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RAISING THE BENCHMARK
A key aspect of the drive to improve professional standards is to raise the entry level of qualifications for investment advisers. The FSA’s Consultation Paper 09/18 “Distribution of retail investments: delivering the RDR” brings further clarity to the qualification requirements for advisers post 2012.
As indicated in previous papers, investment advisers will be required to hold a Qualifications Credit Framework (QCF) Level 4 or equivalent in order to comply. The target date for all existing advisers to achieve this is end of 2012. New entrants to the industry will be expected to study towards a new benchmark qualification once finalised in 2010.
Delivering the change
To deliver this change, the Financial Services Skills Council (FSSC) will consult for
three months from mid August 2009 on new benchmark appropriate examination
standards for retail investment advisers. The FSA expects that there will be core subjects for all investment advisers, including regulation and ethics, personal taxation, investment principles and risk, and practical application of technical knowledge.
Once examination providers have created the new qualifications, the FSSC will produce and maintain a revised list of appropriate examinations which satisfy these standards.
This will enable investment advisers to meet the knowledge (as well as application) aspect of the FSA’s competence requirements by selecting an appropriate examination from the FSSC list.
Bridging the qualification gap - no problem
Those holding an existing Level 4 qualification that does not meet the new standard will be able to bridge any gap between what they hold and the new standard through CPD, rather than taking additional exams. The CPD “gap filling” will need to be completed by end 2012.
Alternatively, for experienced individuals who would prefer not to take written exams (but believe that they can demonstrate knowledge at Level 4 even though they do not hold a Level 4 qualification), there will be a transitional provision comprising an equivalent oral version of the written industry examinations (covering the same technical content). This will only be available between 30 June 2009 – 31 December 2012.
Raising professional standards
Plans to create a new Professional Standards Board are to be advanced so that this is in place by 2012 rather than have the FSA fulfil this role on an interim basis.
A new code of ethics is also to be introduced. The FSA says the code could form part of the FSA handbook, depending on the outcome of the Professional Standards Board consultation. It is likely to be published for consumers as a statement of standards they can expect from advisers.
For further information on relevant qualifications and professional development please go to:
Diploma in Investment Planning
Institute of Financial Planning
