Confused about qualifications? We put your questions to the FSA

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by Danielle Levy on Jul 22, 2010 at 17:16

Confusion has reigned among the wealth management profession since the Financial Services Authority (FSA) published its consultation paper on Competence and Ethics (CP 10/12) and outlined new qualification standards for discretionary managers.

To help clarify who will be affected and what qualifications may be needed to comply with the new requirements, Citywire invited our readers to ask questions. Below, the FSA gives its answers.

Q: Eric Spreng, Redmayne-Bentley (below):‘I think it is fair enough for the FSA to raise the bar to level four with the retail distribution review, but why move the goalpost [by introducing the T&C regime] now to something slightly different to the RDR?

A: Rachel Donaldson, FSA’s Professionalism team, Conduct Policy: ‘This is because we decided our training and competence (T&C) regime needed a review. There was nothing scientific about it. The RDR has been going on since 2006 and changes were made to the T&C sourcebook in 2007.

‘We needed to let those changes bed in for a while and this has been reviewed more recently. This year we conducted external research at the start of the process and other research on competence made us decide that some changes were needed.’

Q: Anonymous: 'What would a non-client facing fund selector or asset allocator need under the new regime?’

A: Rachel Donaldson: ‘They would not be making a personal recommendation, but what they do might impact what a personal recommendation might be elsewhere in the firm. ‘In terms of T&C they would not be doing a T&C activity, but we would need to look at it on a case-by-case basis.

‘On the face of it, no, [a fund selector or asset allocator] would not be caught, but this depends what they are doing and what this meant for personal recommendations for the firm.’

Q: Fenella MacLean, Rensburg Sheppards Investment Management (below): ‘Length of service, the experience brought to bear, compliance reviews from file sampling, CPD that is recognised alongside sitting the PCIAM. Why aren’t any of these sufficient?’

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3 comments so far. Why not have your say?

I agree with Fenella,

1. I recently received a letter from the CISI saying that I had reached the top of my profession as an Individually Chartered Member of the Institute (30 years experience, various exams taken NASD Series 7, 15 and 21 MSI module on Reg and Compliance , Intergity and Matters etc) but appear to be short of the level 6 requirement. I am writing to the FSA today with my objections.

2. What are the rquirements of senior executives of regulated business who do not give specific advice but who meet clients as part of welcoming them in to the business?

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I think its ridiculous that the FSA treats investment managers like children - I have slogged it out over the last 4 years doing all three levels of the CFA (18 hours of examination) and PCIAM and yet the FSA is assuming that I dont have the intelligence to look something up if I dont know something...having to do another exam to simply relearn about SIPPs and difference between equity and bonds is not going to make me a better investment manager.

I am not against there being minimum standards in qualifications, but a little common sense is needed here with regards to experience and the standard of qualifications someone has already done. For example, i have found the 3 levels of the CFA incredibly hard when compared to private client exams.

Furthermore, its a little naive to think that doing more qualifications will also not put an end to miselling and rogue operators in the industry...

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Anonymous 3 needed this 'off the record'

Jul 23, 2010 at 12:59

I also agree with Fenella - and the other commentators.

Is it just me, or are the FSA's 'answers' as unclear as their policies?

Fudging the issues and not answering the questions.

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