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Plan to succeed

Some say that any change is an illusion and that the Groundhog Day effect is more common than we realise.

Since the publication of the retail distribution review, we have witnessed a growing trend to suggest that the segmentation of advisers is somehow unjust.

Is it unjust that those who have developed their skills, by becoming chartered and/or by taking the CFP and developing the skill of communicating through the development of a comprehensive financial plan, are not recognised?

The idea that three years experience and being claimfree is enough to carry the badge of professional financial planner barely merits discussion. The public deserve titles that mean something, I doubt that someone with just three years experience could produce a plan of a quality that would deserve them being recognised as a professional planner.

We have an opportunity here to segment the market in a way that allows profess-ionals to charge for a professional service. To argue that this prevents the public from receiving advice does not hold water.

What it does prevent is overcharging for product sales marketed as advice. Many firms are busy moving their whole proposition and they are to be encouraged. Those who seek no change ignore commercial reality.

We need sensible proposals looking at how we test experience and how we keep testing it.

One possibility is to use the ISO standard for financial planning and test the processes in use by those who seek to use experience as a substitute for taking the exams or, better still, as a means to benefit from a longer transition period, say, five years instead of three years.

We then read the revelation that it is just not possible to be an expert in all matters at professional planner level. Does this not simply reflect that those who currently promote non-existent expertise just do not know how a real professional works?

Ironically, it is when you raise your own competence that you realise just how much you do not know, hence professionals call in other professionals and that is the fact that these born-again product floggers just do not get. They belong to the culture where control is everything and introducing another into the advice process weakens their grip on the client.

The general adviser is a workable segment but perhaps the current objections are more concerned with revenue levels in this segment and of even more concern to this group is that to get there you need to be at diploma level.

This step-change in tested competence is long overdue but we must not rush to agree unrealistic transition periods. We need to allow for effective transition and perhaps some sort of validation of current working methods is the answer. The ISO22222 standard could be the bridge we are waiting for to allow for an ordered transition. Some may decide that even this is unacceptable and that is their decision which carries its own “best before” label.

We need to deliver what we promise. If we are to be called planners, then do just that and produce properly costed plans. If you don’t, then don’t hide behind titles, be honest in your promotions. The FSA please note perhaps the promotions rules could help here while we wait for the RDR to take effect.

Planners need to explain to the public what planning is different and how it adds maximum value to the client/ planner relationship. We cannot defend the status quo. In the last year, I have been witness far too often to ongoing commission greedy incompetents far too many of whom would fall under this proposed grandfathering. Let’s move forward, not sideways.

Robert Reid is managing director of Syndaxi Financial Planning


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