Opening up the seal of approval

Last month I promised to discuss the international standard for Personal Financial Planning, BSi ISO 22222.

Many readers will have already come across the name ISO 22222 as it is being frequently described as a possible alternative to examinations for those IFAs who wish to be 'advisers' in the new post-retail distribution review world. But as with most things in life, it is not that simple.

First let us take a look at the history of the ISO and I will then explain what it is and how it may be used.

Back in 2000, the international standards community invited all interested countries to participate in the development of a new standard in financial planning. The UK’s national standards body is the British Standards Institute. Most of you will be familiar with its kitemark that appears on electrical appliances or the ISO 9000 series that applies to businesses.

Although some countries relied on one or two professional bodies - often affiliates of the CFP Board of standards - for support and guidance, in the UK the British Standards Institute, under the guidance and chairmanship of the FSA, formed a specialist committee, the SV6 Committee, that included all the relevant trade and professional bodies. This included the Association of IFAs, the Chartered Insurance Institute, the Institute of Chartered Accountants in England and Wales, the Institute of Financial Planning, the ifs school of finance and the Securities & Investment Institute and a number of consumer representatives, including Which?.

What was remarkable was how united the SV6 Committee was, and indeed remains. This meant the UK was able to lead much of the international debate on the development of the financial planning standard. One of the earliest decisions taken was to set the new ISO as a standard for individuals and not firms.

From 2000 to the end of 2005, the standard was developed. But as part of the quality control, for consumer protection, it was decided that where possible the standard should only be assessed and awarded by assessment bodies that had themselves met a stringent standard, ISO 17024.

In 2006 and 2007, the committee then developed UK guidance BS 9222 to facilitate the use of ISO 22222 and to encourage assessment bodies to apply for ISO 17024. So far two assessment bodies are in the process of securing ISO 17024 - the CII and Standards International - plus the Institute of Financial Planning has stated its intention to apply for ISO 17024 at a later date.

So although ISO 22222 exists, only a few individual advisers and planners have so far been involved with either the CII or Standards International pilots. I expect that when these two bodies gain their ISO 17024 credentials the number of advisers taking ISO 22222 will increase dramatically. I have two reason for saying this