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Licensed to skill

Training is taking on a new look with IFAs getting more say on T&C as David Jack-man departs the FSA to set up a new body for financial education and ethics.

FSA head of industry training Jackman is taking a third of his team of 15 to the new Financial Services Skills Council. He will also continue his review of examinations.

The fact that responsibility for the exam regime has been removed from the FSA comes as no surprise to many. It never had much of an appetite for a hands-on design of a new regime and wanted the industry to decide the shape of things.

Aifa director of policy Fay Goddard says: “The FSA does not want to get involved on the training and competence front. It believes it should be an industry-driven matter rather than regulatory-driven.”

The skills council will have a wide mandate decided by the Government. It will be responsible for carrying forward the exam review and deciding the future of the exam structure for IFAs.

It will not set exams, as bodies such as the Chartered Insurance Institute will continue their work in this area, but will have the authority to fill any apparent gaps in the exams offered by the industry.

The regime that Jackman and his team have been trying to design at the FSA would see a core set of exams similar to today&#39s FPC and a series of additional modules or exams for advisers wanting to specialise in an area or branch out from their current offering.

Annual or biennial retesting for new and existing advisers has been proposed but it is believed this proposal may be scrapped in the face of almost complete opposition from the industry.

The so-called alphabet soup of designatory letters would be axed as the FSA feels they serve no purpose other than to confuse consumers. There has been talk of a single accreditation mark for advisers, similar to the ABI&#39s Raising Standards initiative for life offices.

According to Jackson, all these plans remain on course now that he has moved to the skills council. The main difference is that the review will be carried forward with more cooperation from the industry rather than having a regulatory-led approach.

Once the skills council receives its operating authority from the Government, it will have a board of industry practitioners. Firms will be able to join the council to add their voice to the debate.

The current membership fee is set at £250, for which firms will receive assistance with training and education.

For many IFAs, this charge could seem prohibitive when added to all the other regulatory fees they face and Aifa fears that many smaller firms could struggle to see the benefits of joining.

Both Jackman and Goddard have raised the possibility that membership of a trade or professional body such as Aifa, Sofa or the LIA could include access to the council.

But expectations are running high for the council and much of this is due to the fact that Jackman is at the helm. He is a well respected figure, especially among those who take standards seriously, and it is believed that he is keen to shed the restraints of the FSA.

Jackman says: “I feel I have achieved all I could at the FSA. The broad framework is in place. It is time to take it forward.”

There has been concern in the industry that the FSA appeared to shove the exam review on the backburner while it dealt with the more pressing polarisation and Sandler reviews. When Jackman first outlined his proposals in DP9 in December 2001, he anticipated implementing the new regime by end of 2002 but there is still no start date.

Another problem is that skills bodies have a dubious track record in the financial services industry. There have been a number of such bodies in recent years, including the Financial Services National Training Organisation, which industry sources see either as being handcuffed by Government funding inertia or simply ineffective.

Goddard says: “We have not had a period of stability. We have had constant change with the Government-appointed agencies. They seem to have been tied up in red tape and bureaucracy. The skills council has got to be able to work with the industry.

“The fact that David Jackman is in charge rather than a Government-appointed individual is good news. He has worked well with the industry in the past.”

The difference with the skills council is that, while still receiving a degree of Government funding, it will primarily be an industry-driven body.

Aegon head of industry development Peter Williams says: “Historically, skills councils have not been successful in our industry. They have been in others such as engineering but financial services has never had a successful skills council.”

Many IFAs will be asking whether any of these changes matter very much to them. There will still be substantial reform of the exam regime, conducted by the same individuals. The difference will be that IFAs will be allowed to take a more active role in its shape if they want to do so.

LIA head of public affairs John Ellis says: “It matters for those who want the profession to flourish and be well regarded by the public. I think the new regime will be more permissive than it was under the FSA. I would hope IFAs take an active role in its development.”


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