Adviser firms now have to adhere to conduct and culture standards as part of their corporate chartered status, Steve Jenkins, the Chartered Insurance Institute’s director of financial services, has announced.
He said: “Post-RDR there is more confidence in the marketplace, and increased customer scrutiny, and clients’ needs are more complex. The role is as important as ever and expectations higher, so it is natural to focus on increased requirements.”
The rules, which came in after an 18-month consultation with a range of stakeholders, require firms to keep up with changing regulations on risk.
Mr Jenkins said: “We are looking for firms to demonstrate how an ethical culture is promoted – their approach to diversity, how customer satisfaction is measured and used to improve services, and how it develops the careers of staff.”
The CII also announced that by July 2017 at least a quarter of advisers at a chartered firm must hold chartered status, rising to half by January 2020.
Currently they must have at least one chartered financial planner on their boards, as well as a points-based system in place to rate adviser’s qualifications. Further, 90 per cent of client-facing staff must be CII or Personal Finance Society members.
Mr Jenkins said that chartered status was recognised by customers as the ‘gold standard’, and that it was well worth going to the extra effort of strengthening the requirement. “Chartered status is a responsibility as well as a benefit,” he said. “It strengthens the brand proposition and relationship with the community, on a par with other established professions. What is good for the customer will be good for business, so it is a long-term investment.”
Tony Larkins, managing director of Cambridgeshire-based Beacon Wealth Management, said: “It is important to raise criteria of the chartered status. It needs to be on a par with accountants and solicitors, and should be the ultimate aim of firms. To get it into the mindset of people we need to recognise that we are highly qualified, we add value, and it is going to cost.”