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.