Investment, asset allocation, portfolio management ' how much does the general practitioner adviser ...
Investment, asset allocation, portfolio management ' how much does the general practitioner adviser need to know about investment and what skills does he/she require to serve clients with money to invest in Isas and investment products? Where should the line be drawn between generalist and specialist?
The FSA, with the Financial Services National Training Organisation (FSNTO), is conducting a series of round-table discussions with intermediaries around the country to ascertain the levels of competence financial advisers should generally have in the interests of customer protection. It has already said it thinks the FPC's coverage of investment is weak, implying that FPC-qualified advisers may need to top up their knowledge in this area. An FSA consultation paper is scheduled for the autumn.
Meanwhile, the Sandler Review team is preparing its report, which, in our view, is likely to cover the question of advisers' understanding of investment strategy, suggesting they should learn more, particularly about asset allocation.
The CII, anticipating the likely outcomes from the FSA and Sandler reviews, is proposing to develop a top-up/half credit qualification on investment and is asking practitioners for their views of the content of the syllabus. Hence the question of how much general practitioners need to know about investment, what skills do they require and so on.
Generalist advisers help their clients deal with a broad cross-section of financial issues. Investment, though sometimes seen as a specialist area, permeates many of these, with pensions issues being the prime example.
The Investment Management Association (IMA) made an initial attempt to canvas opinion and put together a supplementary syllabus for FPC-qualified advisers some years back. It also runs two one-day courses on investment, one with the AITC, to give advisers that have not passed specialist exams the opportunity to improve their competencies in recommending investment funds and managing them over time.
Understanding Investment Funds has been running for seven years and aims to improve advisers' knowledge and use of investment funds. The Portfolio Planning Workshop was established as a result of demand for more training on asset allocation and fund selection processes and has been running for two years. Both courses are designed to help generalists but we would welcome further thoughts on this.
In a tough business climate, it is hard to look beyond our short-term concerns. However, training and maintaining competence is as important now as in boom times, if not more so.
Advisers have a unique chance, particularly through FSA and CII consultations, to influence their professional standards and the quality of training available to them. Those who choose to adopt a wait-and-see attitude may have to meet new requirements in an uncomfortably short space of time.
If you have views on where the line between the investment specialist and the generalist should be drawn, contact Maxine Irving at IMA on 020 7831 0898 or email: [email protected] She can also put you in touch with FSA and/or the CII.
Victoria Nye is director of training and education at the IMA
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