There were 120 delegates present, which represented 90 per cent of the membership in Scotland, with 28 guests. The feedback from the event was tremendous and there were excellent presentations covering subjects specifically relevant to professional financial planners.
FSA director Michael Lord was one of the speakers. Typical of how the FSA treats the IFP and members, Michael made himself available for nearly the whole day so that in addition to his session, he could gain a greater understanding of the issues facing financial planners and how financial planning businesses are run by listening to and participating in the debate.
An increasing number of financial planning businesses are putting themselves forward to be involved in the “shadowing programme” which has so far been very successful. This is a genuine move from the FSA and the more mutual understanding that exists, the better the regulation.
During Michael’s presentation, he talked about initial feedback on use of the menu. He talked about an initial survey of 100 small businesses post-depolarisation and reported that the large majority had decided to stay independent. Of this 100, 23 had based their fee schedule on the menu template which clearly demonstrates that they have no intention of using it because it can have no relevance to their own business. Seventy per cent of the documents received had errors and firms that had used the combined IDD had most errors. Five per cent of firms had no formal fee agreements and it was also noted that firms in a number of cases had failed to demon-strate evidence of research or selection of products from the whole of the market.
Ever since CP121, I have been consistent with my prediction that only 15-20 per cent of the advisory market will emerge as genuinely independent fee-based financial planning and that number will be over the next two-five years. What the FSA initial research shows is that there are still far too many businesses that are not geared up to deal with their clients in a professional way, nor have any intention of transitioning their business.
Recent research and opinion from IFAP suggests that the consumer is confused with all the different qualifications and titles around. Of course they are but qualifications are only part of what a consumer is looking for. They are looking for somebody that they can trust. Since 1995, the IFP has been the UK affiliate of the FPSB and responsible for the marketing and admin of the certified financial planner (CFP) licence.
We are now proud to have 500 individual CFP professionals who are offering a professional financial planning service to their clients. The IFP focuses its activity on supporting financial planners and financial planning businesses. The CFP professional is promoted to the public so that they know when they meet them that they have achieved the highest standard in financial planning and they have reached a certain level with examinations passed via a variety of education providers. Most importantly, they will have been tested on their application of their knowledge via a case study. The financial plan created needs to meet the standards demanded by this international accred-itation and the individual must sign up to a code of ethics and professional practice, maintaining 30 hours of CPD a year.