head of training and compliance at the fsa david jackman outlines revamp of landscape
Investment Week has advanced details of the Government's plans for the overhaul of intermediary training and financial advice, due for release in September.
The present regime will be replaced with a three-tier structure of intermediaries, according to David Jackman, FSA head of training and compliance.
Jackman, also the chief executive of the Skills Council, an offshoot of the Department for Skills and Education, was involved in setting up the new regime which is to be unveiled on 10 September following the end of the CP157 consultation process. The process is being driven by a cross-departmental White Paper, Twenty-First Century Skills ' Realising our Potential, released earlier this month.
The lowest tier of intermediary will be known as a foundation adviser and will only be regulated to sell products deemed low-risk, such as the new Sandler stakeholder suite.
The middle tier will be called a financial adviser, a category that will encompass all current IFAs. The top tier of adviser will be known as a financial planner and will need to demonstrate a higher level of knowledge and attain a newly formulated International Standards Organisation (ISO) accreditation to use the title.
The ISO standard would be internationally recognised and it would also involve a commitment to an ethical code.
For individuals seeking to become a financial adviser, the Skills Council is to introduce a new examination system by mid 2004. It will be similar to an A-level or diploma, comprising five core modules and around 10 non-core specialist modules. One non-core module will cover niche investment products such as hedge funds and others will test knowledge of pensions, mortgages and other areas of the financial services industry. Those seeking to become financial advisers will need to have completed the five core modules while financial planners will have to have passed a number of non-core modules as well. This new regime will replace all existing qualifications.
Existing IFAs will automatically become financial advisers under the new regime and the Skills Council will be offering top-up courses in areas where individuals want to boost their competency.
At present, advisers who sell low-risk products like stakeholder pensions are only required by the FSA to have competent level of knowledge, which is decided by individual firms. However Jackman said from September the Skills Council will begin work with firms on setting formal competency standards.
The regime should be in place by the middle of 2004, according to Jackman, who is working out his last two months as head of industry training at the FSA.
Under the new regime, those wanting to become financial planners will be trained in the workplace as well as in colleges and universities.
More than half of people over the age of 55 see financial security as a top priority in retirement, yet a third allocate more time to buying a new car, research from Legal & General (L&G) has found.
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Alongside Barrett, Hopkins, Boston and Thorman on 17 October