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Examining The Facts

Examining The Facts

Written by: Kim Bendall

The Chartered Insurance Institute (CII) announced in June that it is discontinuing some of its entry level Certificate in Financial Planning qualifications, due to a lack of demand. Unit CF5 (integrated financial planning) is scheduled to be withdrawn in July 2015, while CF2 (investment and risk) and CF4 (retirement planning) are being given their marching orders in August 2015.

The Certificate level exams were primarily targeted at those in non-advisory support roles and have understandably fallen in demand due to the rise in advisers’ minimum qualification requirements from Level 3 (Certificate) to Level 4 (Diploma).  However, this has sparked some reaction within the advisory community about exactly how well we, as an industry, attract and support people who are new to financial services careers or who are not necessarily interested in becoming advisers.

Being a bit long in the tooth these days, I’m nostalgic about the qualifications landscape back when I first started out.  The process seemed a lot simpler back then: you started with the Financial Planning Certificate (FPC) 1, 2 and 3, followed by a handful of Advanced Financial Planning Certificate papers (G10, G60 etc.) to reach AFPC level. If you were a real glutton for punishment, you could sit a load more AFPC exams and achieve Fellowship. The exams were very hard, but the process itself was pretty straightforward. We all knew where we stood.

One of the main differences I notice between the exam suite of a decade ago and the current range of modern qualifications is the sheer volume of individual subjects that are now available.  If I’ve understood it correctly, you currently need to pass five exams (70 credits) to gain the Certificate in Financial Planning, six to gain the Diploma in Regulated Financial Planning (another 100 credits), plus at least another four to gain the Advanced Diploma (minimum 290 credits). Whatever your viewpoint on this (and boy oh boy, there are some strong opinions out there on this subject), there are two things that are not glaringly obvious, but bear thinking about:

  1. The move from a smaller number of bigger exams to a larger number of micro-subjects (modular learning) is not just limited to our own industry. The exact same thing is happening around us in all walks of life. Anyone who has themselves – or has children that have – sat GCSE or A-level exams in the last five years or so will identify with this new style of learning.  It seems as though kids between 14 and 16 have major exams every few months – and it’s getting that way in financial services too.  Personally, this makes me feel a bit uneasy.
  2. From an employer’s point of view, you should ideally keep up with all of these changes, even if you’re not currently sitting any exams yourself. For example, you may also need to help your staff develop and achieve their training plans, which will involve a detailed understanding of the qualifications they need to sit. Similarly, when hiring someone, you need to understand the level of their knowledge and qualifications to make sure they will be the right fit for your company and help you gauge how much you should pay them. All of these things are hard to manage if you have no real point of reference.

To some extent, I have sympathy for the Institutes when it comes to qualifications. The requirements they have to satisfy and hoops they have to jump through in order for their professional qualifications to be ‘recognised’ at a national level make it very difficult for them to offer something that ticks the Education Minister’s boxes, is interesting and engaging for the students, and is commercially viable for the examining body to offer. Basically, they’ve got at least one hand tied behind their back at all times.

The goalposts have moved.That being said, irrespective of what the rules and regulations are, the whole process seems fundamentally flawed. The sheer number of exams that a new entrant into our industry needs to sit in order to gain a Level 6 qualification is staggering – not to mention quite daunting for anyone starting out at the beginning of the process. I also feel for those people that got halfway through their exams, only to have the goalposts moved. Sure, if it was easy then everyone would do it, and we need to make sure that anyone giving advice to clients has a decent minimum volume and breadth of knowledge, but isn’t there genuinely a better way?

One of the hardest things people find about our industry exams is the fact that they are generally correspondence courses.  Most of us don’t have a problem with self-motivation; the desire to learn is definitely there, but we miss the interactive benefit of a classroom or workshop environment, where opinions and understandings can be explored and challenged. The Accountancy industry has a good way of dealing with this, by offering students intensive residential courses. This helps them learn quicker, improve knowledge, develop new skills and spend time with other like-minded people to share ideas with. In contrast, learning in our own industry can be a long, drawn out and lonely experience. Not exactly enticing for the much-needed young blood that we’re trying to attract…

It’s not all doom and gloom though. The one real blessing we have is the diversity between the CII/PFS and the IFP. Irrespective of which one you may favour over the other, the two Institutes – whether deliberately or not – dovetail with each other quite nicely, rather than being directly in competition.

From an employment point of view, we as a company prefer to hire people who are Chartered Financial Planners, as this demonstrates to us that the person we’re hiring is likely to have the level of knowledge that our clients will be looking for. However, someone with the IFP’s CFP license is more likely to grab our attention, because it is a strong indicator that the applicant not only has the required knowledge, but can apply it in practice as well. It is important, particularly in Paraplanning, to differentiate those who are good at passing exams from those who are good at actually doing the job.  There is, after all, quite a difference.

I don’t think there are any easy answers to these problems.  However, I can’t help noticing that the current year 10 students in school are now reverting back to less modular GCSEs, where more of the onus sits on larger, end-of-year exams. This makes me wonder if, over the next few years, many other industry qualifications (including our own) will start converting back to a smaller number of larger exams.  This would certainly make the whole process much easier to understand and, possibly, help candidates get to the level that they’re required to achieve more quickly.

Make them hard, but make them interesting and above all achievable in a reasonable amount of time. The more consolidated exams of the past did exactly that, and I don’t know about you, but I had a much stronger sense of achievement from passing those exams than I do the modern ones.

I can’t believe I’m going to say this, but come back G10 – all is forgiven.

Kim Bendall is a Senior Outsourced Paraplanner at ‘The Paraplanners’, providing outsourced paraplanning services to some of the most cutting edge IFA firms throughout the UK.
She has worked in the finance industry for 17 years and has been a career Paraplanner since 2000  Holding the IFP’s Certified Financial Planner license, as well as their Accredited Paraplanner status, Kim is also a CII Chartered Financial Planner and Fellow of the Personal Finance Society.  She believes it is important for Paraplanners to be able to operate at (at least) the same level of technical expertise as the Advisers they work with, in order to provide the service and quality that is expected of them.