Financial qualifications are just a mess for consumers

Consumer protection through effective regulation is rightly the mantra of financial services – but does the consumer really understand what is going on?

Financial services has layer upon layer of regulation and qualification for advisers.

The retail distribution review now firmly embedded in the industry but do consumers have any idea what RDR stands for, let alone how it is supposed to protect them and their cash?

From the outside looking in, financial services regulation seems confusing and disjointed.

Take the statement of professional standing (SPS). The term is meaningless to a consumer but everything to an adviser.

All retail investment advisers – more industry jargon – must hold a valid SPS issued by a Financial Conduct Authority accredited body to give advice from January 1, 2013.

This is the official list of accredited bodies on the FCA web site:

• CFA Society of the UK
• Chartered Institute for Securities and Investment (CISI)
• Chartered Insurance Institute (CII)
• The Chartered Banker Institute
• The London Institute of Banking & Finance

The idea is that consumers should be reassured that members of these organisations have ethical codes and complaint procedures to govern how financial advisers ply their trade.

Within the industry, advisers, trainers and supervisory bodies are at daggers drawn over SPS costs and membership fees, also each accredited body has a slightly different interpretation of these codes – like the acceptance of different qualifications to support an SPS application.

What is really needed here is a clear and transparent consumer protection policy run by one organisation with a set of rules and guidance that is applied to every financial adviser.