Tougher education requirements test UK planners

Concerns are being expressed that deadlines relating to efforts by the UK’s Financial Services Authority (FSA) to lift the educational requirements for the provision of financial advice may end up causing a shortage of advisers.

Retail investment advisers in the United Kingdom will need to hold a defined and officially recognised qualification — a Statement of Professional Standard — if they want to give independent or restricted advice after January, 2013.

The UK’s Financial Services Authority has released a policy statement following its so-called Retail Distribution Review, with the result that financial planners working in the UK will not only be required to hold higher qualifications but that the status of the qualifications will have to be monitored by their employers.

However a UK organisation specialising in finance sector education, the Financial Services Skills Council (FSSC), has warned that tight deadlines imposed upon the introduction of the new UK regime would make it difficult for current advisers to reach the new standards required of them.

FSSC deputy chief executive Sarah Thwaites said the FSA needed to ensure a transparent and consistent process relating to the implementation of the new and higher qualifications, including possibly allowing advisers to continue to work while obtaining the higher status.

The FSSC described the deadlines relating to the introduction of the new qualification — the equivalent to the first year of a degree — as “hard” and said it might make it difficult for some current advisers to reach the new standard in time, leading to a shortage of qualified advisers and a reduction in consumer access to advice.

Underlying the actions by the FSA is data suggesting that inappropriately or badly sold investments was costing consumers between £400 million and £600 million.