gap-fill where required;
    • carry out a random 10% CPD sample check (the body can exceed this requirement if they choose); and
    • recognise CPD activity from a range of providers, including firms’ own in-house schemes.

    I read this as ALL Acreditting Bodies will demand that advisers subscribe to a code of ethics. I guess there could be some differences between each AB’s code but given the choice advisers can compare them as part of their deliberations over which AB to approach for their SPS.

    David Ross
    CII

  35. why did the PFS CII IFS etc not support grandfathering? MONEY MONEY MONEY

  36. @ David – It’s very simple A code of ethics can BE “The Statements of Principle for Approved Persons”, it does not have to be anthing more, but it CANNOT be anything less. That is why I contest there needs to be a minimum of 1 accredited body who will sign an SPS where this is what the adviser has committed to. Anything more and the system will have NO credability as it would be like making membership of a political party mandatory in order to vote and that you coudl not vote for an Independant.

  37. Anonymous,

    I can’t speak for the IFS but as far as the CII (PFS) is concerned our members – your peers – did not support grandfathering. Given this, and the fact we’re a professional body, I am not sure what you would have expected us to do?

    The trade body that represents IFA’s is AIFA. I gather they don’t support grandfathering either.

    Most importantly, the FSA also didn’t favour grandfathering.

    I think it’s unfair to single out the professional bodies for criticism over gandfathering. Of all the research undertaken by all the various stakeholders over the duration of the RDR I can recall none that states the majority of advisers are against raising standards of professionalism. Given this I see no reason why the members of the CII, PFS or IFS should be singled out for criticism.

    David Ross
    CII

  38. Phil,

    I hear what you’re saying but it’s the FSA that need to endorse your interpretation of their rules not me. I view it differently but it’s best that THEY clarify what they mean.

    David Ross
    CII

  39. David, I am a member of CII and I Do support grandfathering so how did CII represent me?

  40. @ David I accept you do not have to offer accreditation to non members and quoeting the FSA Facsheet that “If an accredited body wants to set a standard for their members and subscribers over and above our requirements, the FSA imposes no restriction on them doing so.”
    But it also says “An adviser does not have to be a member of an accredited body to receive their SPS.”

    You are therefore doing nothing wrong, but the FSA will be liars, if there is not one accredited body who does not require membership as a statement of fact “An adviser does not have to be a member of an accredited body to receive their SPS.” is a lie if ALL of them require it.

    It only needs one to be willing to do it and then the system will have credability. And should I choose to one again join the CII, agreeing to a code of ethics will have meaning.

    Without it, it is like saying you can vote for whoever you like, whilst the system requires you to be a party member in order to cast your vote.

    So I am not saying, Bad CII, change your rules, I am saying the FSA need to ensure freedom of choice and the CIIs ethics commitee might be well to mull on this issue too, as under what circumstances will you refuse to sign an SPS if the adviser has met all the FSAs requirements, but simply has been critical of the CII and you don’t want them in your club? That means they will no longer be able to trade, due to a closed shop of got to be in a union/profesional body.

  41. Anonymous,

    I am not naive enough to think that everyone was against grandfathering but all the evidence suggests you were in the minority – sorry.

    David Ross
    CII

  42. Therefore you admit membership of CII is a waste of space for those with a minority view.
    What evidence do you have and are you willing to publish it? is the evidence 100/1 against grandfathering or is the figure in favour much higher?

  43. @David Ross | 7 Jun 2011 9:59 am 12th June 2011 at 1:00 pm

    The PSF/CII exam fee machine has some work to do to improve its image. You say the PFS is a body made up of 29,000 individuals from across the financial advice sector.

    And how many of those 29,000 are obliged to join you via their block Network, tied or bank membership, or because that want the exam discount or because the use the exam title that you oblige them to pay for year after year by membership?

    Cuts no ice with me – I’d go to hell in a handcart rather that support your shameful organisation and these view are shared by virtually every IFA I know and certainly a majority of this post!

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