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New thinking for training

David Jackman is on the T&C warpath. The FSA head of industry training is out to bring IFAs into line. Jackman explains that from his perspective as training regulator across financial services, including banking, futures and corporate finance, IFAs need more T&C than most. He claims “some of the highest consumer protection risks are at the IFA end of the spectrum”.

The regulator is challenging the industry on training and competence. It wants to end the PIA&#39s quantitative approach to continuing professional development, which sees IFAs simply clock up a 50-hour minimum of non-specific training activity.

Jackman wants to replace this with a “less prescriptive, qualitative” approach responding to the real needs of IFAs. Training decisions will have to be justified in terms of skill gaps while a less prescriptive approach implies the methods will be left up to IFAs and their training managers.

But the FSA, while claiming it wants to be a hands-off regulator, is also considering making IFAs continually retest themselves in key areas and then produce evidence these tests have been passed during inspection visits. IFAs could be forgiven for wondering in which direction their regulator is heading.

But there is broad agreement that things have to change.

RJ Temple communications manager Liz Walkington says the industry&#39s image needs a boost. She says: “It would be nice if everybody could just do their 50 hours of CPD and be competent anyway. However, after the negative press the industry has been receiving, it would be good to have positive proof of competence.

“If IFAs want to be as professionally respected as solicitors or accountants, then industry standards must be raised.”

Inter-Alliance regional director Brian Steeples agrees. “We do not have a great public image. We need to be more professional and be perceived as more professional,” he says.

Towry Law group compliance officer David Tarr says: “The 50-hour CPD minimum was always a nonsense.”

But there is a danger that more open-ended requirements could allow over-zealous FSA investigators to set impossibly high standards, according to M&E Network compliance director Chris Stead.

He says: “At policy level, there may be plenty of agreement about the right balance but in my experience there is a huge difference between stated policy and what happens on compliance visits.

“The FSA&#39s monitoringofficers are wildly inconsistent. I am concerned that the only time we will find out what the FSA really requires is on compliance visits.”

Sofa director Robert Reid says: “The FSA&#39s enforcement officers need a good dose of T&C themselves.”

Jackman responds: “I am aware of that kind of criticism and I am doing my best to answer it. We try to apply the same standards to ourselves as we apply to the industry. The FSA has a team dedicated to ensuring supervision is consistent with policy.”

If the retesting plans go ahead, many will wonder if anything will have changed.

Most industry people think testing should be left to theIFA firms, arguing that market pressures will compel them to ensure competence.

Reid says: “We should be trying to develop people instead of checking up on them every 10 minutes.”

Steeples says: “It should be introduced. This is about adviser protection as much ascustomer protection. If you identify your areas of weakness then you protect yourself.”

Jackman claims the choice is still open on training standards. He says: “Retesting is just one of the options being considered although it is more likely to be introduced if the industry is seen to have failed on T&C in the future.

“Other options include the reintroduction of hourly minimums although these would probably be higher than with the PIA and would vary according to circumstances.

“Training is preventive medicine for the industry. It is an extremely cost-effective way of regulating for everyone. If firms get it right then they will get everything right.”

Tom Baker

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