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Low level of advice skills at the FSA

Less than half of the 241 staff in the FSA’s small firms and contact division have a full financial advice or mortgage advice qualification at QCF level three or higher.

According to figures obtained by Money Marketing through a freedom of information request, just 17 of the 241 staff in the FSA’s small firms and contact division have a full financial advice or mortgage advice qualification at QCF level four or above. The division has 10 supervisors with full financial advice level six qualifications.

Of the 92 supervisors with QCF level three full financial planning or mortgage qualifications, 44 have the old financial planning certificate from the CII, three have the CII’s certificate in financial planning, which replaced it, and four have the ifs School of Finance’s certificate for financial advisers.

On the mortgage side, 30 have the ifs School of Finance’s certificate in mortgage advice and practice at level three and 11 hold the CII’s mortgage advice qualification, also level three. Three supervisors have a level four mortgage qualification.

Of its supervisors with full level six qualifications, the division has one Chartered Insurance Institute chartered financial planner, six staff with the

CII’s advanced financial planning certificate, two fellows of the CII and one associate of the Personal Finance Society.

One supervisor has the certificate of compliance regulation and one has the UK certificate in compliance.

Under the retail distribution review, the FSA is forcing all advisers to gain a QCF level four qualification by January 1, 2013.

In May, advisers called for the regulator to raise the qualifications of its own supervisory staff in line with the RDR changes.

Syndaxi Chartered Financial Planning managing director Rob Reid says: “This shows that not very many supervisors in the division are qualified to a significant level. It would be very hard to make a judgement about the advice IFAs are giving if they do not have any financial advice skills themselves.”

An FSA spokesman says: “Financial qualifications are not a prerequisite for employment in the FSA. The skill set for supervisors is different to that of financial advisers who offer advice to their customers on retail investment.”


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There are 38 comments at the moment, we would love to hear your opinion too.

  1. Do as I say, not as I do!

    Surely the skill set for supervisors should be higher than those for whom they are supervising?

  2. Can not believe this and this is the regulator that came up with the RDR process.

  3. Those who can do… Those who can’t regulate.

  4. presumably they will all have to be at Level 4 by RDR or leave the industry?

    HA! fat chance!

  5. Makes you a bit suspicious as to the REAL motives behind the RDR doesn’t it??!!!

    I think we all worked that one out a long time ago!!

  6. To be fair when they let some adviser loose on the general public after passing CF1 ‘provided that they have supervision’ (how far this supervision actually extends is debatable!!) this really doesn’t surprise me.

    Lets be honest based upon the industry as a whole looking at contact centre staff you can hardly say that when as an IFA you speak to someone in a life office that they’re likely to be fully FPC/CFP qualified. Surely the thing to do it as for the level of qualification in the same way that our clients have every right to ask for ours.

    Having spoken to a rep at Woolwich about 6 months ago for a case update to be given the jargon in an apparently ‘efficient manner’ to then be told after asking a specific question he’d only worked there for a day it’s not a revelation.

    Yes this shouldn’t really apply at the FSA but than thats life I’m afraid. At least they have qualified people at the top (which is more than can be said for some of the head of the banks)

  7. the title says it all

  8. Now we know for certain why so much rubbish comes out ofthe FSA. They have no idea how an IFA works. A few have qualifications but I expect none have work experience. This is a disgrace

  9. Ah! But they are very skilled at writing huge meaningless documents that cost a fortune to print, take us weeks to read and understand so that we cannot get things right even if we try…..surely that justifies their huge salaries?

    Perhaps qualified people would write documents in plain English telling the reader what is required – oh yes – just like when a qualified IFA writes a suitability report for his/her client, because if it was over complicated and hard to understand we would be accused of not treating our customers fairly wouldn’t we? Duh!

  10. Incompetent Regulators Awards Team 19th August 2010 at 9:43 am

    Something I have gone on about for years.

    What about the FOS probably even worse and they make major financial decisions on adjudications for compensation on ther behalf of clients with a total lack of knowledge, understanding, experience and NO EVIDENCE. There have been some outrageous decsions made by unqualfied adjudicators and ombudsman alike.

    I was told by an X-FOS adjudicator that all staff have been told from senior management not to answer any questions regarding their qualifications to anyone who may ask. What have they got to hide? Nothing, because they have none. For the record if there was an audit on firms who feel they have been hard done by then the FOS would be shut down for incompetence and assisting fraud. Go on SOCA get the boot in.

  11. surely you need to have experience as an adviser to be able to assess advice? I also would of thought (common sense) that seeming as they deal with compliance, that they should have compliance qualifications/experience? It’s a bit like me telling Alex Ferguson how to manage a football club! Anyone who can’t complete the exams by 2012 can always go and work for the regulator

  12. FSA staff with low levels of financial qualification? Next you’ll be telling us that the Pope is catholic.

    The response from the FSA spokesperson says it all really; mealy mouthed nonsense.

  13. much the same as driving a car without a license is it not.

  14. Another easy swipe at the FSA (god rest its soul). If Anonymous’ was correct, all the best traders, corporate financiers, bankers, brokers, etc, would not be working for their employers generating GDP for UK plc, but in non-profit making regulatory roles. The FSA’s wage bill would then have had to be enormous with the bill being picked-up by an industry of second raters. I don’t think anyone would seriously believe this approach could or should ever happen.

  15. Hypocritical twaddle. If those of us who’ve been in the industry for more than a few years don’t need additional qualifications which are of no obvious benefit to our clients because our (unproven) experience at the coalface is all that is necessary, then what on earth does it matter what qualifications FSA staff have?? Surely it’s all about experience??
    Plus it’s worth contemplating that whilst we may be the most egocentric bunch of people around, the financial services world is bigger than us and the FSA does actually regulate more than IFAs and mortgage brokers, even in the small firms division.

  16. Robert Donaldson 19th August 2010 at 10:05 am

    As we all know the FSA very much works on a box ticking exercise. Eg. Did you do a fact find, did you asses their attitude to risk etc etc. To do such you do not need the QCF level 4 skills.

    They go by the rulebook a bit like policemen You adhered to the rules you broke the rules!

    However, I would expect much higher skill levels at the Ombudsman who is sitting in judgement on complaints submitted the by the public some of which come from the IFA sector. Anyone fancy getting that information un the FIA.

  17. Jon-Paul Rougeolle 19th August 2010 at 10:10 am

    Good to see the Daily Mail brigade on their high horses again expressing ‘outrage’ and ‘disgust’ at such woefully underqualified regulators. I don’t think the FSA issue hinges on qualifications – it is right that the advisory sector is educated to a standard that allows them to objectively assess a client’s situation and provide a workable solution; it is irrelevant for a regulator – they need to ensure that the details are in the file and that the case holds together, i.e. can this advice be justified? You could teach a kid to do that.
    The real issue with the FSA is the lack of power they hold to prosecute. It takes an age to bring anyone to trial and company’s are so obstructive (what with our cracking legal system) that it is rare to see a prosecution – where we do it is something of a pyrrhic victory and academic in the sense that the cost to prosecute outweighs the fines brought in. We could learn a thing or to from the SEC in that respect – never has the word ‘authority’ been so misapplied to a name.
    Anyway this is article is a nothing story designed to whip up the idiots in the industry into some sort of frenzy. I long for 2012 when a lot of the dross will be gone.

  18. I do take on board Gill Cardy’s point about the Small Firms contact centre not only dealing with small advisory firms. They also deal with small building socities, small friendly societies etc I believe, just as the small practioners panel on which Gill used to sit was made up of different small participants. However, IF the imperative is for IFA to have a relevant level 4 qualification in order to practice, then arguably, those in atority, should have a relevant level 4 qualification from 2012 (not neccesseraily the Diploma in FS, but something RELEVANT, not a degree in fine art….)
    With the FSA, it should be more about policy and hence whilsy they need some people with practioniner experience in order to make sure policy is relevant to practice, it does not mean all should have relevant adviser expereince or qualifications, but ALL should have approprioate qualifications to the roles they are doing
    There is, as another poster said, much greater need for FOS staff to have not only relevant experience, but relevant qualifications in my opinion, although arguably, not all staff at the FOS should have the same quals and experince, a mix is needed of staff with FS quals and experience and legal/mediation skills. Unfortunately I suspect many have none of these qualifications OR experience, but who knows? It is sad the FOS system is mandatory as I suspect many consumers as well as firms would like to be able to select their own ADR provider by agreement with teh otehr party so that they KNOW they are getting one with relevant experince and knowledge.

  19. Alasdair Sampson 19th August 2010 at 10:48 am

    Interesting article, and perhaps tends to explain why so many of my IFA clients find difficulty in dealing with FSA investigations.

    I act for IFAs in connection with FSA investigations, both at Supervision and in Enforcement. Regrettably there have been many instances where the FSA heavily criticise an IFA for failing to know, understand or to apply what can be very complex rules when their officers seemingly do not know or understand their own rules.

    If an IFA remonstrates over their interpretation of the rules the tendency of the FSA officer dealing with it is not to respond to it in any substantive way but simply to get out a bigger stick.

    The reason the FSA “wins” so many cases is not, with respect, their superior knowledge of the law and rules or their investigative skills but simply because the FSA has rarely had any real opposition to it when dealing with small firms.

    So far as I know there are very few if any other solicitors throughout the UK who handles FSA investigations against the small and medium sized IFA firm as I do. If an IFA client has the resources, and the nerve, then the only way to deal with the FSA is to make it realise that if they really want that IFA’s scalp on their belt then they need to be prepared to be challenged and tested at each and every stage of the process. And challenge and test them I do, very vigourously.

    I always advise an IFA client to meet its statutory obligation to be open and co-operative with the FSA – but where the FSA acts outwith its legal powers, or does not know the law or its own rules, or founds its case on poor quality “evidence”, or makes needless gratuitous threats of more regulatory action I will not be slow or faint-hearted in vigourously resisting them.

    Sadly, I have found that the FSA’s lack of knowledge and understanding of the law and its own rules can be matched by their lack of skill and judgment as investigators and the quality of what they put up as “evidence”. Too often I am left with the impression, as I have heard very many IFAs say, that when they go into an investigation they have a predetermined outcome already in mind and simply look for the evidence that fits the frame, rather than being led by the actual evidence to a logical conclusion. I have told the FSA that on several occasions. I have no hesitation in stating so here.

    They profess to be driven by protecting the interest of the public but often they seem only interested in taking the IFA’s scalp and pay scant attention to the fall-out their actions can have on public protection. Their regulatory actions drive IFA firms to bankruptcy – who loses out then? The clients. If an IFA firm is bust then the clients have only the FSCS to look to for redress. The IFA’s PI insurer won’t pay out unless the client already has a final decision from the FOS. How does that protect the public?

    The FSA is policeman, prosecutor and judge – with no independent appeal procedure. To me that is a breach of your Human Rights. All too often I hear IFAs say that they fear the regulator. Having a respect for the regulator is essential, and that depends on their technical ability and quality of regulatory control, but fear is no substitute.

    Mr Osborne – when you are breaking up the FSA and replacing it with the Client Protection and Markets Agency (and that name, clearly signalling its bias, should itself send a shudder up the spine of any IFA) could you please give consideration to creating an independent, informal and cheap appeal procedure for IFAs aggrieved at the incompetent investigations, poor quality of “evidence” and the tedious threats employed by the FSA in securing their “wins” against IFAs?

    If you have a problem with the FSA please do email me at –

  20. Whether or not FSA staff should hold exactly the same qualifications as are required of advisers is debatable. HOWEVER, I don’t see why they shouldn’t all be required to hold a qualification in regulation equivalent at least to Level 4.

    If the FSA is to stipulate that all advisers must pass examinations to a certain level, then why shouldn’t all FSA staff be required to pass examinations to the same level according to their particular discipline? As one of my colleagues has pointed out, it’s the same old Doas we say, not as we do(n’t).

    Also, the issue of experience doesn’t come into it, given the very short time that most FSA staff have been employed in a regulatory capacity. In most cases, I suspect, their experience amounts to something between very little and bugger all.

  21. Anonymous 19th August 2010 10:10

    I really hope that you read Alasdair Sampson’s response and that you do not regard him as whipping up the idiots in the industry into some sort of frenzy. I note that your comment was anonymous.

  22. Jennifer Nicholls 19th August 2010 at 11:35 am

    Oh what a surprise. It is a disgrace though. What a clueless lot they are. Yes it seems they have their own agenda.

  23. Picking up on length of experience. The TCF assessment we had was one of the face to face ones. Of the two FSA staff present, the one who seemed to know his onions the most, was the one who had NO experience as an adviser, nor qualifications in that area. The one with the “experience” as an IFA must have had FPC3 I think and seemed proud of having been an IFA (if only for a year… I think he said)
    All I am saying is that we don’t expect the FSA to have the same qualifications and experince as we do, but we DO expect them to have the same level in a RELEVANT qualification (i.e. 3 now, 4 from 2012) as we do, especially with the mandatory increase being enforced upon us by THEM (the industry is divided about whether the increase should be a mandatory cliff or a series of stepped improvements)

  24. The Staff at the FSA should have levels of qualification which at least equal those that they Regulate, otherwise how can they possibly understand the task. They should also have to take time out to study in their OWN time and pay for the fees etc themselves in the same way we are going to be forced to do. Will it happen …………… You have more chance of being bitten by a lettuce. Then again, during the mating season lettuce can be a bit keen ……

  25. Picking up on Phil Castle’s point on FOS qualifications.

    Some while ago I applied for a job as an adjudicator at the FOS.

    They read my extensive CV and asked me to take two on-line tests followed by a case study. Must have been satisfactory as I was asked to Ivory Towers in Canary Wharfe for a ‘Competency Based’ interview. Three or four questions from the crib sheet in front of the interviewers with the result that my application was rejected as I was considered to be ‘too experienced!’

    The HR lady had no finance experience and I doubt the ‘manager’ had ever been ‘in the field’ in front of clients.

    Ce la vie!

  26. At last…maybe after 16 years in the industry I’m finally going to lean how to suck eggs.

  27. Can you imagine solicitors, accountants or doctors accepting decisions on whether they are competent or not from unqualified people. No neither can I.

    They are judged by their peers (I sure that in English Law there is something about you can only be judged by your peers) and so it should be for our profession.

  28. It would be interesting to hear from the same FSA spokeswoman what type of skillset is a pre-requisite for employment. I have always had issue with their graduate programme which places no requirement on real life work. I agree qualifications prepare you to start working in financial services but experience is far more valuable. I wonder what percentage would have a proven track record of success in financial services.

  29. In order to get our staff up to level 4 or above, we are having to spend huge sums. While it is abhorrent that FSA staff do not have either the experience or qualifications I daresay that if we want this we would have to pay more in fees.
    The answer is that the FSA really needs streamlining, to become more efficient and focus on real issues and use the savings made to train (and pay accordingly) its staff up to acceptable levels.

  30. Why do I get the impression that
    “Anonymous 19 Aug 2010 10:10 am” is employed by the FSA

  31. The FSA has lost all credibility and for their sake I really hope they take note of all these comments. As an effective regulator they need to be a step ahead of the game and be proactive but unfortunately they are two steps behind and unreactive.

  32. Donkey”s can’t pass exams anyway, can they??

  33. To Sam Caunt – The salaries of the FSA are perfectly adequate for the jobs they are doing and are well above the national average. The problem is the geographical area they locate their staff in.

    I could never work for the FSA as things stand (even if they’d have me) as I neither want to work in London, or Edinburgh.

    In requiring all staff to be based there (and fly them backwards and forwards as I read elsewhere) whilst doing TCF visits across the UK, they reduce the pool of qualified and experienced people they COULD call upon willing to accept lower salaries. (It also discriminates against the Welsh and Irish as there are only FSA offices in London and Edinburgh so unless you are willing to leave the country of your birth for work, you can’t work for the FSA geographically. Similar could be said for those with disabilities or phobias about big citys)

  34. I used to be one of the loudest voices asking for the regulators to be better qualified in financial services advice than those they regulate. Having met senior people at the FSA I don’t think qualifications are entirely relevant in a supervisory situation but do worry about how many ‘trends’ they fail to spot, this might mean that although they know what a file should contain, what systems and controls should be in place and what a dodgy set of accounts looks like they are unable to reach a fully informed opinion based on practical experience of what constitutes suitable advice, which might mean more cases get to the FOS and the FSCS in future, which in turn means the compensation machine grows like Topsy.

    This week there are 66 jobs up for grabs on the FSA website, if you think their job is easy and all you need is FPC 1 and 2 then you are welcome to apply!

    I was deluded enough to believe (so was Chris) that I could do a good job at AIFA, I didn’t even get an interview!

  35. Richard S. Barratt 19th August 2010 at 4:21 pm

    What might also be interesting is the number of years each member of staff has in financial services. In my view there is nothing like experience.

  36. So relevant experience (how people just out of University have built this up I dont know) is more important than qualifications for the Regulator. And yet come 2012 experience counts for nothing if you want to continue as an independent adviser. The application of double standards is astounding.

  37. Jon-Paul Rougeolle 20th August 2010 at 9:38 am

    @ Leslie Squires

    I choose to remain anonymous as I don’t see why my identity is key in this ‘debate.’

    I have read Mr Sampson’s response and I don’t think that takes anything away from what I’ve already said – he cites the inconsistent approach the FSA take and the lack of knowledge of the law/their regulations. No amount of QCA level 4 financial planning exams is going to help there. What is needed is a regulator who has the power to prosecute properly (rather than chasing tin pot mortgage brokers all the time for small scale misselling) and take on the larger financial institutions who, quite frankly, take the absolute p1$$ with what they involve themselves in. This requires legislative changes right at the top to amend the laws of this country. Won’t happen because there are too many peers who make too much money from dirty institutions. I agree totally that the FSA should be more accountable for it’s actions and you could probably look at having a pop at our ever so wonderful AIFA for not lobbying more against the FSA. Mr Sampson’s final point around the FSA preempting the outcome is the most pertinent observation to date; this is nothing to do with exams. What is needed is a clear set of guidelines for their staff to follow rather than the blunderbuss approach they take now.

    If you genuinely believed that better qualified regulators would be a much better propostion then look at all the CFA standard compliance heads at private equity firms/hedge funds who let lots of things happen (i.e. Goldman Sachs and the simultaneous sell to clients but then short ourselves). This is about processes and procedures not an exam hall and a multiguess paper.

    I speak not in defence of the FSA but to blame their shortcomings because they don’t have the diploma is bizarre. Poor quality journalism and an easy headline. I would reiterate that this is proud headline but a nothing story!

  38. If what I read is correct the FSA have been stripped of their regulatory powers by the current government so if this is the case why is it being allowed to continue with RDR and many other things we complain about. Is there something missing here or is the information being given out generally incorredt

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