So here we are. Two full weeks into the blissful Conservative Lib-Dem coalition government honeymoon period. Amongst the 22 new Bills which the new coalition government hopes to successfully introduce over the next 18 months is the Financial Reform Bill. As the Monarch so eloquently announced on Monday, “this Legislation will reform the framework for financial services regulation to learn from the financial crisis".
Elsewhere, EU Commissioner Michel Barnier is advocating a network of national funds, to which Banks operating in the EU would have to contribute, so that in future, it is not the tax payers who should have to bear the heavy cost of rescuing the sector. In the US, the Senate has voted in favour of legislation which creates a consumer protection agency which is designed to prevent lending abuses, that triggered the housing collapse and the worst unemployment in almost three decades.
Back to Domestic matters, the UK tax regime is likely to see significant changes over the next few months. The first Budget of the new Parliament is just 4 weeks away, and for financial planners preparing for a UK Personal Tax examination, some might feel this is not such a good time to be trying to get to grips with some of the trickier technical learning.
All of these economic changes mean that consumers will need to visit their financial planning. The technical demands of the financial planner, underscored through the new professionalism standards arising from the Retail Distribution Review become all the more important and real. Financial planners will have to keep a very close eye on governmental changes in order to stay ahead for their clients. In these evolving times, the CPD requirements to ensure that professional financial advisers evidence that their technical knowledge is keeping up with contemporary legislation, become crucial. Focus’ TestMeOnline users will very soon be able to self-enrol onto their own structured CPD learning programme, confident that the materials and the testing will be right up to date –both essential for regulatory competence purposes, and also be able to offer a supreme technical service to consumers.
There is a lot going on which impacts on the investment sector and this enabled the unveiling last week by the Chartered Insurance Institute of the New Diploma in Regulated Financial Planning to go almost unnoticed. Nevertheless, for the 27,000 or so Personal Finance Society Members, this new Retail Distribution Review compliant qualification should start to become available to study next month and candidates can be examined in the individual subjects on a phased basis, starting from July.
The qualification is still subject to FSA and FSSC approval but for the Chartered Insurance Institute to unveil its proposed offering the required approval must be imminent.
As expected there are six examination subjects, each reflecting the prescribed QCF Level 4 learning standards required by the FSA. It is designed both for new industry entrants and experienced advisers seeking to upgrade to the new required level. Significantly, five out of the six technical examination subjects are to be examined by a multiple choice question methodology but three of the five subjects are just one hour, 50 multiple choice question examinations. Personal Taxation, previously a tough two hour written paper offering 20 exam credits has been slimmed down to a one hour multiple choice, 10 exam credits exam paper. Only the new Financial Services Regulation and Ethics, and the Investment Principles and Risk subject papers have retained the two hour exam duration and carry 20 exam credits each.
Perhaps surprising is that the Pensions examination previously at ‘old diploma’ level split into two x two hour written examination papers, each worth 20 exam credits has been replaced by a single 50 multiple choice question exam paper carrying only 10 exam credits.
The published ‘Study Hours’ guide indicates that for each two hour exam the indicative duration for a typical new entrant to the industry is 60 hours and for each of the one hour papers, the indicator is 50 hours (for a candidate new to the industry).
Being multiple choice exam methodology, the five technical subject papers enable candidates to get their exam results immediately – so students no longer have a lengthy wait and potentially a pause to their study momentum, which they might previously have encountered.
The final climb to the Retail Distribution Review professionalism summit is the Financial Planning Practice paper, a 3 hour written paper carrying 30 credits, for which the indicator study hour requirement is 100 hours. Better news, however is that this paper is examined 6 times each year in January, April, June, July, October and December and the results are issued within 4 weeks.
The time is fast approaching when financial planners can truly embark on an examination study programme, genuinely on a “No Regrets” basis.
Mark Ehlinger - 27th May 2010