First, because of the danger that we may unintentionally disenfranchise a significant proportion of competent advisers and risk reducing clients’ access to professional advice and, second, because the growth of our profession could be constrained for years to come by the difficulty and expense of meeting the new benchmark for potential entrants to the market.
That is why we are urging the FSA to be open-minded about the practical solutions still open to us that will lead to higher standards and also enable competent well-capitalised organisations to allow less qualified advisers to continue to operate, albeit under much closer supervision than today.
Alongside the new benchmark for full IFA status set at QCA level 4, we believe it should also be possible for advisers with lower-level qualifications to continue to advise on a more limited basis and under full supervision, as is the case in the legal, accountancy and medical professions.
We are not suggesting that advisers should be any less skilled in determining the needs of customers, only that they should be allowed to give advice in areas where higher technical knowledge is not required. The same logic applies for specialist advice, where qualifications above QCA level 4 should be mandatory.
This approach would provide a route that enables competent advisers to operate beyond the 2012 deadline, allowing many thousands of valuable client relationships to continue. It also opens up a pathway for new advisers who would not have to spend four years achieving QCA level 4 before they become economically productive to their employer. This approach would not seek to dilute QCA level 4 in any way. We are still asking for the same proof of competency but within a much narrower field.
The new benchmark should not solely be a test of academic ability. It would be a travesty to force experienced and competent advisers out of the industry at a time when consu-mers need more advice, not less. The licensing concept is important because it would allow well run firms to use management information, complaint monitoring and consumer surveys to deter-mine the overall competence of their advisers and would allow an orderly transition to a more professional industry.
Competency in its truest sense is about knowledge, skills and experience. The FSA’s proposals focus far too much on knowledge and fail to acknowledge the importance of skills and experience.
Sesame believes that a progressive licensing system would allow us to retain experience, recruit new talent and allow for an orderly transition to increased levels of professionalism. Above all, consumer access to advice would be protected and ultimately enhanced.
Ivan Martin is executive chairman of Sesame