Baldev Sihota is one of several thousand advisers that has not achieved QCF Level 4 ahead of the RDR. But what does it mean for his clients?
In one of many pieces of research released last week, the Financial Standards Authority (FSA) has said that 16% of advisers are yet to pass the exams necessary to become QCF Level 4 qualified.
This is the story of one such adviser, Baldev Sihota from Berkshire-based Guardian Financial Planners. Sihota is 71-years-old.
He told Professional Adviser: “I am yet to take my RO3 (on personal taxation) and RO4 (on pensions and retirement planning) as well as my equity release and long-term care exams. I need to make up the credits required to be able to practice under the new regulatory regime. I won’t have passed them until at least May 2013.”
Sihota explained he has not been able to take the exams in time because he has been caring for his wife, who is suffering from depression.
He admitted: “I have left it too long and have run out of time. It is possible that the FSA may have given me a waiver on compassionate grounds, but I didn’t apply for this as providing all the necessary literature and waiting for a response would be too time consuming.
“Even if the regulator agreed, I would have to be supervised, and I don’t know of anyone that would be willing to take on this role.”
Sihota continued: “As a result I am required to cease the Controlled Function CF30 on my investment clients. The FSA will accept this until seven working days after the Retail Distribution Review (RDR) deadline. I will be ‘varying my permissions’, and this means despite my ceasing the CF30 on my investment clients, the permissions allowing me to offer advice on protection and mortgages will continue.
“Fortunately I have very few clients that are investment only, as cancelling permissions on these clients will mean any trail commission I have from them is stopped for good. The FSA will also inform the providers on my behalf.
“One option, and a way in which I could retain my trail commission, is to take on a second, qualified, IFA to work with me, but it isn’t practical and I don’t have enough time to sort it out now.
“Instead I hope to pass agency onto another adviser. We would both sign a business agreement, and I would write to the insurance companies and transfer agency. The agreement will ensure that the adviser will return the clients to me once I have passed my exams.
“I still have a lot of energy and want to continue to practice, I just hope that I find an adviser who is willing to work with me before it’s too late.”
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From 6 April 2019