Retail Distribution Review

Written evidence submitted by David Haxby , Independent Financial Adviser

. Summary of the main points.

1. All IFA’s (Independent Financial Advisers) who have to be currently qualified (with the Financial Planning Certificate FPC1,2,3 - Level 3) have to have reached a new qualification known as Level 4 by the cut off date 31.12.2010.

This is irrespective of the number of years that they may have been in the industry.

2. If this qualification (Level 4) has not been achieved by 31/12/2012 then the FSA will terminate the IFA’s authorisation. This means that without the additional qualification by the cut off date, all such IFA’s will be de-authorised and unable to trade within financial services or give financial advice.

3. In turn the Product providers will foreclose the respective IFA agencies. Without an agency agreement with the IFA, the IFA will be unable to earn his livelihood (restriction on trade).

4. With no agency agreement in place, all commissions due to the IFA from the Product Providers will cease, despite there being unpaid or contractual remuneration still to accrue. This will include existing commission due to the IFA through contractual commission agreed hitherto with the Product Provider.

5. All contractual fees agreed between the IFA and the client for ongoing financial advice will have to cease.

6. The FSA advise that CPD credits is not an acceptable route to bridge the gap between the existing Financial Planning Certificate – FPC1, 2, 3 and Level 4.

A Brief Introduction

David Haxby joined Allied Dunbar Assurance (now Zurich) as a tied agent on the 17 th of November 1986.

He has been in this industry since that date.

On 1 st January 1995 David Haxby became an Independent Financial Adviser (IFA) trading as:

David L Haxby & Co.

On the 1 st of April 2003, David L Haxby incorporated as South West Investment Consultant Ltd., trading as David L Haxby & Co., FSA Number: 501125

Currently the firm is a member of: Financial Ltd., Unit 1, Andoversford Business Park, Andoversford , Cheltenham, Gloucester, GL54 4BL which is authorised and regulated by the Financial Services Authority.

Factual Information I would like the committee to be aware of

Details of the current qualification require by the FSA

FPC - Financial Planning Certificate – Referred to now as: Level 3

Originally developed for financial advisors, to provide a broad based knowledge of key topics for financial planning, this qualification has 3 component parts:

FPC 1 - Regulation and compliance

The FPC1 exam is a 2-hour paper of 100 multiple choice questions and focuses on a variety of topics relating to regulation and compliance.

FPC 2 - Protection, savings and investment products

The FPC 2 is a 2-hour paper with 60 multiple choice questions and 40 true/false questions and aims to develop candidates' specific product knowledge and their ability to apply it when advising clients.

FPC 3 - Identifying and satisfying client needs

The FPC 3 exam is a 3-hour paper with 3 case study related questions, which tests a candidate’s ability to conduct a factual check of clients' needs, to assess those needs and to be able to recommend appropriate products, considering the regulatory framework and the various products and providers covered in FPC I and 2.

Background/History of authorisation

By the end of 1995 those in the financial services industry and those joining were required by the then regulator; the Personal Investment Authority (PIA) to obtain a qualification which was:

The Certificate in Financial Planning FPC1, 2, 3.

How to get from level 3 to the required level 4 by the end of 2012

Pay the Chartered Institute of Insurers (CII) the sum of £650.00 for their study material and exam fees.

There are a series of exams and for those IFA’s with Financial Planning Certificate –FPC1, 2, 3; it would be a minimum of 4 concurrent exams.

Alternatively, pay the Institute of Financial Studies(IFS) the sum of £595 for which there would be a rolling programme of study and exams over 1 year after which there would be a 3 hour final examination.

Any Recommendations that I would like the committee to consider in its report

Agree that IFA’s may fill the Gap between the existing Financial Planning Certificate – FPC1, 2, 3 and Level 4 through Continual Professional Development (CPD) between now and 2016.

January 2011