Finally, the wait for confirmation from the Financial Services Authority is over, and we know now what is and what is not an approved Professional Qualification for new entrants. We now have choices to make.
In this week’s blog I’m going to compare and contrast the offerings from the Chartered Insurance Institute (CII) and the IFS School of Finance respectively to see what they have to offer for new advisers. There are many other options, but most organisations I’ve spoken to have these two Awarding Bodies uppermost in their minds, and are wrestling with the relative merits and drawbacks of each offering. The IFS School of Finance qualification is the Diploma for Financial Advisers (DipFA), and the CII offering is the Diploma in Regulated Financial Planning. The latter distinguishes itself from its predecessor, the Diploma in Financial Planning, which is the qualification gained through requisite passes of the JO and AF examination papers, and is based on accumulating sufficient Diploma Examination Credits.
Each of these awarding bodies has adopted distinctly different approaches, although both cover the same technical learning outcomes and indicative content, prescribed by the Financial Services Skills Council, in order to be eligible for approval by the FSA.
Format and examinations
The CII has created a new suite, comprising of six units, RO1-RO6. Each of which has a syllabus which mirrors the Retail Distribution Review’s ApEx Standards published by the Financial Services Skills Council (FSSC) – i.e.
- Financial Services Regulation and Ethics
- Investment Principles and Risk
- Personal Taxation
- Pensions and Retirement Planning
- Financial Protection
- Financial Planning Practice
With the exception of the Financial Planning Practice module, which is assessed through a three hour examination consisting of two case studies with short answer questions, modules 1-5 are assessed through a multiple choice examination.
Of particular note is that the new Diploma Level examination covering Pensions and Retirement Planning, is assessed through a one hour, 50 multiple choice test examination, something of a departure from the previous Diploma Level assessments for JO4 and JO5, each of which entail two x two-hour written answer examinations.
RO5 (Financial Protection) and RO3 (Personal Taxation) are both one-hour, 50 multiple choice question assessment, so of interest in relation to Diploma Level Personal Taxation assessment, the transition is from a two-hour written examination (JO1) to a one-hour multiple choice type examination.
The assessments for Financial Services Regulation and Ethics, and Investment Principles and Risk are both two-hour, 100 multiple choice question assessments.
The IFS School of Finance offering for industry new entrants is a combination of its newly launched Financial Services Regulation and Ethics unit (FSRE), and completion of the Advanced Financial Advice (AFA) course.
FSRE is a new stand-alone syllabus which will replace the awarding body’s existing Financial Planning Principles unit. The assessment is delivered electronically through a two hour, 100 multiple choice examination.
The AFA course is completed in two key steps, a written coursework assignment, submitted after approximately 16 self-study weeks, and a 3 hour written examination, based around a detailed, realistic Financial Planning case study. The written assignment accounts for 30% of the overall weighting with the balance of the available marks to be picked up during the 3-hour written exam.
The whole Diploma for Financial Advisers qualification, including the FSRE unit, is designed to be completed within a period of 36 weeks. DipFA programmes will start every month, so students can enrol at any time, knowing that their chosen study timetable is geared towards a specific exam date.
Pricing
The enrolment fee for The IFS School of Finance route, which includes the learning materials and the exam entry fees, is £595 whereas the CII charge separately for the examination fees and the study text for each of the units RO1 to RO5. A quick add up of the total price for a CII non-member to complete the Diploma in Regulated Financial Planning, using the charges published on the CII website today, is £1,118. This price is discounted for CII and PFS members to £858. Purely on price terms, the IFS Diploma route appears to be significantly cheaper.
Duration of Study
The IFS option is designed to be studied and completed within 9 months, whereas the CII route involves six separate enrolments, study texts to read, and separate examinations for each subject. On the face of it, to compete with the IFS DipFA’s 9-month timetable, students working on the CII track would need to complete the reading, and take the examination for each RO subject on average, every six weeks. For busy trainee practitioners, this would appear to be a very challenging timetable indeed.
Which is the Best Option?
This depends on the individual or the organisation’s own criteria, and each has a judgement to make over the next few months. What is certain is that both these routes are now confirmed as Retail Distribution Review compliant, so whichever is selected, if successful, students will emerge with their Diploma Qualification, and meet the initial Retail Distribution Review Professional Qualifications standard required by the FSA, and will be well placed to embark on their ongoing, evidential CPD programme after 1st January 2013.
Mark Ehlinger - 23
rd July 2010