Qualifications: Where will it all end?

The retail distribution review (RDR) and CP 10/12 will introduce common denominators throughout the profession, but the key question for many wealth management businesses is what lies ahead?

Many argue RDR only marks the beginning of the raising of professional standards in the industry and anticipate that level 6 could soon officially become the benchmark.

Whether this will have a significant impact on the private client community remains to be seen. A survey carried out among the CISI’s members in autumn of last year found that 75% of respondents did not need to take higher level qualifications for the RDR, while Ian Cornwall, head of regulation at Apcims, estimates that 70% to 75% of its members are already qualified to level 6.

The CISI’s survey also found that 82% of respondents expect further increases in the level of exam standards for new entrants, with 88% in favour of raising qualification levels.

In a profession that is in the process of becoming even more professional, how can companies prepare for potential changes to standards in the future?

Charlie Hoffman, managing director at HSBC Private Bank, has introduced level 6 as the minimum for his team of relationship managers, with most taking the PCIAM or the Level 6 Diploma in Wealth Management. He estimates that 50% are level 6 qualified so far and hopes the whole team will be at this standard in 12 months’ time.

‘I don’t know if level 6 will become the minimum, but for HSBC Private Bank this is where we want to get our employees. We think our clients deserve this and it puts clear water between us and other boutiques and firms who aren’t committed to training their advisers,’ Hoffman said.

Looking ahead, the lay of the qualification landscape is slightly less clear, in Charles Stanley’s opinion. Learning and development manager Rebecca Young said the firm is holding fire on future training strategy until there is further clarification following the FSA’s consultation paper on Competence and Ethics (CP 10/12).

This outlines new qualification standards for discretionary managers (see our 'Guide to getting qualified'), including the IMC alongside the CFA. However, the list does not currently include the PCIAM, which many brokers who run advisory mandates previously opted for to cover them for the RDR. This represents a problem for those who run both retail advisory and discretionary mandates.

‘At this stage we are still digesting everything that is coming out. We will wait for a month or two to see if anything is going to be retracted or changed,’ Young said.