IFAs: CII SPS policies a ‘rip off’
With less than seven months until the retail distribution review comes into force, questions are still being raised over the way the CII issues statements of professional standing and why it does not recognise university economic degrees of more than 10 years old towards chartered status.
Mark Shubrook, IFA for Norwich-based Premier IFA, voiced anger at being forced to join the CII in order to get his SPS.
He said: “After spending countless hours and passing level four it turns out I have to join the CII and remain a member to receive the SPS. Having spent hundreds of pounds on study text and exam fees I now have to pay more than £200 a year membership. What a rip off. It just about sums up this industry really.”
Gill Cardy, managing director of IFA Centre, said it was a “commercial decision” to award an SPS to members or non-members, but added: “If everybody took the view of the CII, it would become a cartel, raising free market issues. That would be a serious competition issue and then the FSA would get involved.
Fay Goddard, chief executive of the Personal Finance Society, insisted advisers were not being forced to join the CII.
She said: “Advisers who have done our exams have every right to go to another accredited body, which does not require membership, to get an SPS.
“Every accredited body needs proper systems and controls. All of our members have to do CPD and sign up to code of ethics. We would not issue an SPS when we have no control or way of dealing with a breach of behaviour.
“I can understand the issue of compulsory membership through the back door, but this is a CII board decision.”
Other bodies, such as the Institute of Financial Services School of Finance, offer SPS to non-members. In the case of IFS School of Finance, the fee is £75 for non-members.
The Institute of Financial Planning is only offering the SPS to members.
A spokesman for the FSA said: “We do not see this as too much of a problem because the option still remains for an IFA to go somewhere else if he only wants to pay the fee for processing an SPS. The market is competitive and the adviser has a wide spectrum to choose from.”
Last year Financial Adviser reported concerns that the SPS process was bringing in compulsory membership of accredited bodies through the back door, an aspect of the Edinburgh Declaration signed by the main accredited bodies in 2008, but later rejected by the FSA.
Meanwhile, the CII’s policy on prior learning for chartered status has also come further under the spotlight after an adviser threatened to take legal action over its refusal to recognise his academic qualifications.
Richard Kafton, managing director of London-based Cedar House Financial Services, said the CII had informed him that his BSc in Economics from the University College London, attained in 1978 would not count towards a chartered status application as it was not achieved during the past 10 years. He wrote to the CII last month after claiming the Equality and Human Rights Commission indicated to him that this rule potentially breached equalities legislation.