As we continue moving towards the new financial services regulations being introduced at the end of next year, many advisers are working through a ‘gap filling’ exercise.
The Financial Services Authority (FSA) requires that all financial advisers who hold ‘transitional qualifications’ complete an exercise to bridge the knowledge gap between historic and modern exam standards.
As an IFA, I started completing my financial qualifications a little over ten years ago. At the time, this meant studying for and sitting three exams for the Financial Planning Certificate (FPC).
I then spent around five years passing advanced financial planning qualifications, leading eventually to the Chartered Financial Planner status in 2007.
When the new retail financial services regulations come into force at the end of 2012, prompted by the FSA Retail Distribution Review, the minimum qualification requirement is being increased from Level 3 to Level 4.
Level 3 qualifications are broadly equivalent to the Financial Planning Certificate which I completed back in 2001. Level 4 is equivalent to the current Diploma in Financial Planning, which I achieved in around 2003.
My current financial planning qualifications are equivalent to Level 6, with Chartered Financial Planner and Certified Financial Planner (CFP) status both reaching this Qualifications and Curriculum Framework level. However, the FSA has quite rightly pointed out that knowledge requirements change over time and exams passed years ago need to be updated in some cases.
All IFAs undertake an amount of recorded Continuing Professional Development (CPD) each year, to keep their knowledge and skills up to date. The gap filling exercise we are now all required to complete, unless we have passed the current set of financial planning exams in the past few months, is a formal set of this CPD, designed to ensure all of the knowledge gaps are filled.
There are 109 core learning points identified by the FSA which represent gaps between the knowledge tested with current minimum exam standards and the new Retail Distribution Review exam standards. These learning points cover four main areas – financial services, regulation and ethics; investment principles and risk; personal taxation; and pensions and retirement planning.
These are all areas where you would expect your Financial Planner to hold a high degree of relevant and current knowledge.
Whilst we have until the end of next year to complete this exercise, one of my personal development goals for this summer is to complete the gap filling exercise in its entirety and put myself in the position to apply for a Statement of Professional Standing from my professional body, the Chartered Insurance Institute (CII), once these become available.
With 91 out of the 109 core learning points now completed, this is a time-consuming yet important task and we are assisting all of the Financial Planners at Informed Choice with their individual gap filling exercises over the coming months.
Photo credit: Flickr/limaoscarjuliet
