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The IFP’s view

One of the fascinating things about the International FPSB meeting that I have just been attending in Cape Town is the level of different regulation around the world and the impact on certified financial planner professionals.

We had a long discussion about the changing face of regulation at the chief executives’ meeting. This was led by the Australians who are just starting to feel the impact of the Financial Services Reform Act which is leading the drive for change in the Asian and Pacific communities.The UK regulatory regime is by far the strictest and most rigorous among the 18 countries represented at our conference.

One of the areas that has baffled me over the years is why the UK has not attracted a greater number of well-qualified individuals. We have 450 CFP professionals and would expect to reach 600 by the end of the year. Other countries have attracted greater numbers. One of the areas where there has been significant difference in other areas has been that financial planning firms support employees to reach a high level of professionalism. In countries such as India and Hong Kong, it is in many cases the only way that they can differentiate themselves to potential clients and prove they are part of a professional code. They have had no other policing in many cases as they provide financial advice to their clients. The CFP licence and the certification process is the mark of professionalism that gives the consumer confidence that they are going to be properly looked after.

Lack of capital is still a big problem for many businesses and this has prohibited faster development of individuals. The feeling has been that as long as you are qualified to meet regulatory requirements and deemed competent then that should be enough.

The UK is now coming through this business drain and hopefully the introduction of the menu system will be the last significant change for a while. We need to see firms spend more on getting all their planning teams up to a professional level. The professional bodies need to be able to offer support by understanding their needs and providing quality support and education programmes. The IFP is running a Depolarisation Day on May 24. In June there will be a whole range of comprehensive workshops to help businesses understand and implement a change to a fee-based financial planning business.

Please take heart that, having survived, the opportu- nities are now tremendous to build profitable successful financial planning practices. The Australian advisers are now looking over their shoulders as the cost of change makes it too much to stay in business in many cases. A lot of our colleagues around the world are going to feel that the burden of regulation that the UK is now starting to come out of and we wish them well as they start their journeys.

Nick Cann is chief executive of the Institute of Financial Planning

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