The Institute of Financial Planning (IFP) has backed down in its fight against the Chartered Insurance Institute (CII) over the new Chartered Financial Planner title.
The news came following an IFP board meeting yesterday at the same time as the CII released the final details of its exam regime.
Nick Cann, chief executive of the IFP, says following the Financial Planning Standards Board’s (FPSB) meeting in Mumbai and their own discussions yesterday, the IFP has decided not to pursue judicial review despite its disappointment about the title of Chartered Financial Planner and the board’s belief and legal opinion that the process with the Privy Council had not been properly followed.
Cann says: “It was decided that this would not be the most constructive way forward. It will be better to use our resources to find creative solutions to benefit the consumer and the financial planning community.”
Steve Radford, public relations manager at the CII, says the announcement is good news, but adds: “It would help if there was some clarity to their decision”.
Radford says the action was always a matter for the IFP alone and as far as the CII is concerned it has done everything it should have done.
Moments prior to the IFP’s announcement, John Ellis, group public affairs director at the CII, said the IFP was fighting a “one-sided war” over the new Chartered Financial Planner status which it had “no chance of winning”.
Ellis says he was “surprised” by the comments Ian Shipway, president of the IFP, made recently about the new chartered status because they “didn’t fit with the standing we have had with them”.
The CII has worked with the IFP for many years and its doors are always open to comments, claims Ellis. He says the CII consulted with the IFP over the new chartered status even though it had no obligation to do so and the IFP’s reaction has been “just one of those things”.
Ellis said he did not think the IFP was doing itself any favours by threatening legal action because the chartered status has had a lot of support from people in the industry. He says: “If they take legal action they won’t endear themselves to people, including some of their members.”
Moreover, Ellis says the IFP’s argument had no grounding because the Privy Council had ruled that the Chartered Financial Planner title must not be abbreviated. The Privy Council’s decision means there is no issue of a trademark clash with the IFP’s Certified Financial Planner (CFP) label and the argument was “just a competitive issue".
Ellis says the CII will fully enforce the Privy Council’s decision, adding: “Why would advisers want to shorten the power in the ‘chartered’ title anyway?”
The CII says it is not going to change the title and it has now released the full details of the exam regime which Radford describes as a “phased development” towards chartered status.
The first tier of the exam regime is the Certificate in Financial Planning, which was introduced this year to replace the Financial Planning Certificate (FPC) and has had 21,500 entries to date. The Certificate is comprised of five units with optional papers on pensions and mortgages. Candidates completing the Certificate are awarded 70 credits.
The new Diploma level is the second tier of the regime and will comprise seven modular units, each attracting 20 credits: personal tax; trusts; the tax and legal aspects of business; pension funding options; pension income options; investment principles, markets and environment; and supervision in a regulated environment.
A total of 140 credits is required to achieve Diploma level and holders of the qualification will be entitled as members of the Personal Finance Society (PFS)to apply for the designation DipPFS. The first examinations will be held in April 2006.
The two higher Advanced Financial Planner Certificate (AFPC) completion levels – Associate and Fellow, leading to APFS and FPFS – will continue in their current form in 2006 with a choice of six units, each attracting 30 credits. A total of 230 credits is required to achieve APFS and 300 credits to achieve Fellowship (FPFS).
The last AFPC exams will be held in October 2006 and after that date the AFPC will be replaced by the Advanced Diploma in Financial Planning, which requires a total of 290 credits.
The Advanced Diploma is likely to be composed of four compulsory units, each worth 30 credits: personal taxation and trust planning; business financial planning; investment planning; and retirement planning solutions. Holders of the Advanced Diploma will be entitled to apply for the Chartered Financial Planner designation, subject to meeting other qualification criteria.
In order to be awarded the Chartered Financial Planner title, an individual must:
The CII will also introduce a Fellowship programme in 2007, which is intended to move from an examination-based approach to a scheme based on: a major achievement; a specified minimum period of CPD; participation in a Business Ethics Programme.
Radford says the PFS will send learning statements to its members at the end of the month detailing the qualifications they hold and inviting those who meet the appropriate standard to apply for chartered status, which currently stands at 700 advisers.
Radford hopes the new status will put financial advice “on a par with other professions”, help advisers to build client confidence and encourage more graduates to apply for the profession.
Likewise, Ellis says: “People need to improve the reputation of financial advisers and they can do this by demonstrating they have the knowledge to do the job. The exams are one way they can do this.”
He adds: “The public expects more. The future lies in more knowledge and more professional standards.”
The PFS will explain the new standards to consumers next year through information on the internet, leaflets it gives to its members and the personal finance press.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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