Chartered Insurance Institute  

Raising the bar or pushing too far?

Raising the bar or pushing too far?

After years of relative calm, adviser qualifications could be set for another shake-up. 

The Chartered Institute for Securities and Investment, which has 45,000 members in 111 countries, recently announced that it would be raising its certified financial planner qualification criteria from level six to level seven. In academic terms, this is the equivalent of studying for a masters instead of a bachelor’s degree.

Most UK intermediaries still favour the qualification route offered by one of the CISI’s rivals – the Chartered Insurance Institute. Nonetheless, the move marks the first significant rejig of adviser qualifications since the RDR came into force in 2013. Some exams have been tinkered with, and new ones introduced, but the necessary requirements to reach chartered status have largely remained untouched.

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As things stand, the change will have no impact on the minimum qualification standard for intermediaries to give advice, which is currently the level four diploma. But it has reignited the debate as to whether chartered should be set as the minimum standard.

Rob Handford, chartered financial planner at Hunter, Aitkenhead & Walker, feels that many could benefit from such a move.“The level of knowledge needed to pass the advanced diploma papers is no more than that needed to do the job. And when you get complex client scenarios, you are going well past that level in practice,” he says. 

“Studying for the exams really focuses your understanding, improves your application of knowledge, and generally sharpens your mind. I have never sat an exam and not learned something new, even after 30 years.”

In any case, the number of chartered financial planners is rising. Keith Richards, chief executive at the Personal Finance Society, says that more than 6,600 PFS members are chartered, with a further 8,000 at least working their way towards the status. Therefore, he believes that enforcing this as a minimum standard is unnecessary.

“The sector is doing a good job on its own, with many at diploma level also holding advanced qualification units where they have seen it appropriate to enhance the performance of their role,” Mr Richards says.

“Over the past year, there has also been a noticeable increase in new talent [seeing] the sector as a first career of choice. There is little doubt that chartered status has played a key role in changing perception, as it is aligned to other chartered professionals such as accountants and surveyors. Consumers are being well served by the profession at all levels, and many [advisers] already use the diploma as the minimum, rather than maximum level.”

Whether the CII will follow the CISI’s lead and bump up its chartered requirement to level seven is unclear. Mr Richards feels that changes to the CII’s current syllabus are not required.

“The advice profession has continued to voluntarily raise its technical knowledge through a combination of qualifications and relevant CPD,” he says.