The first significant milestone approa-ches with the end of December and the submission of most of the formal responses to the FSA’s retail distribution review paper.
Despite concerns voiced over the number of responses received so far by the regulator, the level of debate has been high. Some individual firms might not be responding but many have been contributing to surveys, conferences and other interactive sessions to express their opinions.
The IFP has experienced a high degree of dialogue with the regulator, other professional bodies, product providers, planners, advisers and consumers alike to share opinion and listen to well articulated views.
The IFP is the professional body for financial planning and would therefore expect to take a lead in further establishing the profession as a result of the opportunity provided by the review in the first instance.
One of the areas that concerns the IFP is the need to simplify the route of entry for the consumer. Historically, one of the main areas of confusion has been created by marketing initiatives which have led to the inappropriate use of adjectives to portray something that the proposition patently is not.
This review process has already thrown up a number of opportunities to disguise the true business and the IFP would advocate not using any adjectives to describe what should fundamentally be three segments, thereby allowing clarity and well defined access to consumer and practitioner alike.
We believe the segments should simply be financial planner, financial adviser and financial guide. Having recently attended an EFPA conference in Barcelona, this would also fit in with where the European market might get to after the implementation of Mifid as more and more practitioners are obliged to embrace qualifications and job competencies.
There has been a lot of debate driven by practitioners about the difference between a chartered financial planner and a certified financial planner professional as we review some of the implications of the FSA’s RDR paper. Rightly, those who gain either of these are proud of the high level of qualification and professional standing that they have acquired.
They both set high standards and excellent examples for others to follow, yet they are undoubtedly different. While this debate enter-tains or even frustrates us on times, the ISO22222 standard for personal financial planning has also raised its head as an alternative which might well be another solution for the regulator and practitioner alike.
Does this approach of trying to select qualifications that are fundamentally different just confuse practitioners and consumers?
The focal point of the IFP’s response to the RDR paper has been to set out the expected competencies of a financial planner. While totally relevant to the UK, they also link into the strong global community of financial planning and the CFP movement worldwide, which curr-ently accounts for over 106,000 CFP professionals in 23 countries.
It makes absolute sense to collaborate and align with the other major countries around the world that are promoting the highest standards in financial planning so that a level of agreed consistency in the role of the financial planner can be defined and captured.
Through this focus on the competency profile, the IFP is able to clearly define financial planning as well as the role and requirements of a financial planner. Many quite rightly suggest that professionalism is not all about exams but few methods currently test all the requirements.
The financial planner competency profile considers the important balance needed between knowledge, abilities and professional skills to assess competent performance. Provided then that an individual has ticked all these boxes, it will not matter whether he has the chartered title, is a certified financial planner professional, meets the ISO standard or all three. The consumer in time will recognise the qualities from the title financial planner.
As we reach the conclusions of the first set of discussions on this review, it is paramount that objective assessment is made of what will benefit the consumer and achieve some of the outcomes that the FSA desires.
Nick Cann is CEO of the IFP