Your IndustryMar 8 2012

Filling the gaps

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In order to properly explain the ramifications of gap-fill and its importance for many IFAs today, I need to hark back to the halcyon days when the retail distribution review was nothing more than a twinkle in the FSA’s eye.

In years to come I imagine that young advisers will discuss the pre-RDR world in the same tones of wonderment that those under 30 currently use to talk about the fact that there used to be only five – if not four – television channels. However, strange as it may seem to them, IFAs managed quite happily for many years with just their required Financial Planning Certificate parts one, two and three to allow them to advise and their annual continuing professional development top-ups.

When the FSA launched RDR with the high-level aim of helping consumers to have more understanding of, and confidence in, financial advice, services and products, the early discussion documents held some clues on what requirements IFAs might face regarding levels of qualification. The most notable, included in the professional financial planning and advisory service section of the discussion paper, added: “To improve the quality of advice, the industry is suggesting that higher professional standards are needed.”

In theory the majority of the IFAs I know would strongly agree with the aims of promoting better consumer understanding and improving the professionalism of our industry as a whole. We understood that this would mean changes to the level of qualification advisers would need to operate compliantly post-RDR but neither the June 2007 discussion document nor subsequent consultation documents were able to offer guidance on exactly which qualifications would be needed to meet the FSA’s new, higher standards.

It was, correctly, suspected by most that the increased level of necessary qualifications would mean a move from the current QCF level three – the FPC – to QCF level four, diploma status or higher. However the FSA had already stated that it would be unable to give exact details of the qualifications needed until 2010, causing consternation for many advisers. The fact that the qualifications were as yet unspecified caused an understandable ripple of fear through the adviser community. With no firm knowledge about the diploma requirements, many were anxious that the announcement of qualification specifics in 2010 would not leave them enough time to achieve all that they needed to before the deadline at the end of 2012, especially with an understandable rustiness in study and revision skills.

There are a couple of ways in which to identify your gap-fill requirements, the one you choose is dependent in your level of masochism

Before the FSA committed to exactly what qualifications would be acceptable post-RDR the regulator introduced a policy of ‘no regrets’, meaning that any qualifications taken at a higher level by advisers would count towards them reaching higher professional standards and would not be wasted. Any discrepancies between the learning objectives covered in the syllabus at that time and the FSA’s final summary of skill requirements could be filled at a later date with CPD. The exercise which many advisers are now undergoing to cover the discrepancies between the pre-2010 syllabi and the post-2010 FSA learning objectives is gap-filling – which brings us up to the present day.

Masochism

If you are one of the advisers affected, there are a couple of ways in which to identify your gap-fill requirements and the one you choose is dependent upon your level of masochism. The first method is purely for those who have a lot of time on their hands and a love of FSA-produced written material. It means going through the FSA guidebook to find the possible learning objectives on which there might be gaps to fill (around 109 of them) and cross-referencing them against the syllabi of the examinations you have taken. In all seriousness I would not recommend this as a viable option. It is true that you would get the ‘pure’ data, as opposed to a third party’s interpretation, but most of those third parties have worked with the FSA in order to ensure the details they hold are completely reliable.

In my opinion the best tool to identify your gap-fill needs is that of the Chartered Insurance Institute or the Personal Finance Society. It is available to members through the websites and can help you quickly and easily assess your knowledge gaps, as well as offering solutions on how to address them. However the majority of examination and accredited bodies offer something similar so if you have not yet found a gap-fill assessment tool, there are a number of them available so you can find the one which works best for you. Once you have identified the gaps you need to fill, there is an ever-increasing number of routes through which you can address them. Some of the gaps need more work to fill than others. For example, the area of ethics and regulation was missing in its entirety from the pre-2010 exam syllabi and therefore needs quite a lot of work to achieve all of the associated FSA learning objectives, whereas other, smaller, gaps may require you to just read a single document.

Appropriate

With a wealth of support material available to those who do have gap-fill requirements, again you need to find the method of addressing each gap which best suits the way in which you learn, and also the way which is most appropriate to the time frame within which you are working. You are likely to find each potential learning outcome covered in a number of ways through the sources mentioned above including, but not limited to, attending presentations, watching videos online, taking the relevant module of an exam and reading relevant material.

There are a few misunderstandings regarding how ‘structured’ and ‘unstructured’ CPD can be used for gap-fill. The most common is that courses or seminars are automatically structured, whereas reading material is not, but this is not the case. The label ‘structured’ means that the source of information has been independently accredited to match a specific, or a number of specific, FSA learning objectives. As opposed to ‘unstructured’ that could include reading the trade press or attending a conference where no test of the knowledge developed is carried out. I know it is common sense, but I always advise opting for structured CPD gap-fill material over unstructured when given a choice.

It may not always be the easier option but it does remove the danger of potentially having to return to a gap to bridge it again if the unstructured choice is deemed lacking for some reason.

The CII offers solutions for many of the gap-fill requirements through its online tool and most networks and service companies are helping their IFA members with at least some of the requirements. The New Model Business Academy, which is not for profit and free for anyone in the financial services sector to join, is offering a programme which covers all 109 potential outstanding learning objectives at one-day workshops, with subsequent access to an online gap-fill portal. Many providers are also offering gap-fill support, generally free of charge to the adviser community. JP Morgan in particular has some really high-quality material available, details of which you can find in the ‘adviser’ area of its website.

I completely empathise with those of you who think it is unfair that you embarked early on the journey to QCF level-four qualification and have ended up with a pretty large slice of gap-fill to complete as a result, but I urge you to get it done as soon as possible. I cannot imagine anything more frustrating than having completed all your exams in good time, only to fall at the last hurdle.

Gary Kershaw is group compliance director of SimplyBiz