View more on these topics

Labour Party calls for rethink on RDR grandfathering

The Labour Party has urged the FSA to offer some kind of grandfathering to experienced advisers concerned about reaching the QCF level 4 requirements by the end of 2012.

Speaking at last night’s Parliamentary debate on the RDR, Shadow Treasury minister Christopher Leslie said he understands and agrees with the move to QCF level four for new entrants but suggested experienced advisers should be offered a form of grandfathering.

The speech was a significant change of tack from the Labour party who have previously not expressed many concerns about the RDR.

Leslie said: “The crux of the matter must be the issue of qualifications the A-level equivalent threshold for financial advice. Although I understand the move to a QCF level 4 standard, which seems entirely fair, it is sensible that there should be a mechanism to allow some sort of conversion of existing qualifications or existing experience to that new level 4 qualification. I cannot believe it is beyond the wit of the FSA, ministers and others to find some way of doing that.”

Leslie told around 80 MPs, the vast majority of whom were concerned about the RDR, that he agreed with the FSA’s move to greater transparency through the banning of commission and introduction of adviser charging. He said the Labour party wanted to take a pro-consumer approach to regulatory change and that it was “undoubtedly”  necessary to change the framework from time to time. But he warned of the effects of losing up to 20 per cent of the IFA market.

He said: “Is it really acceptable that between 10 per cent and 20 per cent of the profession could leave as a result of the retraining requirements, shrinking the availability of independent advice? The hon. member for West Worcestershire (Harriett Baldwin) rightly questioned what would happen if a minister were to stand at the dispatch box and announce the demise of a similar proportion of an industry.”

Leslie also attacked Treasury financial secretary Mark Hoban for comparing the current IFA qualification to a diploma in shift work from McDonald’s. He said: “I am still perplexed that he chose that McDonald’s diploma analogy. Perhaps he will reflect on that and recognise that some IFAs were slightly astounded by that reflection on their professional integrity. He might want to choose his words more carefully.”

Reflecting the one sided nature of the debate he said the minister “must be thanking his lucky stars” there is not a voteable motion.

He said: “Like I say it is a shame there is no motion tonight on this issue as I think it would have been useful for members to express the formal position of the House of Commons on this particular issue.”


News and expert analysis straight to your inbox

Sign up


There are 47 comments at the moment, we would love to hear your opinion too.

  1. The opportunity for the industry to improve the knowledge of all advisers and therefor the provision of advice to clients is now and it would be a backwards step to assume that just because an adviser has x years of service their knowledge is up to date.

    The industry should be embracing RDR Q4 not lobbying for it to be watered down.

    A little time and effort is all that is needed so my advice would be to get on with it.

  2. Watched the debate last night and was heartened by the support given from a number of MP’s. The debate however seemed to focus more on the Level 4 qualification and not on the impact of fee charging. Was wondering if I can use watching two hours of BBC Parliament on my CPD log?

  3. In responce to Mark Robinsons comment I would like to point out that I hold the Level 4 qualification but realise that whilst I have been in the industry for 8 years I do not believe I have the same level of experience or expertise as some of my colleagues with 20+ years experience. The vast majority of the J0 exams focuses on areas where we could never realistically be expected to advise on. With reggulation changing rapidly we would have to resit the exams every 2 -3 years. The RDR simply show that we can pass exams and has no real baring on practical advice!!

  4. It’s politics at it best (worst?) !! Labour suddenly start to question the FSA. Is this the FSA that they created, led by individuals that they appointed? Is this the FSA that sent in ‘highly qualified’ people to monitor the banks who got it so so wrong – perhaps through lack of ‘experience’? I’m all for professionalism and I am all for qualification, but I am not for ignoring experience. Those who carry so much by qualification ask themselves this question – if you were rushed to the A&E Dept with a life threatening condition would you want someone to look after you who was experienced in that condition or who was ‘qualified’. The nursing profession have made it work by accepting experience to date but requiring new entrants to be more ‘qualified’ – there has to be a way where we can do the same, but allowing our future to be defined by a quango that has no future is probably the craziest of it all. The FSA have failed in their duty at almost every level and it is a little rich for those politicians who created, appointed, and supported to now start questioning just because they are on the other side of the house.

  5. We’ve known about this for a year or more and have a couple more to go. Surely, if over 3+ years, so called ‘experienced’ advisers can’t pass a few exams in a subject that they’re embracing daily, then they don’t deserve to be authorised. I feel sorry for their clients.

  6. Anonymous @9.57: Go and Troll on another blog you idiot!

  7. Bianca Bartolomeo 30th November 2010 at 10:06 am

    Fully agree with Anonymous at 9.57. Just get on with it! If you consider yourselves experienced advisers than surely taking 6 exams over a period of 3 years, can’t be that difficult!

  8. That is because you are the same person……..

  9. Anonymous Coward agrees with another Anonymous Coward. What a shock.

  10. Anonyous@10:06 is the same person as Anonymous at 9:57 so they can be ignored.

  11. I have no issues with qualifications.
    I think consumers should have the CHOICE, fee or commission.
    Their decision, with transparent cost/benefits of both. Plain and Simple

  12. Sorry but i totally agree with anon. If you are an IFA not at level four then you only have yourselves to blame. The CII framework to go beyond level four has been around for 10 plus years. Are you really telling me that you havent had enough time over the last however many years to take on further exams than your FPC? Also strangely enough studying for exams and taking them can actually go towards your CPD!!

  13. I have come across a number of “advisers” who have been in the industry for “x” years. Frankly they should be more than capable of taking the higher level qualifications.

    If they can’t or won’t then the sooner they leave the industry the better.

  14. Mark Robinson – I couldn’t agree more. I have lost count of the number of times I have taken on a client that has been advised by an unqualified / poorly qualified but “experienced” adviser only to see that the advice is substandard, or worse, negligent and biased towards commission. The number of times I see the same from well qualified advisers is negligible. Stop kidding yourselves that experience is an acceptable substitute for knowledge. The ultimate aim surely has to be experience and knowledge – then and only then will clients get a professional and rounded service.

    To all those who think it’s unfair to be asked to sit the additional exams: how many of you have actually tried? From the comments posted on a regular basis it would seem that most detractors have not done so which suggests that they would rather complain than manage their situation. Just think how dynamic your advice would be if you allied all of that experience with a higher standard of knowledge which Trevor Johnston and his kind, feel they will never use!

    I am currently waiting for my AF5 result which will see me APFS qualified and I have done this and my diploma in under 2 years. I can safely say that every part of what I have learned (despite having 25 years experience) has had a direct relevance to the advice I am giving and the absolute result is that my client base is now better served, more appreciative and, probably most important, willing to pay a premium for my advice.

    If you want to stay in the dark ages, carry on decrying the value of qualifications. Don’t complain however when your clients end up deserting you in search of better advice.

  15. Mark Robinson you really should not tar everyone with the same brush and none is suggesting that RDR level 4 should be watered down. To Anonymous@9.57 am just remember that the qualification is based on good quality practice and experience and it is intended for lesser experienced advisers to improve their knowledge which is probably where you are. The strong do not have to prove their strength it is self-evident, or is it that you are envious of their successful client banks that have been built on trust and respect over the years and not on qualifications alone. Do not feel sorry for their clients, they are really happy with their experience that is why they do not belong to you.

  16. CII and Exams

    The JO5 exam exam that I failed was a joke. Questions were put that had no relevence to what is reality. The exams are a money making exercise and still are.
    My colleagues have just taken RO1 and received a conditional pass! What’s that all about? At my driving test I wasn’t given a conditional pass. Does the CII have to have a few fails for each exam they cobble together in order to remain in business?
    I have bags of experience but I don’t have clients with pension pots of £2m+. How many of us do?

  17. The FSA is not above the law or Parliament!

    When King Charles 1 was placed on trial for waging war on his own people in 1649, he claimed the King, was above the law and his right to rule was God given.

    The Parliament condemned him to death on 30th January 1649. No man, woman or institution is above the law!

    Last night we witnessed Parliament starting to reassert itself over the might of the FSA. This was a good day for democracy but the Leviathan is not yet dead.

  18. I am a level 4 qualified fee only adviser with 10 years experience, in my mid-30’s. I know that this is a tired debate but I have met level 6 advisers who would struggle to distinguish between the joint in their arm and their posterior.

    I intend to get to level 6, however, I have found that passing CII exams has not improved my ability to advise my clients. The knowledge gained from the J0 exams does not relate to day to day work for clients (maybe 10% at best). I have not yet sat a multi guess R0 exam but I suspect the value in the learning will be equal to J0 exams. This whole RDR experience is the death throes of the the IFA world. The outcome will be advisers like myself charging fees to HNW clients and the ordianry man in the street will have no access to independent advice. Whilst there are real positives in all of this for myself, given my age, experience, qualifications and the type of clients I deal with, I am of the opinion that this will all result in a terrible outcome for the public in terms of financial advice. The banks will be the only option for many.

  19. CII Exams

    Sorry, it should have read provisonal and not conditional. Mind you, I could still be right.

  20. I watched the debate with my wife who used to work in utilities regulation.

    She was struck by the fact that there was a consensus among all present that there were serious problems with one exception who had clearly made up his mind and was not listening.

    No prizes for guessing who she meant.

  21. The real issues in my view are the increased capital adequacy requirements and timing. The whole debate seemed to be swamped with commission and grandfathering, neither of which are defendable causes in my opinion but were obviously most heavily lobbied. The most worrying part was Hoban reading verbatim a statement which surely could only have been prepared by the FSA – just like a scene from Yes Minister with Hacker dutifully repeating a script from Sir Humphrey Appleby. I believe the phrase is that the “Minister has gone native”!

  22. Mark Robinson, would you really want someone with no experience advising your family on their financial affairs, just because the have exams, as opposed to someone who has 30 years in the business?
    If so, I think you are foolish.

  23. @anony 11:42

    Just because they have 30 yrs experience does not mean they will give the best advice.

    Say i played golf badly for 30 yrs would you take me on your tour team over someone who is qualified and tested as being capable to a good standard, though has less experience?

    Experience only counts if it is based on good / proper understanding, how many of these experienced IFA’s have prospered on suspect commission product advice?

    For the amount IFA’s take in fees and commission in this industry is it unreasonable to expect experience and qualifications?

  24. To those of you who are in the minority, out there, who still think that taking these nonsense exams are worthwhile and correct did you actually watch the debate? There is a reason why every single MP who spoke (with one unsurprising exception) was in agreement this is a bad deal for everyone; and that is because it is so obviously true.

    I’m glad I’m not stranded on a desert island with you guys if you are so happy to be singled out (and presumably single others out) and treated differently to everone else in our society. It would be like Lord of the Flies in no time.

  25. @ Mark Robinson

    1) do you really think that Q level 4 is necessary for some of the simple everyday advice given. Baby and bathwater comes to mind.

    2) Arrogance. No qualification obtained more than 10 years ago counts. I would have thought that a BA (Hons) in Business Studies might have been worth a few credits – but no nothing.
    I would have thought that an MBA might be seen as worth a bit more – but same again. worth nothing.

  26. Doing exams (again) as most of my past exams are to old to gain points, you may as well do as the required cap fill will take you just as long, However, most information in books I will never use, is not relevent to my clients or my business.

    As to Anonymous above who feels sorry for those clients advised by those that do not have exams. Don’t be, my experiance (Over 30 years) in this industry tells me you most likely have all the exams but might be the exception and able to advise clients effectively

  27. @ Mark Creed – 11.06am

    Like you – I’ve been adviser charging or charging Fees for years anyhow and have been upfront over commission/fees from first contact.

    I couldn’t agree more with your comments. Having taken & passed J02, J08 ER1 & CF8 this year I’m within spitting distance of Diploma. Just R03 & I’m there.

    Have all these exams added to the advice I give clients…absolutely not. About 3 paragraphs worth if you’re lucky!

    Does anyone think that making Bank Assurers sit exams will lessen the FSO’s workload regarding 98% complaints against the sector? Post RDR it’s business as usual just with less competition to worry about from those annoying IFAs!!

    IFAs contribute 28% of the costs of the regulator…if this carries on..with less IFAs to go around – costs will sky rocket per adviser.

    The RDR has good intentions & I don’t think it should be abandoned. We need a clear definition between independent advice/planning for clients… opposed to what’s dished out by salesman masquerading as advisers, meeting sales targets…..

    As Garnier said last night regarding the RDR…”the devil is in the detail”…………

    Capital Adequacy, spiralling Costs, Ridiculous amounts of compliance, Lack of a long stop, Raising the bar re Qualifications et al are driving decent, experienced advisers out of the industry & it’s not attracting new blood neither.

  28. I am age 60 and have been in the industry for 32 years and an IFA for 24, so I openly admit a vested interest.

    I would be happy to sit a fesh exam on investment which is the area in which I now specialise but see no point in exams on pensions for example as I haven’t done any for several years.

    I also agree with Trevor Johnston that the exams, like a driving test, have little bearing on practical advice.

    I also agree with the analogy with the nursing profession.

    I have put the following proposal to Mr Leslie and my local (Labour) Gregg McClymont has agreed to folllow up with him and the Labour Treasury team.

    My proposal is that any currently qualified and registered IFA with at least 20 years experience and a “clean” record and who has attained age 60 at 1 January 2011, should be “grandfathered” provided he retires by 31 December 2015 i.e current advisers can work to age 65 and then retire in good standing.

  29. to Trevor Johnson thank you for a very sensible contribution to the discussionon on Grandfathering.
    Yes younger people do find exams easier and it could take some 2 years to get there. But it takes all financial consultants more than 2 years to get 25 years experience. why do we not allow some common sense, let the new apprentices with their exam passes practice on the public as lond as they are monitored, but also let the “old uns” with the experience and the proven track record continue to look after the clients that they have introduced into this industry that some of us are proud to work in.

  30. Why, pray tell, does it have to be an argument about experience vs qualifications? Doesn’t all competent adviser have both?

    And shouldn’t it be about relevant experience and tested knowledge through relevant qualifications?

    I think those who truly care about their clients will pay whatever price is necessary to ensure they continue to provide a service.

  31. I wonder if Trevor Johnston lost any marks in his exams for spelling!

  32. Bianca Bartolomeo 30th November 2010 at 5:30 pm

    If you are experienced adviser, surely you have the knowledge. And if you have the knowledge than why all this fuss about 5-6 exams (over 3 years by the way!). And in terms of relevance to your bussiness, I think a bit of extra knowledge wouldn’t do any harm! You are a bunch of moaners!

  33. Of course Labour want to ease the RDR. Now they’re not in power, they won’t be accountable for a misselling scandal. They can also say that they took decisive steps like the RDR while the big bad Tories decided to soften it.

    Such a naked political manouevre – who cares who the victims are!

  34. Nick, an adviser with, say, 10 years experience will have both exams and experience.

    When examinations first reared their compulsory head the exams were agreed by the regulator which just happened to have a different name on its door.

    Maybe they got it wrong, maybe not, but the point is stark – no other industry requires existing ‘qualified’ practitioners to retake examinations just because the bar is being set at a higher level.

    All such bodies mandate CPD. This applies to solicitors, accountants, architects, surveyors, etc.

    In the rush to clamber further up the pole there is an audacious minority which seeks to diminish the status of existing ‘unqualified’ advisers and, in so doing, exalt thmselves and boost their own reputations.

    This is both vile and laughable.

  35. Maybe early retirement is the best option for those not wanting to take exams so close to retirement age, or even a support role.

    An IFA of even average performance will have earnt a significant amount over their career and applied their own sound advice to grow the retirement ‘pool’.

    Times change and so does relevant experience, for those who have specialised they may still be advising what they advised 10, 20, 30 yars ago, as we all know the financial landscape is so different to even 10 years ago.

  36. @Alan Lakey

    “In the rush to clamber further up the pole there is an audacious minority” – in your opinion, show me the actual facts to support this!

    “This is both vile and laughable” – so is the fact that clients can be treated as cash cows and given unqualified advice which even based on experience can be wrong (an average return on investment for a client could be better if only the quality of advice was improved a little, qualifications are one means to this as is experience, both are important).

    If you don’t like RDR why not go advise in a less regulated part of the world, easy to find, and make a killing selling the highest commission products to all as standard.

  37. My daughter went to university in the hope of becoming a radiographer.
    At the same time I had to attend hospital and required the expertise of a radiographer.
    I naively asked her which university she had attended. Her reply was “in my day you did not go to university to become a radiographer, you trained on the job, learning from those with more experience”
    She said that through regular assessments she had gained competency and admitted that at the age of 18 she would not have had the required entrance qualifications for university.
    She treated me with the utmost professionalism and given the choice I would rather have had that lady treat me than someone with a degree but with very little experience.

  38. And I thought it was Maggie who was an expert at U turns!!

  39. We are back to arguing over qualifications vs. experience. Best answer so far is given (unsurprisingly) by Nick Bamford.

    All these arguments simply convince me that those who are yet to attain level 4 or 6, and yet complain about having to do so, are simply lacking basic intelligence and deserve what is coming.

    It is simple. Never mind 10% of exams are to be used with everyday advice, the fact is the FPC is a joke to be used as a benchmark enabling one to use financial planning and give investment advice.

    In fact I bet most don’t even know investment principles and facts (apart from which fund did best).

    I am glad that some will leave this industry cos they simply can’t be bothered to attain a respectable standard so that this becomes a profession.

    No wonder accountants,solicitors and other professions laugh at you.

    The future after 2013 will be different. Those at level 6 and above will be viewed as true professionals and earn deserved respect and referrals from other professionals.

  40. This is an important discussion which with the MMR will have a significant imapct on just about everyones choice of financial products in the UK. You obviously lack the knowledge to disucss it openly so if you see clients going out of business due to an ignorant and biased regulator and a lack of competition from a handfull of dominating lenders, then you would be angry and probably have a more worthwhile opinion. As it is I inviite Anonymous @ 9.57 to swallow your keyboard sideways.

  41. Hector Sants – He has a degree in psychology and philosophy from Oxford University. Re-training required for current position ? – Or do as I say – not as I do.

  42. I have been reading all the comments posted on the previous pages, to be honest I am shocked !. I do not practice in your industry but have a very active interest in what is developing. I retired recently following an ongoing illness.

    I received a substantial (my opinion) payout from both insurers and pension providers, The 2 IFA’s who came to my home, ( 1 aged about 28, the other mid thirties) have given me completely different advice, How does that work ?. I visited my bank and was introduced to Client Relationship Manager, (probably in his late fifties), he asked so many questions and took so many notes. He spent nearly 2 hours with me and made an appointment to come and see me at home as the others did. They spent less than an hour with me.
    I could not beleive the service and patience this chap had, he has come up with some good ideas and has left me to to think about it.
    Exams who cares ?, this chap has EXPERIENCE, that counts for me. Well so far anyway.

  43. Alan both sets of advice could be correct as financial advice is not an exact science. It would be interesting to learn how the ‘adviser’ from the bank will be paid.

    How do you know that the ‘adviser’ from the bank was experienced. Just because he is 50 doesn’t mean that he has been in the industry for a long time.

    I note the two IFA’s gave you advice (albeit different) whilst the bank ‘adviser’ gave you some ideas suggesting it is you that needs to make the decision as he does not feel confortable committing to giving you advice on what you should do.

  44. As a matter of interest I am age 64 and this discussion is becoming somewhat tedious. What one has to look at is the following:-

    1. When FPC was brought in it was take the exam or leave the industry.
    2. As the industry developed further exams were taken depending on the area of the market you required to specialise in. No pressure just common sense. I have lost count of the number of exams I have taken)like so many in their latter years), but the main thing was that my knowledge was increasing.
    2.. Level 4 brought in, same comments, take it or leave.
    3. All those that have level 4 or 6, fantastic as obviously they deal in that area. I will use the comments made by Mr. Sants”be afraid be very afraid” because in the future the FSA will say take level 6, 8 or whatever they decide or your out. Try taking that on board when you suddenly find no matter how good a job you have done in the previous years and you have got level 4, you are out.4. It is not so much the exams it is the precedent that is being set and we are rolling over and accepting it.

  45. Why did they not put this proposal forward while they were in power!!!

  46. Sorry Jim Tuurner! Was a litlle bit passioite whem I wrote my comment and may have made a few spelling misatkes. As I said I don’t think the C1I exams are a great meens of testng. Anyhow glad to see you’ve added something constructive to the debate.

  47. Yet another Labour mistake admitted? Or have they realised that many advisers may be so p’d off with the Government that there is a possibility they might vote Labour next time?

    We are the only profession which hasn’t allowed grandfathering. This is akin to the 63 year old senior partner solicitor being

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm