First check the adviser - Money - The Independent

First check the adviser

From 1 July, new laws will protect the public. In the meantime, Michael Drewett has advice

As the regulators press on with cleaning up the financial services industry, advisers are taking examinations in droves, and new qualifications are being dished out by the skip load.

Unfortunately, the general public - whose interests this furious activity is supposed to protect - have little idea what all those pips on shoulders really mean.

Come July 1997, anyone giving advice of any kind on investments, or investment-related products such as endowment and most insurance policies, must have a "benchmark" level of technical expertise.

In most cases this will be the three basic stages of the Financial Planning Certificate, or FPC. The FPC syllabus and examinations come through the Chartered Insurance Institute (CII). But not having an FPC3 qualification is all right as long as an adviser holds CeFA, the Certificate for Financial Advisers, run by the Chartered Institute of Bankers, the Initial Test of Competence (ITC) from the Institute of Chartered Accountants, or IAC, the Investment Advice Certificate, from the Securities Institute.

Will Hastings, at the Personal Investment Authority (PIA), the industry's regulator, says: "There will be no amnesty or `grandfathering' [exemptions for those over a certain age, or who have spent a set number of years in the industry]. If you have not qualified by 1 July you cannot give advice; simple as that."

Today's tough regime is a far cry from the days when any salesman who could walk and talk could go out and sell. The aim is to avoid repeating the scandals of the past.

A recent NOP survey found that nine out of 10 people want specific advice before buying a pension or investment product. So what level of expertise should anyone expect from a financial adviser?

Kate Gill, chief executive of the Institute of Financial Planning, says: "First of all, the public needs to judge when particular expertise is necessary, or just an optional extra. For example, it would be ridiculous for a self-employed man to hire City accountants like KPMG to help him put pounds 20 a month into a personal pension scheme." But, if you want to set up a self-administered company pension scheme, things are very different.

Basic examinations do not equal comprehensive expertise. But more knowledge does serve to highlight to advisers when they are out of their depth. A good example is the potential bankruptcy of a client - very few insurance or investment advisers should be dealing with it, but, if they can at least recognise the signs, the case can swiftly be passed on to a specialist in insolvency.

The basic FPC (or one of its three equivalents) qualifies an adviser to "conduct a fact-find, and, in the light of information collected, assess the client's needs and recommend appropriate financial products to meet them". Passing the mandatory exams confers a certain expertise upon advisers, but they do not get any letters after their name unless they belong to a body such as the Life Insurance Association. Passing FPC3 entitles a member to use the suffix MLIA(Dip). The "(Dip)" is important, as it signifies success by examination. Without it, the letters mean little more than payment of a subscription.

To earn the right to call oneself a member of the Society of Financial Advisers (MSFA), or an associate of the LIA, an adviser needs to pass more highbrow papers under the Advanced Financial Planning Certificate.

How enthusiastic insurance salesmen will be to have the letters ALIA after their names remains to be seen, but the Chartered Insurance Institute believes advisers will warm to the new culture. In time, the goal is to create a true "chartered" title.

Steve Radford, a CII spokesman, says: "The designation of `advanced' says to the customer that this person is committed to a professional career rather than being just a journeyman adviser."

Top of the financial advice tree are the 60 or so Fellows of the Institute of Financial Planning (FIFP) - often accountants - who are qualified to deal with the most rarefied financial subjects. IFP members charge a fee rather than being paid by commission.

For most of us, who just want to buy a Pep or insure ourselves against a heart attack, the biggest problem is finding a good basic independent adviser at all. IFA Promotions, which promotes independent financial advice, runs a hot line (0117 971 1177) to provide a selection of IFAs where you live or work.

The Money Management Register (0117-976 9444) concentrates on those who charge fees rather than take commissions.

Especially until the end of June, the advice is to ask any prospective adviser to prove what levels of qualification he or she has achieved before transacting any businessn

News
Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
Sport
FootballFull debuts don't come much more stylish than those on show here
News
i100
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
Travel
travel
News
The ecological reconstruction of Ikrandraco avatar is shown in this illustration courtesy of Chuang Zhao. Scientists on September 11, 2014 announced the discovery of fossils in China of a type of flying reptile called a pterosaur that lived 120 millions years ago and so closely resembled those creatures from the 2009 film, Avatar that they named it after them.
SCIENCE
Life and Style
tech
Arts and Entertainment
Matisse: The Cut-Outs exhibition attracted 562,000 visitors to the Tate Modern from April to September
art
Life and Style
Models walk the runway at the Tom Ford show during London Fashion Week Spring Summer 2015
fashionLondon Fashion Week 2014
News
Kenny G
news
News
peopleThe black actress has claimed police mistook her for a prostitute when she kissed her white husband
Life and Style
techIndian model comes with cricket scores baked in
Finacial products from our partners
Property search

Leaving money to charity in your will could help reduce the tax bill for your loved ones

Next week has been designated "remember a charity in your will week", to put the focus squarely on the subject

Two million first-time buyers are locked out

The drought in lending to people with low deposits has created legions of frustrated buyers, writes Emma Lunn
Money is slipping through our fingers: the UK is falling behind other countries in the amount we put away

How to save money: UK is crashing down the European league table for putting money away

The UK has slipped to 11th in the latest European league table of savers. Rob Griffin checks out the best options

Energy firms found guilty of bad practice could have licences revoked under Labour government

Caroline Flint, the shadow energy secretary, says a Labour government would create a new energy regulator

A student's guide to financial survival: You don't have to drown in debt at university

Fresh from A-level delight, the moment does not have to be soured by students resigning themselves to thousands of pounds worth of debt in three years' time. Rob Griffin sees how to pass the university challenge

'Dismal' eurozone data sparks concerns

European Central Bank chief Mario Draghi is under pressure to launch promised stimulus before the EU slides further
Love but not marriage: property is one area where cohabiting couples are in danger of losing out

How couples can protect their financial interests when cohabiting

People who simply live together cannot assume they have the same rights to each other's assets as spouses or civil partners. Michelle McGagh sees how they can protect their financial interests

India could be jewel in the crown for investors

With a new government and an ambitious prime minister, the country offers the prospect of strong returns. But there may be hiccups ahead, warns Simon Read
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

    £280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Senior BA - Insurance **URGENT**

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Training Coordinator / Resource Planner - City, London

    £35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...

    Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

    £400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

    Day In a Page

    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week