View more on these topics

TSC MPs warn of RDR abandoning IFAs

MPs in the Treasury select committee have raised strong concerns about the effect of the RDR with some suggesting that IFA trade bodies are not doing enough to help older advisers unhappy about the new qualification requirements.

Speaking at a committee evidence session this morning, Aifa director Robert Sinclair and IFP director of operations Steve Gazzard were asked what they were doing to help older advisers, many of whom were constituents of MPs on the committee.

Committee member and Labour MP for Leeds East George Mudie said he represented constituents very unhappy about the RDR. Addressing Sinclair and Gazzard, he said: “I have a lad in his late 50s who has been in the industry for 20 years and you have left him abandoned because he is not passing the exams. He is out of a job.

“Is there an effort being made to get an assessment system that will rescue these lads and lasses who have been in this industry for many years and are now stranded and are not able to work in the future?

“You are saying there is a way forward but there are difficulties, are you intent on getting that way forward or is this just words?”

Sinclair told the committee that he agrees with the QCF level four benchmark qualification but suggested the “cliff edge” date to comply with the RDR is “unfortunate”. He said the industry has been unable to find assessors who could deliver work based assessment instead of formal exams.

Gazzard said that it is not something which had been raised to him by IFP members.

Sinclair told MPs the debate has been reduced to talk of exams and commission. He said: “It feels as though we have come down from dealing with some really fundamental economic issues within the industry and actually getting more savings and engagement with consumers, to a debate around exams and commission.”

Sinclair told the committee it is right that professional standards are increased but said he has concerns over whether the shift to level four qualifications by 2012 is deliverable.

He said: “We believe the aspiration to level four is exactly the right level for us to get to, but this cliff edge date at the end of 2012 amid the other cliff edge debates affecting the industry at this time is, I think, unfortunate.”


News and expert analysis straight to your inbox

Sign up


There are 37 comments at the moment, we would love to hear your opinion too.

  1. It would be very wrong if the RDR proposals were watered down in any way. The public need knowedgable advisers and it would be an insult to those of us who made the effort to acheive the level 4.

    if you you are confident in your subject the exams are not impossible they just take effort. if you can’t pass them then either you are not applying yourself or may be you shouldnt be advising?

  2. I’m still not sure what the exam stadrad is going to be for non IFA advisers e.g at the bank where clients are sold these Scottish Widows Bonds at 7% commission with no financial planning?

  3. Diane
    I think you somewhat missed the point. I can appreciate that it is in your own interests that the RDR continues on its race towards a brick wall but there is more at stake here than your own income and ego. And before you make assumption s about me I have no concerns about level four qualifications at all I just don’t class gong collecting as a sport we should all engage in so willingly when it does little to help the public engage with us and do what they need to do. The RDR means fewer members of the public get to see us and that is not good for any of us.

  4. I am an IFA who has been in the ‘profession’ for over 20 years.

    I saw the writing on the wall near the beginning and first passed my AFPC and then became Chartered.

    Although I have some sympathy with the people that are struggling to pass – their lack of forward thinking and lack of desire to pass professional exams has come back to haunt them.

    I believe passionately that financial planning should be a profession – and I can’t think of many/any other profession where a lucky day answering multi-choice questions would cut the mustard.

  5. Can we please stop talking about a “Cliff Edge”

    With the deadline over two years away (and it’s not like we haven’t known this was coming for a long time already), I think ‘gently sloping shelf’ would be more appropriate.

    Or perhaps we should extend it to 2030 – that way people will be able to rely on retiring to get them by and never have to worry about getting properly qualified at all

  6. Well said, Diane – couldn’t agree more.

  7. I agree there is a need to get to level 4 and this is the minimum level it can go to. However, both IFP and AIFA have a conflict of interest in that they offer exams themselves so cannot be truly objective.

    I am pleased that at least part of the debate focussed on outcomes for clients (consumers) and how will the things in the RDR Including exams ensure better outcomes for clients. I am not yet convinced this has been answered in a concise manner and I am certainly not sure the trade bodies are taking up this point. With TCF it is easy to see that the regulator is trying to get better outcomes for clients and despite some concerns it is actually trying very hard to make sure the finance community does better for them – no problems here as this is actually good for business. However, I am not sure they are managing to be as clear and concise in the RDR message which is being hijacked by all sorts of interested parties which not only includes insurance companies, networks and software providers it also includes the trade bodies.

  8. It wouldn’t be so bad if it was just a case of holding a leve 4 qualification – but even those with the CII diploma have a problem if they have not covered all 132 learning outcomes – again with the 2012 deadline. In fact, you can be 1 exam short of chartered status and still have over 40 learning outcomes to meet according to the CII gap-fill tool.

  9. Passing exams is supposed to raise the level of professionalism.

    Advisors who work for large organisations especially banks, have no problems passing these exams as their employers are able to offer them every assistance.

    However these same advisors are also the biggest offenders when it comes to unprofessional advice.

    Go figure…

  10. Sorry AIFA too little too late we have got on with it and represented ourselves!

    Still nice to hear from AIFA ……at

    looooooooooooong last ZZZZZZZZZZZZZZZ

  11. Just one of the fundamental problems with the RDR (apart from its monumental and ever-escalating cost, like that of the FSA itself) is that it plans to force onto thousands of long established quality advisers the requirement to requalify in all sorts of areas quite outside or beyond the scope of what they actually do. Requalify, or you’re out (of business and work and income).

    Does the IFA sector have a history of systemically doing a bad or incompetent job without due care and attention to the best interests of its clients? With only a few admittedly unfortunate exceptions, no it does not.

    At the same time, the manifestly un-TCF activities of the banks continues to go virtually entirely unpunished. The FSA has said it disapproves of target-driven selling practices, yet target-driven selling practices are the very foundation of the banks’ retail financial services operations. The FSA has said that it disapproves of suitability letters made up of patch’n’paste standard texts, yet this is exactly the basis on which most bank suitability letters are constructed. The FSA has said that it disapproves of excessive adviser charging, yet where do we see the most common practices of 6, 7 & 8% commission on Investment Bonds? The banks, of course.

    Attempts on the part of the FSA to impose at least some semblance of TCF are met with legal proceedings on the pasrt of the BBA (though I agree wholeheartedly with a challenge to regulatory reviews by hindsight).

    The RDR is just a malicious distraction from the real ills of the industry, an increasingly tattered figleaf trying ever less convincingly to hide the FSA’s impotence when it comes to regulating the banks. The rest is a smokescreen.

  12. Qualifications are a good bench mark as to a person’s technical knowledge and ability but they are not the panacea to being a good financial adviser. This comes with experience and good interpersonal skills with the public in helping them to achieve their financial goals. So please stop the academic snobbery and let us concentrate more on the competency levels to give advice whether this is by experience or qualification or combination of both.

  13. I am so pleased to read this and see so called representative bodies called to account – in truth they have betrayed the IFA community and continue to do so. Now its their turn and the fight back starts with The House of Commons debating ‘The regulation of independent financial advisers’ on Wednesday 20th October at 11am. The debate is to be led by Harriett Baldwin, MP for West Worcestershire.

  14. Exams, Commission, RDR, Price of bread etc.
    Will people refrain from moaning and talking about RDR and do something positive please.
    I have written to my MP (as should every Adviser) and asked him to attend the meeting tomorrow with an open mind.
    2012 will arrive quicker than you think and with the CII placing greater emphasis on history, dates, Acts of Parliament and backroom stuff just to fill two hour exam papers that dont ask real life questions then i am sorry to say but RDR will acheive nothing.
    Professionals with a string of qualifications but can’t sell will be managed out of the industry and people who manage level 4 by the skin of their teeth (and then forget the exam study material) will continue to flourish providing they sell in volume. No change from now then?

  15. jeremy stuart-cox 19th October 2010 at 3:57 pm

    whilst the need to achieve the qualifications is not in question I think there is a more pressing problem that needs addressing. Namely who are all these highly qualified IFAs going to sell to? Obviously our “finger on the pulse” regulator feels that a fee based remuneration system will suddenly mean products will no longer need to be sold because everyone will now be taking advice. Don’t I seem to remember being told that the only reason people weren’t taking out pensions was the commission that brokers received put the clients off. So stakeholder was invented and pension sales plummetted.
    RDR is going to push a vast swathe of those who currently can access independent advice down the bank/restricted advice route and neither the regulator, government or trade bodies seem to care about this. All they want to do is focus on the easy stuff; namely exams.

  16. @ jeremy stuart-cox. Sorry the need to achieve the qualifications IS in question.

    Take a simple product like a stocks & shares ISA or SH pension or….. There is really very little to know about these products if arranged as a collective. For those who “sell” these product, using a research panel there is no reason whatsoever for higher qualifications.

    For those who live in the more complex world Q level 4 on the other hand is woefully inadequate.

    In requiring Q level 4 for all the FSA could not have come up with a worse decision.

    The solution is simply to remove the words Independent and adviser from those without Q level 6 or higher and let the rest of us get on with trying to close the savings gap.

    It goes without saying that grandfathering at the present time is essential. Only those who are deluded as to their professional and or academic status or who are more concerned about their own self interest and not the public interest will disagree.

  17. AIFA BOOT ON OTHER FOOT 19th October 2010 at 4:31 pm

    You may be aware that Harriet Baldwin MP who is heading up the Westminster debate tomorrow and Mark Garnier MP who has made his views on RDR know via the TSC were all part of the MP IFA meeting last year that was much criticized by AIFA as crude lobbying on the part of the IFAs concerned. AIFA instead preferred to cuddle up to Mark Rubber Stamp Hoban MP.

    Well now AIFA the boot is on the other foot! It is a grass root movement that has got a debate in parliament and the same movement has called you to account for your lack of IFA support!

  18. I emailed my MP about this and was pleasantly surprised that he telephoned me within an hour and had a good understanding of the issues.

    There appears to be a real momentum behind this now. If you haven’t already emailed your MP, please do. go to

  19. I quite agree with the MPs who question the AIFA about their lacklustre performance with regard to RDR. As for Diane suggesting the RDR proposals should not be watered down she talks only of “passing exams”. We can all do that but what about clients who cannot afford to pay fees and will be reluctant to call for advice when they know the clock is ticking?
    I suggest she gets in the real world. 26 years of experience and I am now having to learn about EU Directives etc. how can that possiblly make me better able to advise my clients?

  20. Exams dont count for diddlie squat other than to confirm one was able to hold sufficient information in the old grey matter to pump it out for 3 hours at a time. Afterwards the whole industry will go back to back to doing what is is now and has been for decades – selling, not advising. Please those of you you charge clients fees dont get on your high horse and say we are advisers not salepeople! Crap, you sell the service you provide – you simply charge for it whether or not the client takes your recommendation. In my view that is tant- amount to daylight robbery.What we need is to get back to the art of selling – selling to the need and get highly paid for it. As long as the client knows what they are getting and everything is disclosed before the clients sign, what the hell is the problem? You should not be ashamed of the commission levels we earn. I joined this busines in 1989 and in the last 21 years have built up a world of experience – why should clients who want to deal with me not pay me a decent level of commission for what I know and do for them. All the time (blood sweat and tears) I have spent in this business is not for the good of my health you know. I have been salesman in this business for 21 years and am proud of it. Give me a break. I would rather be a well paid salesman with lots of happy clients than a miserable and poor “adviser”. Clients needs are there to be sold to. Get real about life you lot.You so called “advisers” are nothing but a bunch of snobs who like the idea of calling yourselves advisers – You live in a fantasy wolrd quite like the FSA its a fancy title and means nothing the public. They want people who find solutions to their problems and we sell to this need. 97% of “IFA’s” are slaes people, always have been always will be and that is how it should be. If you are good you will earn and earn well, if not your in the wrong business. Get out stay out and shut up. Dont lets loose good salespeople because a bunch of morons in Canary Wharf put us out of business because they live in a world of thier own and actually believe these exams will make a difference. They need sectioned if they truly believe this and have no right to be in a position of responsibility in any walk of life.

  21. I have a suggestion, why not just ban all advice? What value do advisers add? They spend all day giving their opinion on blogs like this so they can’t be doing much new business can they? Or is what they write so lucrative that they work just one hour a day?

  22. All AIFA members should resign 19th October 2010 at 5:24 pm

    On the point of the level four qualifications, Sinclair, who is the main contact at the trade body until Stephen Gay takes his post as chief executive, said AIFA does not back grandfathering.

    It is time for all AIFA members to resign and redirect their fees to Adviser Alliance

  23. Good man Tom Scott 19th October 2010 at 5:28 pm

    AIFA has not represented the IFA grass roots and they are history because of this. Get up and start to fight for your rights. As Tom says there appears to be a real momentum behind this now. If you haven’t already emailed your MP, please do. go to

    PS if you are a member of AIFA – its time to vote with your feet!

  24. Why should IFA’s only be considered for preferential treatment ?, Bancassurance advisers are in no doubt where the future lies. Grandfathering must be viewed as the “Old Boys Club”
    I say get current or get out!.

  25. Some really good comments here from the likes of Simon Mansell, Julian Stevens etc. Those of you who insist that Q level 4 and fees are the answer to this industry’s problems are either deluded or preoccupied with the fact that you may (possibly) have jumped the gun by paying for and taking those dumb exams. You keep ignoring the fact that it is immoral to keep moving the goal posts for advisers. We need to be able to get on helping the public fill their savings and protection needs.

    As for AIFA…….

  26. “Sinclair told MPs the debate has been reduced to talk of exams and commission. He said: “It feels as though we have come down from dealing with some really fundamental economic issues within the industry and actually getting more savings and engagement with consumers, to a debate around exams and commission.””

    Exactly – I have been speaking to MPs for an age regarding this and have made my feelings completely clear to those involved in tomorrows debate. This should not be reduced to a discussion about exams and commissions but regulation as a whole and how the broken regulators need to be fixed, really quickly, before they put the very people they are supposed to be regulating out of business and the very people they are supposed to be protecting out to dry with no one decent left to advise them.

    If this debate tomorrow ends up being all about commission and exams I for one will be very disappointed and feel that the people concerned have really missed an opportunity.

    I hope that the usual industry mouthpieces are shut up for once and the real guys out here trying to run a business for the benefits of their clients are finally heard.

  27. It is not exams and professional qualifications that is the problem, it is the whole raft of changes that continually happen all to disenfranchise more people from obtaining advice in the long run.

    We have pensions simplification and it all gets stood on its head, We have RDR and it will all be changed within two years of it being implemented.

    Advisors run businesses, deal with clients and do the 101 other things that are involved. Just give us a break and let us have a track to run on for a period of 5 – 7 yearrs without introducing some new initiative!

  28. David Quarrell APFS 19th October 2010 at 7:19 pm

    Alas I am Chartered and still have filled only 52/132nds of the dreaded gap requirements!

    Why did I bother?

  29. Yes it is too late to start even thinking of making exceptions, grandfathering etc. It would be totally unfair to those of us who have made the sacrifices and simply got on with passing the examinations. We need to raise the standards so anyone who does not pass the exams by the deadline could always simply act as a professional introducer to a qualified IFA. We already have such a system where for example IFA’s do not have the qualifications or their company the permission to carry out pension transfers simply pass such business to those who in addition to having passed examinations have the necessary experience.

  30. Well, I’ve been in the Industry (and that’s what it is, not a profession) for more that 40 years and I have no concerns about passing more exams, but I do resent the time it’s going to take, not to mention the costs charged by the businesses (and that’s what they are) peddling them.

    Will it make me a ‘better’ adviser? I don’t expect so.

    Will it improve my knowledge and ability? I’d be amazed if it did.

    Will it improve my standing and relationship with clients or the service I provide? I doubt it.

    I also have to say that in my experience, some of the least able and most incompetent twerps I have come across in the Industry have been those with the most letters after their names, although I hasten to add, not all of course.

  31. This talk of us being a profession is just nonsense. Professionals (legal, financial, medical etc) do not need to write a detailed report running to 20-30 pages, backed up with independent evidence, for every piece of work they do. Even if you are chartered, you still have all of your work, every single thing you do, documented like you are a 10 year old. So we will have the worst of both worlds, very high training and examination requirements and we still have to explain and justify every single thing we do. Bonkers.

  32. Paul H – is right RDR is not about turning IFAs into a “profession” whatever that may mean.
    The clue is in the title.
    It is all about shrinking the IFA sector to a very small elite and passing the mass market to their old buddies in the banks and mega insurance companies as these are the places those implementing this aspire to retire to on fat salaries and share options in a year or so as reward for rigging the market.

  33. He said: “The current minimum financial adviser qualification is at the same level as a diploma in shift management offered by McDonalds.”

    He added: “The products that are being sold by IFAs are infinitely more complex and long lasting in their effects than a Big Mac.”
    Mark Hoban 20.10.2010

    Hear Hear

  34. @ anonymous 12:14 – yes some products being sold are more complex but the majority are not.

    For complex products level 6 or higher should be required but for basic simple products level 4 is unnecessary. The exam papers are Micky Mouse and irrelevant at the same time – those who set them and those who support them should be ashamed.

  35. Anonymous | 20 Oct 2010 12:14 pm

    ‘long lasting in their effects than a Big Mac’

    Not if they do not understand food hygene standards and stock control I assure you.

    You choose to belittle managers in the food industry, these are complex food outlets with up to 60 staff, the turnovers of these businesses are massive and they manage inexperienced young people with dangerous equipment and large amounts of cash.

    That is a manager of their industry compared to a new starter in ours.

    Once a new recruit gets an adviser position the real training starts and that is not academic training I assure you, none of that teaches you how to use pension profilers correctly for instance.

    I can understand the assumption that the qualifications must be better than not having them, but not if you realise that the qualifications do not train staff to advise or use the everyday equipment required in their day to day work.

    The initial exams are a good preparation at 280 hours plus exam time, I imagine Mcdonalds training is good for experienced staff to take them to management level and because they are experienced they can achieve this in only 85 hours.

    Advanced qualifications are not specifically designed for advisers if you start from this true fact then you understand the argument.

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