OpinionJan 15 2014

Advisers need the right qualifications

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Jeff Prestridge has been a true champion and friend to IFAs for as long as I have been in the business (we must both be getting old). He has encouraged and cheered us on countless occasions.

However on this occasion (and uniquely) I think he is a bit off target in his column about personal financial advice (FA, Real world value, 9 January).

First, RDR was not a ‘cliff face’ for qualifications. They have existed for 25 years. They were there for you to gain knowledge in an impartial way, rather than be spoon-fed by the life offices which invariably used us cynically to flog their (often indifferent) wares.

That many did not bother to hone their knowledge before being forced to do so is a sad reflection. Can people become proficient without learning and studying? There are too many instances of unqualified advisers not really knowing what they are doing – as personable as they may be. That does not mean to say that a whippersnapper with a qualification should be let loose advising clients. Other things in addition to qualifications are just as important. I contend you need both. A very experienced older adviser without qualifications, but who has never done anything but financial services, is just as dangerous as a well-qualified youngster with no experience.

That commission has been abolished is also no bad thing. If nothing else it loosens the bonds of the providers. There are still commission-paying products and the industry has learnt nothing from RDR. Why else would commission disclosure appear on page 17 of a 19-page document?

Commission bias was not necessarily the point as far as product selection was concerned. It just encouraged people to flog a product come what may. The less well-off were nailed to the carpet and flogged to – whether they wanted it or not. It was ‘for their own good’. What the consistency rates were is an entirely different matter.

Fee charging ensures that the client is engaged and actually wants the advice and maybe the product too.

I just thought I would put the other point of view.

Harry Katz

Principal

Norwest Consultants

Middlesex