Profession needs individual practitioners, not servants of firms

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Profession needs individual practitioners, not servants of firms

Sadly the Financial Conduct Authority has, once again, got it wrong and the backwards thinking, as with so many things, began with the Retail Distribution Review not properly considering the financial planning industry as a profession, which has led to much confusion over the years.

My stridency is not merely because I am an opinionated centrist, but because I have, for nearly the past three years, been quantitatively studying the concept of professionalisation for my PhD – and I am hopefully submitting it soon, then on to viva voce.

Suffice it to say, I have examined many millions of words of academic papers, regulation, and legislation, and have broadly come to the conclusion that the then FSA was taking us towards becoming a profession, and RDR was a step in the right direction.

However, it has additionally led to diminution of the small local practice, and the rise of the national corporate, which my research suggests leads to a reduction in the trust placed in a profession.

This is intuitive, though, dear reader, we all know people buy people, they don't buy brightly coloured brands and snazzy logos – in general.

In 2012 it would have been much better to move to individual regulation.

Additionally, we had the SMCR, which removed the concept of individual registration with the FCA.

This introduced firms being responsible for issuing practising certificates, in combination with SPS providers certifying that an individual has done the CPD they are required to do.

Now, Nikhil Rathi, the latest chief executive, has a bit of a mountain to climb, as the large companies have moved in to dominate the lobbying space in the FCA, and three of those large companies (the CISI, CII and Chartered Banker Institute) have recently joined forces to create the 'chartered body alliance' – and they are the SPS providers.

These are properly called 'accredited bodies' and you can read all about how they are supposed to operate in the handbook.

In my opinion, in 2012 it would have been much better to move to individual regulation. This would be where the financial services register becomes a register of individual advisers, and the firms they work for take second fiddle to the individual registration.

The individuals would have recorded CPD directly with the FCA and the FCA themselves would have issued the practising certificates.

This was where the FCA went wrong, and continues to do so; it continues to devolve its responsibility to other parties.

The CII's failure to manage conflict appropriately may lead to a lack of trainees over the next year.