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2007's sharp reversal of fortunes for commercial property funds moved from being the most popular segment of the investment market for almost three years, to one of restrictions on redemptions; appearing to take many advisers and investors by surprise.

Subsequent allegations of mis-selling by some investor groups have only served to question whether advisers really understand the risks and performance characteristics of the asset class. This has also restarted the debate about whether there is adequate adviser education around property and the need for formal qualifications for those who want to advise on property investment.

Since Ron Sandler's 2002 report highlighted the need for more investment education, significant developments have taken place to cover equities and fixed interest asset classes. To date however, only sporadic action has taken place in relation to property.

In this area the investment property forum started the ball rolling with the development of ApEx18, although this has primarily addressed the needs of investment advisers working within the property industry, rather than mainstream investment IFAs. A small number of IFAs have also taken IPF's investment education programme to bolster their specialist knowledge as part of their CPD requirements. And, recently, the Financial Services Skills Council has also reminded awarding bodies of the need to cover property adequately, but there is still a long way to go.

Putting it very simply, how can it be correct that the investment and risk module of one of the most popular investment qualifications has less than 10 pages of the course material devoted to property? And furthermore, of this content, more than 60 per cent is focused on buy-to-let.

Any advisers seeking to advance their understanding and potentially develop their business through a focus on property through qualifications, are likely to be disappointed. None of the major awarding bodies appears to offer either a specialist qualification or devote significant space in their exam syllabuses for property investment. If, as a rough rule of thumb, some 10-20 per cent of an investment portfolio is held in commercial property, it does not seem unreasonable to expect a significant amount of the content of an investment syllabus to be allocated to the asset class.

Does this mean that advisers do not understand commercial property investment? No, a qualification in investment requires an understanding of the performance of products available, particularly when allied to experience of past market reversals. However, this approach potentially misses out an awareness of some of the key aspects of the asset class and a number of the key steps in the decision making process.

A decision on which property investment product to recommend should be the result of a multi-step process, rather than the first step after identifying the client's investment objectives and risk appetite. In order to achieve the desired combination of diversification and target returns, it is important to have an understanding of property's distinct performance and risk characteristics as an asset class; the impact of local market knowledge of territory and sector, and the meaning of valuations for an essentially illiquid asset class. This is not a prescriptive list, but consideration of these factors, alongside technical analysis and experience, will ensure that all options are considered. This might provide advisers with a better defence than a belated action of pointing to the small print in providers' brochures.

Recent independent research conducted on behalf of Reita illustrates some of the limitations of current adviser education. In attempting to understand today's volatile property market, many would argue that an understanding or an awareness of the relationship between asset values and property share prices is important - if only because the pricing of shares is likely to indicate future movements in asset values.

In a question about how to interpret current significant discounts to net asset values, 51 per cent of investment advisers stated that they indicated a potentially attractive investment opportunity or likely future falls in property values, but 38 per cent of advisers 'did not feel qualified to make a comment'. The same research programmes have consistently indicated that between 60 per cent and 70 per cent of investment advisers would be interested in taking a formal qualification in property investment.

In order to identify the gaps in the current adviser knowledge, Reita set up an education steering group in 2007 to draw up a non-partisan target syllabus. The steering group was drawn from major fund managers, Real Estate Investment trusts, property companies and corporate advisers from across the industry. The object of the group was to document 'what advisers should know about property' and the summary results are shown in table 1. This syllabus is designed to build on and not duplicate existing qualifications - assuming that anyone looking to advise on property investment would already be able to advise on investment generally. Clearly there is a great deal of further information underpinning this syllabus and it is printed here for the purpose of simulating debate.

While it is relatively easy to agree what advisers should know, it is however a long way from the creation of a qualification, and even further from ensuring that the target audience has either access to the qualification or the inclination to take it. Current debates amongst awarding bodies about how to position education and qualifications, pending clarity on the outcomes of the retail distribution review, address key and practical issues. However it does not seem sensible to wait two or three more years before taking action to address pressing deficiencies. And in this context, the recent announcement by the CII of their extension of their diploma level investment paper to include property investment as an asset class is to be welcomed as a major first step.

But this is not the complete answer; even assuming that other awarding bodies follow the CII's lead, and every adviser has to achieve diploma level by 2012, this will fail to address that cohort of advisers who have either already achieved diploma status or will choose not to do so, but will continue to advise on property investment up to 2012. Another standalone solution is required for this group, perhaps a certificate level qualification in order to ensure that when the property investment market returns to favour, advisers are better equipped to deal with the overshoots and volatility of a new cycle than some appear to have been in the last.

With a number of commentators already calling the bottom of the market and highlighting the apparent bargains to be had, there is no time to lose in the development of property investment education and qualifications. Ideally they will be based on an industry-wide agreement as to 'what advisers need to know about property' and an industry-wide drive to encourage the take-up of qualifications.

Dave Butler is head of external affairs for Reita