In my blog last month I tried to brew up a storm with my suggestion that neither the public nor the regulator understood the difference between independent financial advice and independent financial sales.
This is really important debate for two reasons. Firstly, consumers often have an expectation of independent financial advice when they go for independent financial sales. Secondly, the way each of these should be regulated needs to be quite different.
For some reason, independent product salespeople get quite defensive when you suggest that they are not really independent financial advisers. I wasn’t saying that there was anything wrong with this model but there are clear differences between the two.
And this month I want to be controversial again.
Why do so many IFAs shy away from taking exams and improving their professional qualifications? It is a sorry story to see so many so called professional advisers out there working with private clients within the IFA sector but with only basic financial qualifications. It is widely accepted that the entry level exams represent, at best, only basic proof of competence.
One of the most common excuses I hear thrown around on this subject is that ‘I’m too old to study’. Great excuse! Convention tells us that age brings wisdom. With wisdom (and presumably experience) the need for professional development appears to go out of the window. But how many clients would feel comfortable if they really understood that their adviser had the professional standing of a college leaver?
IFAs need to do two main things if we are to be taken seriously and held in the same standing as solicitors and accountants.
Firstly, we need to stop being salespeople. If you are remunerated for product sales then you will never be able to call yourself a professional;
Secondly, we need to work hard to gain equivalent professional qualifications. This means lots of study and lots of exams.
The choice available to an IFA in terms of study routes these days is massive. Because of the ‘credits’ system that the CII now use it is possible to follow the ladder up to diploma, associate or chartered status with a ‘mix and match’ approach to qualifications. This should also remove the other common excuse for not taking exams; that the CII exams are expensive and they hold a monopoly on issuing these qualifications – rubbish!
This week my dad, at the ripe old age of 51, has been busy completing his 10,000 word dissertation so he will be awarded a degree in financial services. Nick didn’t have the opportunity to go to university when he was younger, so through the wonders of distance learning (and a lot of hard work!) he is joining an ever-increasing number of people who have discovered higher education later in life.
As an IFA, you have to buy into the principle of lifetime learning. Professional development doesn’t stop just because you reach 40, 50 or 60 years old. It needs to be an integral part of the weekly activity for an IFA. Excuses like age and lack of time to study are excuses which miss the bigger picture.
Have your say: Jeremy Ventham at Lawrence Clarke, says:
In April this year I sat and passed CF8 exactly one week before my 64th birthday.
Now the nights are drawing in, I must think seriously about next year's exam choice.
In response: Martin Bamford says:
Thank you for your comments and congratulations on your recent exam success!
These long dark winter evenings are a great excuse to study and with our first baby on the way later this month I'm sure I've got plenty of late night/early morning study sessions coming up!
Martin Bamford is director of Informed Choice.
The views expressed are those of the author and not those of the company he represents.IFAonline
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