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PFS says QCF 3 is fine for bank advisers offering limited range

The PFS says bank advisers should be allowed to give restricted advice with a QCF level three qualification if their product range is regulated or is an extension of the stakeholder product regime.

Money Marketing understands that banks have been lobbying hard to have the minimum qualification for tied advisers reduced from QCF level four to QCF level three under the RDR.

The PFS says this should only be allowed if bank advisers have a very limited range of products available to them.

Chief executive Fay Goddard (pictured) says: “We are happy for bank advisers to be qualified to QCF level three if they are restricted in what they can sell. There could be some form of product regulation, ring-fenced products sold in a certain way or an extension of the stakeholder product regime.

“But if there are no restrictions on what bank advisers can sell they must be qualified to QCF level four.”

Goddard also says advisers offering basic advice must be forced to attain at least a level three qualification.

She says: “If an adviser sells a stakeholder product they need a level four qualification, but if it is sold under basic advice no qualification is required at all.  So where is the risk to the consumers more likely to be?

“The anomaly with basic advice is that it is believed these products can’t be detrimental to the consumer, so there is no minimum qualification requirement. That needs to change.”


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There are 31 comments at the moment, we would love to hear your opinion too.

  1. So QED, if I merge my business with that of one of my friends who has his AFPC, provided I only arrange and advise on plans that a bank advsier does, does that mean I will still be “independant”, provided I refer issues on to him which might requrie level 4?
    How does that differ to me remaining a seperate FSA regulated company from him and referring anything deemed level 4 to him (I.e. G60 work) as I would have done before?
    It’s all starting to come out now isn’t it, i.e. the SII and stockbrokers wanting to be exempt from level 4 and ironically those who are GPs could have to be the most qualified and the least to remain independant when quite obviously teh same thing could be achieved by saying you have to have level 4 for specific action!
    Lookds like you’ve been well lobbied Faye, glad I cancelled my PFS membership….

  2. I am lost for words…

  3. As usual one rule for the Banks…….and everyone else has to qualify to QCF level 4!

  4. The banks will dress whatever limited range permitted up to be the best thing since sliced bread and the consumenr wont have a clue that the adviser is less qualified – if level 3- than any other adviser because the banks arent going to tell them – Must be a joke ?

  5. Hmmm

    Why am I not in the least bit surprised? The banks have been spreading BS for years and years, why stop now? My particular fav at the moment is Barclays calling their sales guys ‘Financial Planners’. A bit ago they had a good rate on cash ISAs, I thought, ‘hell, why not’. So I rang up as was told that had to go into the branch and see a ‘financial planner’. Ah, so its a loss leader to get you in and flog you a bond, I thought.

    So, I thought I’d crack on daft and went in. When the salesman introduced himself as a ‘Financial Planner’ I said ‘wow, I’m studying for my Diploma at the moment, I’m very impressed that someone as young has you has passed the Advanced Diploma, well done!’ Of course, he did not even know what Advanced Diploma was, and indeed he was there to flog me a bond! When I explained what I did work wise he was almost apologetic!

    Hell, are we really going to let the banks get away with all the mis-selling they have been doing and will continue to do. They need to be properly regulated, and their staff need to have the right level of education, i.e level 4!

    Here’s a sorry tale about Barclays from the BBC:

  6. The banks are still a force to be reckoned with. It’s their weekly sales targets that have lead to the majority of complaints in the past. Level 3 or 4 will make no difference because the sales targets will remain and be a drag on the whole “advice” sector.
    It’s their culture that needs to change and nothing so far has made that happen. Another opportunity gone begging.

  7. I cannot say that I am disappointed with Fay because, frankly, I always suspected that something like this would eventually rear its malformed head.

    There need be only one differentiator between IFAs and tied advisers and that is the whole of market scope of the advice.

    The quaification argument is a red herring. I could be QCF6 and almost certainly it would not advantage a single one of my clients.

    We currently have a permission system operated by the FSA. To advise on opt-outs or equity release one has to pass an examination. This system works because I have the choice as to whether or not to mve into a given area. QCF4 for all is being mandated and will waste tme and money and will likely remove up to 50% of the current IFA population.

    IFAs, tied, multi-tied, bank salespersons should all work under the same regime. The last thing we need as an industry is the bancassurers beng advantaged over the very sector that is responsible for the best advice and the lowest complaints figures.

  8. Kind of predictable really! Whilst banks will be duty bound to offer Independent Financial Advice if it is specifically requested – how many customers will walk in and say they want “Independent” Financial Advice as opposed to just Financial Advice. I think we know the answer to that.

    “All animals are equal, but some are more equal than others” G Orwell – Animal Farm

  9. Is this really such a bad thing if the same applies to non-bank advisers as well?

    If, for example, the outcome of RDR, Mortgage Market Review and Pure Protection Review is that QCF Level 3 is required for ISA, Mortgage & Protection products but anything more complex (inc. ANY pension planning) requires QCF Level 4, I think most IFAs would be comfortable with that. I’d remove these products from the Adviser Charging regime but cap commissions on the ISA product so ensure a level playing field. After all, the protection and savings gaps aren’t going to be closed at the non-HNW end of the market by making consumers pay for the advice on what product they should have…

  10. Watched a CH4 programme last night – all the people with Blue Eyes were segregated and then subjected to abuse and mistreatment by the people with Brown Eyes (who were given preferential treatment) – it was an experiment in Racism! Seems to me IFA’s are Blue eyed & Bankers Brown eyed! Obviously the agenda is the irradication of the IFA sector. Don’t belong to the PFS – never will.

  11. Wayne J Stronach 30th October 2009 at 2:04 pm

    Money talks!
    The Banks have got it and they will steamroller any legislation. As a member of the PFS I am disgusted. After 30 years in the Industry I have to met the qualification standards but some snotty nosed ex bank clerk, graduate can advise clients COME ON!

  12. As a member I am appalled by the PFS’s stance on this issue.

    Do they really think that the bank adviser, will see a client realise that they need QCF4 advice and then advise them to speak to an IFA?

    The questionable advice we see on a weekly basis from bank staff is frightening.

    Classic, such as you are a growth investor so you don’t want to be investing in income funds, or cashing in ISAs to fund Investment Bonds.

    Clients who want to buy a house in 2 years time being told to invest into a bond and simply have a bigger mortgage as the returns will be more than the mortgage interest.

    One client had a short term gilt within her managed portfolio, which had been bought above par, and after charges and higher rate income tax guaranteed her a loss over the 3 years she would hold it to maturity.

  13. Matt, you are quite right. The guys and girls in the branches have to sell the correct number of what they are told to sell, otherwise they are out of the door. Whether that particular product is actually suitable is neither here nor there!

    Can anyone actually see this changing?

  14. WHY????

    OK, their products may be simpler & be restricted in range, but they will STILL f*** up overall advice in the race to achieve targets.

    When, oh when, will the great & the good in this industry realise that flogging products is completely different to giving advice & recommendations?

    Some clients/consumers will still end up with bank products that do not fit in with their overall objectives, but this will not matter as it will have been classed as a “suitable product” from the range available.

    Just leave things alone now, it’s 3 years before RDIP becomes the standard so stop messing about halfway through the process.

  15. This is not fair for IFA’s at all. Why should we expect Bank advisers to have lower set of qualifications, when they seem to be the most guilty of bringing financial advice into disrepute. Surely one could expect the banks to have greater funding available for training for staff. I think they are concerned that many of their advisers couldn’t manage the qualifications required! And isn’t that the whole point of RDR – to make sure advisers can manage the job they are paid to do without bringing financial advice into disrepute.

  16. So Alan

    You don’t think that by having done lots of learning about subjects which are a constantly moving target that your clients will be better off? Extra knowledge is a bad thing? Maybe you are the Oracle, but for the rest of us IMHO clients will be better off the more an Adviser knows!

  17. David Trenner - Intelligent Pensions 30th October 2009 at 2:39 pm

    “But if there are no restrictions on what bank advisers can sell they must be qualified to QCF level four.”

    Did you all read down that far before getting so excited?

    I suspect that Fay may feel a bit stitched up by the headline writer, as I think what she is saying is that all proper advisers need to be level 4, but that bank salespeople with a very limited product range can be level 3.

  18. In the interests of the industry as a whole we need to create a career path with stagging posts that allow individuals to give advice and generate income.

    Level 3 is a level at which people should be allowed to give advice provided the product range is limited, it is irrelevant what the banks want, IFA businesses will need it if we are to attract new blood and afford them.

    We must be carefull we don’t get what we wish for, no IFA’s left because they died out.

  19. Knowledge is good. Indeed, knowledge is power, but only knowledge that is applicable.

    It would be pointless studying a welding course unless I planned on buying an arc torch and welding.

    Let’s get this into perspective.

  20. What an absolute joke. The PFS are making a lot of money out of this.

    No respect for the PFS, FSA or you, Fay Goddard.

    Wake up and smell the coffee, you are destroying a fantastic industry. God help you.

    We face the likelehood of level 4 muppets, with no experience, no character and no common sense – hell it’s the PFS and FSA again!

    Viva La Revolution.

  21. Here we go again.

    No need to bleat about it vote with your feet and cancel your CII and or PFS membership. Hit these where it hurst – in their pocket. No debate just do it for even thinking that way.

  22. Fay Goddard has started to annoy me. She has a lot to say about what I suspect she has little knowledge of,that being a long term quality IFA She is a “yes” person and is there to please the people that make her what she thinks she is.

  23. Alan Lakey mentioning welding made me smile as I was qualified as a metalsmith to class 2 in the Army (welding and bench work), Armourer class 1 (small arms) and vehilce mechanic class 3 (due to eyesight I couldn’t get and HGV licence to qualify to class 2), I did my senior Military cetificate (required for promotion to Sargeant whilst an acting lance corporal of 1 week). I’ve got some of my banking exams (the conversion course for level one to 2 and I did start studying for level 2 before I became an IFA) which included some law, accountancy and economics.
    Now while on paper and to the FSA, NONE of that is relevant or will get me points towards my Diploma and allow me to stay in the industry, it does mean I can often come up with novel ways of explaining something to someone who doesn’t think in the FSAs straight lines…. I’ve got some of my Dip papers, but to be honest, very little of what I’ve studied so far has much relevance at all to my clients and as anotehr adviser said, why is there so much focus on people who might exceed the special annual allowance of £150k in one year?
    Why don’t the CII in conjunction with the FSA come clean NOW and say right PPP or SPP level 3, USP level 4 (relevant exam), standard mortgage level 4, equity release level 4 (i know mtges are not part of RDR, but I’ve got a mortgage DIP which counts towards my total DIp points needed), Occ tf Level 6, Divorce and pensions Level 4 and so on and then say right you can be a level 3 adviser, you don’t have to merge with someone else, BUT anything level 4, you have to have a clear introducer agreement in place with a level 4 or 6 adviser to pass over and meet regularly to discuss cases which may need handing over?
    Can we PLEASE have some common sense and a clear path sooner rather than later.

  24. Why oh why cannot we deal rationally with a serious subject and instead of having all this megaphone non-diplomacy.

    The great British public may well be served by stakeholder type products “flogged” “sold” advised or even bought from banks and in many cases that will gradually perculate through society and become a norm for starters. Some will remain with banks who have an advantage of shop front and main street access and few of the overheads of cold calling, door knocking and evening chats on the sofa. Frankly, many yourng people would be well served by level 3 advisers/sales people and advisers giving restricted advice within restricted business, suitable rstricted but suitable limited in product.

    It is when those same customers want more and here the banks will and should tighten up their act (and frankly so should some so called IFAs who currently churn and sell as per the old type leader board generation). Financial planners, independent financial advisers and whatever we are called need to be at a high level and seen to be so and wherever they work be recognised and subject to discipline of a professional body. That suggests by say 2013 all at level 4 and say within 5 years after that at level 6 which is the standard professional level for our peer group of professionals.
    Now that does INCLUDE bank independent advisers or financial planners who should be no less qualified and subject to rules than say the bank solicitors, bank surveyors, GP doctors or hospital doctors who are equated with those in private practice.
    That should be the aim for our next generation and until we set out that path then do we deserve to get highly qualified young graduates starting in our firms?

    Fay Goddard is right – but it is what is unsaid that worries me. Let us be honest about the future: set out the aim and those of us who wish to practice in the future get qualified as our young peers are doing (hard I know to my cost!) and see the real profession well above level three being the aspiration of many highly qualified indpependent financial planners of the future.

    So yes Fay, level 3 OK but ensure it is for restricted products – no mushiness – just level 3 for level 3 products?stakeholder. Then tell us the rest of the road for the future as the PFS sees it. I am proud to be a member of the PFS and trust I can help in my old age get us on to the road aka Professor Gower back in the 1970s.

  25. Thanks very much for the support from the PFS!!!!!!!!

    Who is likely to give the best advice. An adviser with 30 years of working, face to face experience with clients, or a bank adviser with a few months experience and level 3 qualifications.

    It must be QCF level 4 for all.

    If the banks are to be let off the hook again perhaps we should all fail to renew of PFS memebrship.

  26. what is the point of the RDR?

    now it is getting watered down by the biggest recipient of its largesse – the CII.

    Banks offer access to the many to financial advice and products now that the home service and direct sales forces do not exist.

    But why allow a group of cost income ratio, product sales orientated, pushy and less knowledgeable away with a lower qualification than others?

    Having worked for a high street bank previously, I know for a fact that it is pressure to shift produucts all the time that forces staff to act the way they do. First calls, second calls, product sales, leads – repeat ad infinitum………………………..

  27. Its inspiring to hear from so many independant financial advisors who clearly have no sales related targets and whose remuneration is in no way affected by the volume/value of the products they sell, sorry advise a customer to buy.

  28. I really am quite surprised at the response to this one. “it must be QCF level 4 for all” about sums it up.

    I’m totally amazed. QCF level 4 is a complete and utter nonsense. It is no where near demanding enough for proper Independent advice and yet at the same time it is far too difficult for the 95% who sell for a living.

    QCF level 3 is more than enough for basic sales – Tied or Independent makes no difference.

    I can’t wait to see how you all react when the level goes to QCF level 6 minimum

  29. To John B – The IFP want the FSA to return to the RDR 1 split which would put Planners up on level 6 and General advisers at 3/4, which provided both can have Independant in their title I would be happy with and might work through level 4 towards level 6 if my business/clients required it. Clients would then have free choice to opt for a planner with level 6 (at a cost) or use a General IFA (who may need to pass on more complicated/risk/vulnerable people business such as Occ pen transfers and Eq Release)
    All a lot of general IFAs want is not to be forced out of business.

  30. To Phil Castle.

    Current IFAs should ask if they are really giving complex Independent Advice or selling product for a living.

    Although I don’t use the words “Independent” or “Adviser” myself and haven’t done so for years I would be happy to let all sales advisers continue with FPC1, 2 and 3 but restricted to simple product sales only.

    Part of the problem with level 4 is that some Advisers will try and fool the public into think that they have a serious qualification.

    The FSA should really focus on the main product Sales market and NOT force anyone out of business – just stop the unqualified dealing with complex products.

  31. To John – I think we agree then as I don’t min dif people think I sell product or advise and whilst I agree that the term “IFA” has been devalued in recent years, it is important to me to be able to refefer to myself as “Independant” as thta is what I am, Independenatly minded (right or wrong) and not influenced by differntials in commission as what i charge is the same whether it is deducted from the contract or paid to me by cheque.
    As for the level of qualification I agree with a posting from Man in Blank on Citywire. If as he suggests below this occurred and I started lossing business becuase clients wanted someone with higher qualifications, then as a business I’d make a business decision eitehr to upskill, move in to other business areas or focus on one individual area.
    MIB said;
    “The easiest solution is to simply add something about *level* of qualifications to disclosure docs and let clients decide what level of adviser they want – or indeed, whether they’re happy to use someone with a track record who doesn’t have the papers.

    Or perhaps just keep people without the exams away from certain product areas rather than stopping them completely?

    Whilst I never liked Ken Davy’s idea of grandfathering the world and his dog into the proposed PFP category from RDR1, grandfathering with disclosure seems so much more sensible than giving older advisers Hobson’s choice between exams and work based assessments.”

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