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Halo hello

Sam Shaw examines the new chartered financial planner status

Is the award of chartered financial planner status a long-awaited milestone for the industry or a wasted opportunity?

Chartered Insurance Institute deputy director general Bob Bullivant believes chartered status is the kitemark that financial services has been lacking. “We have got something now that will transform the industry into a profession,” he says.

Rather than seeing the move as dividing advisers into two camps – the chartered haves and the non-chartered have-nots – Bullivant foresees the title as improving perception of the industry as a whole.

He says: “Those advisers who do not hold the title will benefit from the halo effect of being part of an industry that holds a professional qualification.”

But Institute of Financial Planning chief executive Nick Cann says: “It is worrying that credit might be given for chartered status by association. I think that advisers who hang on to people’s coat-tails are very unwise. That could start to get quite dangerous.”

Aifa deputy director general Fay Goddard has been an advocate of chartered status for some time, recently saying that to witness its entry would mark her career ambition.

She says: “This is the final seal of approval that we have a profession and it is now time to promote that. We can now give confidence to the public that there are financial planners and advisers out there.”

But some IFAs are split between those seeing it as a positive move and wondering if it is beyond their reach.

Clifton Associates of Bristol IFA John Gabler says: “I think in the long term it will be the way to go. Many people in the industry have been trying to achieve this for some time.”

He predicts the charter will encourage even more improvements in cleaning up the industry. “I think we will see a division into two camps – those wanting to present a professional image conduct their businesses accordingly and those that are just out to make a quick buck. I think the latter are gradually going by the wayside, and are being weeded out,” he says.

Goddard believes the point of difference of chartered financial planner is that it is a consumer-recognised qualification. She says: “I think that all the qualifications are great within the industry but this will mean some- thing to the public.”

Concerns have been raised over the level of confusion between the existing certified financial planner qualification offered by the IFP and the new chartered status, with the acronyms being the same.

Clancy’s Financial Planning financial planner Jim Clancy says: “I think it is great news but the problem is that now you have a certified financial planner and a chartered financial planner, both CFP, and there is a risk of confusion.”

However, Goddard says: “Perhaps there is the opportunity for confusion but it is not mistaking a low-ranking qualification for a high one. They are both very respected awards.”

The IFP recognises the importance of the chartered title and is looking forward to working with the CII and the Personal Finance Society on its development but Cann believes the numbers expected to take up the qualification – 500 in the first tranche, with a further 500 expected within the first year – makes the new club too exclusive.

He says: ” I think the bar has been set a bit too high, and will be off the radar of most IFAs. Qualifications within the industry have been gaining great momentum, but I think we will see very few actually coming through. This could well be a bridge too far for some people.”

The CII is seeing the charter not only as a prize for those advisers in today’s climate but also as the carrot to attract new entrants into the industry.

CII president Peter Hales says: “The industry has not done enough to attract quality people into financial services. This is not just a qualification but is about professional integrity and standards.”

Park Row director Peter Sprung says chartered status will encourage graduates into the industry but believes that until adequate numbers reach the standard, it will not make much difference.

He says: “Although IFAs are keen to learn, this might be one step too far. However, anything encouraging achievement and improved standards can only be a good thing. My only fear is that this is too far ahead in the future.”

Gabler agrees the title will serve as an incentive for the advisers of the future rather than seeing large numbers of current IFAs chasing the award.

He says: “It can be daunting for the older members of the industry who have been in the industry for some time, thinking they have to start taking on more qualifica-tions. The thought of going on to do further exams fills me with dread but it is a good sign for younger people entering the industry.”

The main criticism of the chartered financial planner status is that the exams are based in theory whereas the IFP sets out its stall as application-focused.

Clancy says: “The charter is all about the exams, and the knowledge is just theory. The certified financial planner is about putting it into practice as well so it proves a far more holistic solution.”


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