But what prompted the U-turn and why was the pilot controversial?
The CII had been working with St James’s Place to launch a level six inclusive financial planning unit tailored to advisers working with vulnerable clients, with the intention of launching it to the wider market after two years.
But in mid-September the CII confirmed it would now be opening the pilot to the wider membership in response to adviser backlash at the prospects of it being exclusive to SJP.
Anything to do with SJP attracts controversy, particularly given the recent news stories about them Jeannie Boyle, EQ InvestorsA spokesperson for the CII says: “We fully understand the initial reaction and criticism regarding this unit being positioned as exclusive to SJP when in fact it was the launch of a pilot with the CII working in collaboration with SJP.”
The spokesperson adds: “Other coursework-based units are £465, but this is a pilot unit, so £350 will be charged with the aim of accelerating the completion of the testing period to make sure this unit is widely available to all CII members as soon as possible.”
Pilot unit
The CII says SJP invested into developing the pilot unit, but the CII declined to disclose the size of the investment.
The pilot unit is intended to help financial advisers reach their chartered status.
But has the industry supported the opening of the unit?
Key Points
• The CII recently backed down over the launch of a exclusive pilot qualification with SJP.
• Advisers responded strongly to the news.
• Vulnerability is becoming a big issue for financial advisers.
Most advisers have welcomed the CII’s decision to launch the unit, but noted they found the initial exclusivity to be unfair.
David Bebb, chartered financial planner at Pannells Financial Planning, says: “I fully support the decision. I can only see it as a positive to open this unit for the wider adviser community, ultimately to help raise standards across the profession instead of within just one business.”
Sesame Bankhall Group recently developed an apprenticeship scheme in collaboration with Simply Academy, also welcomed the move.
“It is good to see the CII broadening its approach with the development and roll-out of its new qualification,” says a Sesame Bankhall spokesperson.
“Demand for further knowledge on the effective support of vulnerable customers is high-up on advisers’ agenda. This is something we are also responding to by increasing the support available for advisers through our training and development programme.”
But the launch raised the question whether an institution such as the CII should be developing an exclusive qualification with an advice company in the first place.
The Chartered Institute for Securities and Investments says it does not offer exclusive exam deals with anyone.
A CISI spokesperson says: “Sometimes we might be commissioned by a regulator to develop qualifications that are then freely and widely open to all to sit.
“In every case we have an exam panel comprising a wide variety of individuals and specialists in that particular field, who help develop the syllabus.
“Our policy is that qualifications are best developed with various interested parties to be most effective in the marketplace, but should be open to all.”
Controversy
When the news of the pilot unit emerged, as first reported on FTAdviser, it prompted a big reaction from other financial advisers, especially after details about SJP’s fees hit headlines.
Julia Kirkland, senior partner at Financial Services Training Partners, says that the initial decision to grant SJP a two-year exclusivity deal is likely to have stoked additional controversy due to SJP’s fee structure.
“They are a significant player in the market, and despite Mifid II [there are questions about] their pricing structure.”
Ms Kirkland adds that despite the introduction of Mifid II, there is a general lack of transparency on fees in the sector.
Research in July conducted by Candid Financial Advice showed that an investor who would have invested £1m over a 20-year horizon would have incurred almost £1m fees for SJP.
Responding to the comments and to the research, a spokesperson for SJP said: “Independent research shows that [SJP] has competitive fees compared to other fully advised wealth management services in the UK.
“There were fundamental flaws in the analysis carried out by Candid Financial Advice, which can only serve to mislead consumers.”
The spokesperson added: “There is of course no link between the Candid analysis and SJP’s commitment to professional development, which is highlighted by the SJP Academy and our community of over 860 chartered planners.”
Jeannie Boyle, chartered financial planner at EQ Investors, says: “Anything to do with SJP attracts controversy, particularly given the recent news stories about them.
“But more broadly, anyone paying fees to the CII should be given equal access to opportunities.”
But not all advisers share the view that granting SJP exclusivity, if implemented, is unjust.
Martin Bamford, chartered financial planner at Informed Choice, says any qualification that will help raise standards, particularly around vulnerable clients, is a good thing.
He adds: “Whether that is exclusive to small set of advisers or open to everyone is still raising standards.
“It is very easy to bash SJP, they are a salesforce and have a lot of high charges. That criticism is fair but should not prevent them from upping their skills.”
Mr Bamford adds that it is natural that SJP or any other adviser would want exclusivity if they had invested in developing a pilot unit in the way SJP has for this pilot unit.
Vulnerable clients
The pilot unit is assessment-based and worth 30 Advanced Diploma Credits. It is aimed at helping advisers better serve vulnerable clients.
An industry survey published by Just Group in February showed that while up to 50 per cent of clients could be potentially vulnerable in the UK, companies are only able to identify around 5 per cent of them or less.
The Financial Conduct Authority defines a vulnerable person as being “someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”.
Mr Bamford says: “Vulnerable clients is a worldwide issue, most important is the ability to identify them to know what steps need to be taken to protect them.”
A spokesperson for the CII says: “The [FCA] requires financial advisers to take care to ensure that vulnerable consumers are treated fairly as they may be more likely to experience harm.”
Mr Bebb points out vulnerable clients are not the issue themselves, the issue is rather that advisers can often struggle to identify them.
He says: “Vulnerability is not always visible, so identifying a client’s circumstances and exploring various topics with the client will go some way to handling issues of vulnerability.
“Hopefully the CII unit on this area will help those in the profession and potentially highlight issues they may not have considered previously.”
The pilot unit is will now be made available to all advisers.
Saloni Sardana is a features writer at FTAdviser.com and Financial Adviser
