Many financial advisers have already gone beyond the FPC exam to improve their ability to do th...
Many financial advisers have already gone beyond the FPC exam to improve their ability to do their job and have taken more advanced exams, like AFPC or half-credits. For those who haven't, there may soon be a stark choice: demonstrate greater competence, or lose your adviser status and become a salesperson. The main area for improvement is likely to be that of investment knowledge.
Exams for advisers are under review. In November last year, the FSA published a consultation paper proposing a new exams framework for investment advice. The initial aim was to go back to first principles and examine carefully what advisers need to know to do their job well from a customer protection perspective. This is how the need for more investment knowledge was identified. There was also an agenda to raise standards and provide sufficient flexibility to accommodate both generalists and specialists at different levels.
While pleased that the FSA had recognised the need for a higher level of investment knowledge than in FPC, the IMA is keen to ensure that the final standard set is one which ensures investment advice is accessible to the majority of consumers, not just the preserve of the wealthy. In formulating its response to the FSA's CP 157 last month, the IMA worked closely with IFA practitioners. They have provided valuable detail on the requirements of their day-to-day role and a much needed reality check on the competency levels to be expected.
The IMA has also been working with AIFA, AITC and CII on a top-up module, entitled Savings and Investment, which is about to be launched and will be a simple, effective way for advisers to demonstrate that they are up to speed in time for the new FSA standards. The qualification covers: economic factors affecting potential risks and rewards associated with various types of investment; product features, regulatory framework and taxation of retail investments; and, the principles of portfolio planning, including asset allocation to meet clients' needs.
Passing the exam will not make you an investment specialist. For those who wish to become more involved in portfolio management, there will be a choice of more advanced qualifications to take, such as the Investment Management Certificate and the Investment Management Asset Allocation Qualification both run by the UK Society of Investment Professionals, the CII's Investment Portfolio Management paper (G70) or the Securities Institute's Certificate in Investment Management.
As yet it is unclear whether all advisers will have to demonstrate a higher level of investment knowledge via an exam.
Therefore, as alternatives or complements to the exams route, the IMA runs some training courses. Portfolio Planning for Practitioners (PPP) is a practical workshop designed to improve advisers' skills in managing clients' investment portfolios given various objectives. It covers benchmarking, rebalancing, fund selection and reporting to clients. For those who wish to refresh their knowledge on the products and to develop portfolio management skills at the same time, IMA is soon to launch a new one-day course.
Details of the PPP workshop are available on IMA's website: www.investmentuk.org or by contact Maxine Flynn at: [email protected]g or 020 7831 0898. Details of the Savings and Investments qualification will soon be available on the CII's website: www.cii.co.uk
Victoria Nye, director of training and education at the IMA
Three years at Wells Fargo
Effective from 9 December 2019
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