Is your financial adviser lying about his qualifications?
Is your financial adviser lying about his or her qualifications? A new study by Which? Money gives us pause for thought.
When choosing a financial adviser, you need to be confident they are well qualified, along with some other important factors.
Financial adviser qualifications became even more relevant at the end of 2012, when new regulations (the Retail Distribution Review) came into force.
These new rules increased the minimum qualification level for advisers, from QCF Level 3 to QCF Level 4, equivalent to a Diploma level qualification.
With this increase in minimum qualification levels, many advisers took steps to obtain even higher level qualifications, to become a Chartered Financial Planner, Chartered Wealth Manager or equivalent.
Because financial planning often requires specialist knowledge to deal with more complex advice areas, some advisers have also gone to the effort of obtaining specialist qualifications and accreditations.
As someone who has personally invested hundreds of hours of my time in advanced financial planning qualifications, so I can demonstrate the required competence to advise our clients, it was really disappointing to read the results of a new investigation by Which? Money.
The investigation discovered financial advisers featured on online comparison services used by consumers could be misleading the public about their credentials.
The publisher took a look at 43 different advice firms who had a listing on a popular consumer comparison service, unbiased.co.uk.
The firms they looked at claimed to employ Certified Financial Planners (CFPs); individual advisers who hold an advanced qualification from the Chartered Institute of Securities & Investment (CISI).
Which? Money discovered that 27 firms (63% of those surveyed) did not employ any CFP holders.
They also found that seven out of 24 firms investigated made false claims about having advisers accredited by the Society of Later Life Advisers (SOLLA).
I was especially disappointed to learn about these false claims, as SOLLA accredited later life advisers are often dealing with the most vulnerable in society.
As an adviser who has personally been through the SOLLA accreditation process to become an Accredited Later Life Adviser, I can attest to its toughness; at the time of my face-to-face assessment, I commented it was one of the most stringent tests I had been through in my career to date.
14 out of 72 firms falsely claimed to have advisers who were a Chartered Finanical Planner.
With Chartered status representing the pinnacle of professional qualifications, it’s a real shame to see some advisers misrepresenting their level of competence here too.
Which? Money discovered similar false claims from firms listed on other consumer comparison sites, specifically VouchedFor and the Money Advice Service’s Retirement Adviser Directory, which suggests the issue isn’t limited to one directory.
So what steps can you take to make sure your adviser isn’t lying about his or her qualifications?
One important step when searching for an adviser is to cross-reference anything you find about them on a consumer directory with the professional body in question.
-Check with the Chartered Insurance Institute to make sure the adviser is really a Chartered Financial Planner, Fellow of the Personal Finance Society (FPFS), Associate of the Personal Finance Society (APFS) or even actually holds the Diploma in Financial Planning (DipPFS).
-Also check with the Chartered Insurance Institute to make sure the firm you are dealing with is really a firm of Chartered Financial Planners (corporate Chartered status).
-Check with the Chartered Institute of Securities & Investment (CISI) to make sure the adviser is really a Chartered Wealth Manager and/or a Certified Financial Planner (CFP) professional.
-Check with the Society of Later Life Advisers (SOLLA) to make sure the adviser is really an Accredited Later Life Adviser.
Part of your due diligence when choosing a financial adviser should be to ask for copies of their qualification and accreditation certificates. No adviser will take offence to this simple request.
If you do find an adviser who is misrepresenting their qualifications or accreditation on a consumer directory, please do report it to the directory and to the relevant professional body.