View more on these topics

School of thought on revamping exams

IFAs could be going back to school as Money Marketing reveals plans are

afoot for a major shake-up of the existing exam system.

The FSA is believed to be considering several options, including raising

the standard of the benchmark FPC exam and the introduction of an

intermediate exam between FPC and AFPC.

It is also believed to be investigating the break-up of the AFPC into

several parts in what Chartered Insurance institute PR manager Steve

Radford calls the stepping-stone approach to exams.

Aifa, Sofa, the CII and the Chartered Institute of Bankers all say the FSA

is considering these options.

But what is wrong with the present system and what do IFAs make of the

changes proposed?

The moves are part of a drive to bring the exams up to date and see more people become professionally qualified.

Radford says: “The idea is to make the transition between the exams easier.”

Many IFAs presently find it too hard to make the leap between FPC and

AFPC. About 105,000 IFAs and tied agents have the benchmark exam while only

6,000 have all three AFPC papers.

Aifa director of policy and technical services Fay Godd-ard says: “There

is a feeling that the difference between FPC and AFPC is too big a step to

take, too big a culture shock. The advanced paper is much more technical

and people who fail it obviously lose motivation.”

But Sofa spokesman Robert Reid says: “The problem is getting people to sit

the exam in the first place.”

The CII says most people who get AFPC are in their thirties while the

average IFA is in their fifties.

Informed Choice managing director Nick Bamford says: “The vast majority of

IFAs are against continuing to take exams to prove their technical worth

because their average age is in their mid-fifties. Only a minority see it

as an opportunity to show the public that they are professional and

continuing to be monitored.

“Raising the standard of FPC gets my vote as it is too simplistic at the

moment, when advisers have to work with quite complex technical products.

But there is nothing easy about AFPC.”

Reid sees a way round the problem of getting IFAs to accept any change. He

bel-ieves people are only prone to object when they do not understand what

is happening. If the reasons for the change are explained at the onset, he

believes they will be more inclined to adapt.

Misys IFA services, which has more than 4,000 registered individuals,

says: “We endorse anything that makes the industry more professional.”

The FSA originally looked at having one exam for the whole financial

services sector from banking to bullion. But the regulator found it

difficult to design an exam.

The FSA is now believed to favour a modular approach to all exams,

according to Aifa. Modules make it easier to switch sectors given the

increasing amount of crossover between them, for example, with IFAs giving

more investment advice.

Goddard says: “It is also not easy to switch between sec-tors even if you

are highly qualified. A more modular approach is more sensible assectors

get closer.”

A complete overhaul of the current system is unlikely before the dust has

settled from the introduction of the Financial Services and Markets Bill

later this year. The CII is already running a pilot scheme which splits the

AFPC module in two.

The FSA itself is keeping quiet on what changes it will make to FPC. It

sets the standards and exam-making bodies, such as the CII, translate them

into exams.

Reid has his own views on things should progress. He says: “I would

actually like to see an increase in standards through peer and commercial

pressure rather than by external means and I would like to see a

correspondence-type task, for example, a case study, rather than a new


The exam review has come out of the FSA&#39s recent consultation process on

T&C. The same consultation has also spawned another project, this time on

continuing professional development and withoutthe FSA imposing its willon

the industry.

The LIA, CII and Sofa have teamed up to form a working party on CPD. The

FSA has asked the working party to make its own specifications on what

should constitute CPD. The party will then design a toolkit for the whole

sector. The ABI and Aifa have also been invited to participate in the


LIA public affairs director John Ellis says: “We are very pleased that the

FSA allowed the industry to deal with CPD itself rather than lay down the

rules itself. They have given us the opportunity and we plan to take it

forward and enhance IFAs&#39 reputation.

“There used to be a lot of irrelevant CPD to fill up the 50 hours required

by the FSA such as conferences and presentations. We want to change that.”

Discussions between the three associations have already started ahead of

the response to the T&C paper CP34, which is due out next month.

The bodies also plan to use the working party to devise a training

programme which will teach IFAs how to take advantage of stakeholder in the

absence of any clear guidance from the Government and the regulator.

The LIA says IFAs do not know how to capitalise on stakeholder because the

current proposals are unclear.

IFAs may have thought they could rest on their laurels once they passed

FPC. But the story is far from over and any short-term pain is to their

long-term gain.

Scottish Equitable European smaller companies jumps two places in the top

10 unit trusts to wrest top spot from CF Bio-Tech. With a return of 149.61

per cent over one year, it has gained more than 25 points to take top spot.

Artemis UK smaller companies, which held the top position for seven weeks

to the beginning of June, also overtakes CF Bio-Tech to move into second


Dresdner RCM Japanese special fund and Close Beacon investment both drop

out of the top 10, to be replaced by Scottish Equitable technology A and

M&G&#39s European smaller companies fund.


Investment View

There were not that many surprises last week although one that did provokea little comment prompts a re-examination of sterling&#39s relationship withthe euro. A 50 basis points&#39 hike in interest rates was more than wasexpected from the European Central Bank. It prompted a bounce in thissickly currency&#39s valuation, bringing the recovery from its nadir just […]

More plan for lottery win than longterm illness says HSBC

Only one in five Brits are prepared for the financial implications of a serious long-term illness, research from the HSBC says. At the same time, nearly two thirds of UK residents have planned how they will spend their lottery prize should they ever win. These numbers are especially significant with families who have young children. […]

Pru to float in New York

Standard Life says a new poll shows support for demutualisation has fallen from 32 per cent to only 18 per cent. The poll is the latest move by the life office to combat the campaign by carpetbaggers to force it to convert. The MORI poll was conducted nationwide with a random sample of 500 voting […]

Now FSA wants &#39why-not&#39 letters for stakeholder

IFAs may be forced to write clients “reasons why not” letters if they donot recommend stakeholder pensions.Intermediaries fear the FSA plan would increase the regulator&#39s powers,effectively leading to it controlling the advice IFAs give.The proposal was outlined by FSA conduct of business policy adviserRichard Cockroft at a stakeholder think-tank at last week&#39s PIMS 2000conference.IFAs at […]

Greg Broomer 2

Survey looks at the challenges facing businesses post auto-enrolment

A survey conducted by Johnson Fleming at the Pension & Benefits Show 2014 highlighted the key challenges faced within organisations post auto-enrolment. The results showed that communicating the changes and the value of them to staff, and receiving timely data from the payroll provider proved to still be the most challenging aspects of managing an auto-enrolment scheme.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm