View more on these topics

Level best

In the retail distribution review interim report, the FSA poses three big challenges for the industry. One of these is to develop and implement an agreed common framework for professional standards including examinations.

The FSA says it has found significant agreement that a Qualifications & Curriculum Authority level 4 exam, such as the Chartered Insurance Institute’s diploma in financial planning, should be the minimum academic qualification for those who want to be financial advisers but not salespeople. What does this mean?

With the plethora of incremental exams available to financial advisers from near to a dozen examining bodies, how do financial advisers know if they have qualifications equivalent to QCA level 4? Over 15,000 people hold the Investment Management Certificate now offered by the CFA Society of the UK which is advertised as being an FSA-approved threshold competency examination. Are these IMC holders aware that this is assessed as being a QCA level 3 exam?

One of the best consumer-facing places to look at how all the financial adviser exams stack up and how the Financial Services Skills Council categorises all the incremental exams can be found at uk/independent-financial-advice/ifa-qualifications/

IFA Promotion was being asked by consumers to explain what all the available letters after advisers’ names meant, so it commissioned the Financial Services Skills Council to assess all the IFA-facing incremental qualifications and the previous exams that still have currency (totalling over 50) and apply an A or B level against each.

All qualifications and designations were assigned a level based on an analysis which was completed by UK Naric, a national Department for Education and Skills agency which provides guidance on levels of international qualifications. UK Naric used a well established benchmarking process that it applies to all qualifications and which involves the analysis of a number of factors. As a result, the IMC is rated as A, which is equivalent to an A-level in schools. Exams rated as B, such as AFPC, are equivalent to components of an undergraduate degree.

May I suggest that all financial advisers check that they have qualifications at or above QCA level 4 or they may be surprised that they have not.

The recent online with-profits test from O&M Systems, conducted on 97 chartered financial planners or holders of APFC, 284 IFAs at basic threshold level and 106 paraplaners, provided interesting results. All IFAs, whether advanced or at threshold level, delivered a passmark of 87 per cent while paraplaners had a 78 per cent success rate.

I would like to see more of this type of testing across the industry to check competency levels, to get some weightage on the value of exams and to see if case study testing along the lines of the Institute of Financial Planning results in higher levels of competency.

I have met IFAs who are both certified and chartered who I would not recommend to my friends although I respect them as academics. They would not have any empathy with the lifestyle of a City trader and would probably not be able to get my friends to articulate their aspirations or debt problems. I also know paraplaners who know more about financial advice than some financial advisers. Can we have more quality research on what competency levels are across the advice industry, please?

Having just sat a three-hour exam myself, I know that unless I can practically apply this knowledge, the exam will be of little use. Don’t get me wrong, I fully endorse the raising of standards but if we set the exam hurdle too high while we debate what post-RDR adviser threshold level should be, we may push quality community-based IFAs out of an advice role and into a sales role which will simply lower standards.

Kim North is founder of Technology and Technical



News and expert analysis straight to your inbox

Sign up


    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