Retail Distribution Review
Written evidence submitted by Clive Barwell
I would like to put my own situation forward as an example to the Committee of a senior industry figure who will be disenfranchised should the FSA’s current proposals on qualifications remain unchallenged.
Let me firstly put my cards on the table in so far as I have been an advocate and champion of the RDR and predominantly remain of that mindset. In particular, I support the move from commission to fees as a means of demonstrating our professionalism and would see it as a retrograde step if the FSA’s plans in that direction were watered-down at all. Also, I agree with the FSA’s desire to raise professional standards, but do not necessarily agree that examination passes are the only route to this goal.
Secondly, let me give you a little insight into my background and career to date, which I believe has made me a well-qualified and highly experienced adviser in my particular field.
By good fortune rather than design (I approached my Bank for an overdraft and found myself being interviewed for a job!), I joined Lloyds Bank’s Executor and Trustee Department in September 1971 on their Management Development Programme. I was fast-tracked through my initial training on accounts, taxation, investments, trusts and estate administration and then placed with the estate administration section for more in-depth training. Alongside this, I was encouraged to take the Institute of Bankers (now Chartered) Trustee Diploma, dealing with all aspects of estate and trust administration – I am sure the Trust Taxation exam I took and passed was based on the 1973/74 Tax Year! In addition to these external qualifications, the Bank ran a regular series of highly professional in-house courses on various aspects of Wills, trusts, taxation, investments, etc which I attended – the preliminary course shortly after I joined the Bank was, I recall, a six-week residential affair.
In 1992, the Institute of Securities and Investment was formed (now the Chartered Institute for Securities & Investment) to take over the professional body role from the Stock Exchange. Qualified, senior investment professionals were encouraged to join through a strictly controlled "grandfathering" process. By this time, I was Manager of Lloyds Private Banking in Leeds, which had grown out of the Executor & Trustee Department, and where we were looking after the investment, financial planning and taxation needs of the Bank’s wealthiest customers in Yorkshire. Consequently, as a senior investment professional I was invited to join, but the grandfathering was no push-over; I had to present my investment qualifications, which included the Trust Investment module of the Institute examinations and a two-week residential "International Private Banking Investment Course" at Manchester Business School, and be interviewed by a qualified Stockbroker. The latter was akin to an hour long oral examination (with no preset syllabus!). As a result of this process I was awarded the MSI designation and, subsequently in 2005, I was elected a Fellow of the Institute.
In 1991, the Society of Trust & Estate Practitioners was formed to bring together in one professional body various Trust and Estate Practitioners from Solicitors, Accountants, Private Banks and other organisations. As with the CISI, STEP decided to grandfather existing qualified, senior practitioners into the Society and exempt them from further examinations. Again I had to present my relevant qualifications and be interviewed by a senior Private Client Solicitor along with the obligatory oral examination. I was accepted into membership in January 1996 and given the TEP designation. In June of this year, I completed a 7-year term as Chair of the Yorkshire Branch of STEP, mainly spearheading a programme of Continuous Professional Development for our members.
In 1994 the Bank wanted me to move to their Private Banking Head Office in Haywards Heath, which didn’t appeal to me and, to cut a long and protracted story short, in January 1995 I accepted a redundancy package and left the Bank. I decided to become a self-employed Independent Financial Adviser and took the then only required qualifications, known as FPC1, 2 & 3, which I completed in March 1995. To be frank, I have always had somewhat jaundiced views on examinations, as, particularly in my banking career, I came across countless people with qualifications in abundance who were totally unable to apply their knowledge in a practical manner with the Clients! Consequently, I took the view that I would not take any more examinations unless and until the Regulator made them compulsory.
As I did during my career with the Bank, I continued as an IFA to specialise in investment and Inheritance Tax planning advice, which tended to mean I was dealing with predominantly older clients. Consequently, I considered my MSI and TEP "qualifications" plus my years of training and experience qualified me to advise in this market.
Upon reading the first consultative document from the FSA in June 2006, it was obvious that the Regulator planned to make more onerous qualifications the benchmark for the future, so I decided to "bite the bullet" and get on with it. I researched the various options open to me at that time and decided that becoming a Certified Financial Planner was my preferred route. The assessment for Certified Financial Planner is based upon the ability of the Adviser to apply his knowledge in a practical way by writing a Financial Planning Report, which meets very stringent, internationally-recognised criteria. Before sitting the assessment, the Institute of Financial Planning, which administers the qualification in the UK, has to satisfy itself that candidates are already suitably qualified. Having submitted details of all my qualifications outlined above, the IFP came back asking me to study for and pass the Chartered Insurance Institute’s AF5 examination –the financial planning process, which I duly did. I then submitted a 40-page word processed financial planning report to the assessors and was awarded the CFP designation in March 2008.
Around the time of completing the CFP accreditation, I became aware of a piece of work the Financial Services Skills Council was doing around the ethics of delivering financial advice to potentially vulnerable elderly adults, which interested me greatly as I was specialising more and more in that important, growing segment of the market. Out of the work done by the FSSC grew the Society of Later Life Advisers, which was launched in early 2009. The new Society decided not to be an examining body in its own right but to run an accreditation programme for suitably qualified advisers, the latter to include the CII’s examinations in Long Term Care Insurance and Equity Release – two critical areas for advice for the elderly. I duly took and passed these two exams and then completed an unbelievably stringent accreditation process to become admitted into membership of the new Society.
I am now aged 58, rapidly approaching 59, with over 39 years experience in the profession and feel I still have a lot to offer – my Father recently retired from his second career through ill-health at the age of 86 and I plan on following in his footsteps! I continue to specialise in elderly client matters, including investment, Inheritance Tax, Care Fees planning and Equity Release and would venture to suggest that I am the most qualified and experienced financial planner operating in this field in the UK today. I undertake more Continuous Professional Development than anyone I know – mainly because I have to satisfy the demands of so many professional bodies – so I keep myself very much up-to-date.
In March 2008 and until very recently, I thought I was "home and dry" as far as RDR and qualifications were concerned, as CFP is a QCF Level 4 qualification, which is the benchmark that the FSA has set. However, I now seem to be guilty of counting my chickens before they have hatched! The FSA does not recognise that financial advice has become extremely complex and that it is impossible for one individual to be an expert in all fields of financial planning as, seemingly, they want us to be a jack-of-all-trades. Consequently, the FSA has established 132 learning points which have to be covered to a QCF Level 4 standard whether the adviser is involved in the provision of advice in that area of not. With the qualifications I have, which are recognised by the FSA, I only have 61 of the 132 learning points covered! Ludicrously, a number of those with crosses rather than ticks are in the investment arena, despite the CISI being happy to award me a fellowship! The area that doesn’t surprise me is in relation to pensions; my average client has long since started drawing their pension, so I’ve never needed to become expert in this area. Working for a national firm, as I do, with a plethora of other advisers and technical support staff, I can "sub-contract" any complex pension work to other people and will continue to do so post-RDR.
The bottom line is that if I haven’t converted 71 crosses into 71 ticks on my gap-fill analysis by 01/01/2013, the FSA will revoke my licence! I know I’m biased, but I can’t believe that I’m the type of chap they are trying get rid of.
The above are my personal points of view and do not necessarily represent the views of Towergate Financial.
December 2010
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