It is all too tempting to breathe a sigh of relief now the 31 Dec deadline has passed. The implementation date of the Retail Distribution Review has been and gone and you are (just about) still standing.
But the RDR was never designed to be a flash in the pan. A large part of its remit is to ensure ongoing professionalism in financial services, and the FSA has designated eight accredited bodies to help advisers attain and maintain professional standards.
While it is down to each individual firm to ensure its advisers can prove they meet required standards under RDR, this evidence comes in the form of a statement of professional standing (SPS) and only an accredited body can issue one.
After receiving their first SPS, advisers will need to have it renewed each year, and that renewal will come only if they satisfy certain continuing professional development (CPD) criteria.
CPD can involve courses, lectures, seminars or workshops, but each event must be properly documented, which is an area where accredited bodies can help.
So out of the eight accredited bodies (see box), which is the right one for each company and its advisers? The full list contains a number of bodies that are less relevant for investment-focused advisers and wealth managers. This article looks at the four most likely to suit businesses and to provide the best peer support.
Ruth Martin, managing director of the Chartered Institute for Securities and Investment, says CISI has always had a holistic approach to maintaining skills, ethics and integrity and that RDR is “very much aligned with what we already stood for”.
She considers the CISI to be the “accredited body of choice for people of the wealth management part of the adviser community” and believes it is not competing head to head with other accredited bodies because it has always tried to appeal to the “wealth management niche”.
Formed in 1992 by London Stock Exchange members, CISI has 40,000 members worldwide. The number of those who identify themselves as retail investment advisers is 6,422 and the number of SPS applications (read RDR-ready applications) received as of 15 Nov, 2012, was 5,240.
As a rule Martin says CISI does not comment on or criticise other bodies as it “does no good”. Indeed, she says she will refer advisers to other accredited bodies if she thinks they will provide more suitable CPD – for example if an IFA focuses mainly on pensions or retirement planning.
“When advisers are looking to join an accredited body it is very important to choose one that they feel will give them really good value in terms of CPD. RDR heralds for the first time a focus on maintaining competence.”
To make CPD easier for members CISI has an online logging system and any seminars or events put on by the organisation are automatically included; an adviser or their firm can also log external events. Advisers living in regional areas can also tick off CPD hours by taking part in webinars and webcasts.
Membership fees: £120pa for qualified associates, £160pa for fellows, additional £35 for SPS and £20 for renewals.
Steve Jenkins, director of financial services and insurance markets at the Chartered Insurance Institute, says that he can think of only one accredited body advisers might want to join – CII. But he adds that advisers should not start their selection process on the basis of where they can get their SPS the easiest.
“Think about which one best serves your needs. One of those needs is obtaining your SPS, but that should be an element rather than the sole driver of your choice.
“Look at various options and work out what service and membership experience you would receive from each of the groups.”
CII has just over 100,000 members worldwide, but the section of the body financial advisers join is the Personal Finance Society (PFS), which has 30,000 members.
In its most recent member survey, PFS found that 89% of individuals consider themselves RDR-ready. Meanwhile, CII has issued a total of 19,030 SPS (as of 30 Nov) excluding renewals.
Jenkins says PFS has an extensive CPD programme, which can be accessed online as well as through attending meetings. The events cater for those looking for regulatory support as well as those who would like to progress beyond regulatory requirements towards chartered status.
He adds: “I think that it is important to give members a broad sense of the market rather than get them to focus only on the areas they are specialist in.”
Membership fees: £70pa for PFS student, £175pa for CertPFS, DipPFS, FPFS and APFS, £220pa for chartered.
Founded in 1955, the CFA Society of the UK has over 10,000 investment professionals as members. Only about 15% of these are wealth managers, with the rest working elsewhere in the financial services industry mainly as portfolio managers or investment analysts.
This is because on top of issuing SPS, CFA UK also provides the framework for members to sit their Investment Management Certificate as a basis for a career in investment management.
Craig Hurring, director of communications and marketing for the organisation, says it runs around 80 continuing education events each year, all of which are CPD-accredited. If advisers wish to study beyond the minimum RDR requirement (CFA level 1 plus IMC examination), it provides exam support through study groups, topic surgeries, mock papers and mock exams.
“All members have to abide by and adhere to the CFA Institute’s code of ethics and standards of professional conduct. The code and standards ¬describe best practice and provide guidance relating to professionalism, the integrity of capital markets, duties to clients, duties to employers, investment analysis and conflicts of interest,” Hurring adds.
Membership fees: £100pa, plus discounted rate to attend CPD events – typically £15 (non-members pay £50).
Nick Cann, CEO at the Institute of Financial Planning, expects a lot more movement between accredited bodies this year, compared to the situation before RDR.
Advisers’ priority before 31 Dec, 2012, was to receive their SPS in order to prove they were RDR-ready, he explains.
But now that the deadline has come and gone they will be more discerning about their accredited body choice and look for one that best fits their career aims and objectives, he adds.
Last October, IFP launched a register for accredited financial planning firms, which it says helps like-minded individuals to recognise one another and also provides a kitemark for clients.
A two-day programme (12 hours) of structured learning is provided for members to contribute towards their CPD and this is heavily focused on financial planning skills.
Additional CPD activities that are not driven through IFP can still be logged on its online system and count towards SPS renewal.
Membership fees: £175pa including SPS provision.