We need to talk about qualifications

I find it quite extraordinary that those of us who have between 20 and 40 years of experience are effectively being told that unless we pass these exams someone who has just entered the industry and passed all the relevant exams is better qualified.How can the regulator possibly quantify "experience" on this basis?It is retrospective legislation that is totally inappropriate for those that have been "grandfathered" up until this point.In addition,the law of unintended consequence means that those of us who work in the investment management industry and have nothing to do with selling insurance products et al,have been dragged into the IFA net.

It is insulting to those of us who have looked after our clients for decades to now be told that we are not qualified to do so.Some of the most brilliant fund managers in the city will be affected by legislation that has been ill thought out and presented and could be interpreted as a restriction of trade.

It is a nonsense and whilst I support a robust qualification for newcomers,those who have gained years of market experience should be left to get on with what they are good at.You cannot teach "common sense"

and "experience" nor an eye and nose for markets.

Talking of fairness,as the FSA is being "reshuffled",would it not be sensible that current officers of the FSA are required to re-apply for their position,and that part of this requirement is that they study for-and pass- a further exam,with 25% of the content having nothing to do with their normal day to day business,in order to demonstrate overall competence and understanding.

This would them put them on a more equal footing with those that they desire to regulate.

Can one have complete and utter faith in a regulator that changed its initials from the SFA without realing that the Food Standards Agency got there frst ? !

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 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. And more qualifications will also not put an end to miselling and rogue operators in the industry. A little common sense is needed here...

Qualifications are a great starting point to prove that someone at least has a grounding in the basics, even though theymay not have the experience. Experience is something which cannot be taught. So, for new entrants a good entry standard exam should be set. I think the main thrust for the FAS should be what happens after that. What is the training and CPD regime in each firm?That is what they should be monitoring to make sure that even the most experienced managers are forced (compulsorily in my view) to keep up to date with current investment and regulatory issues. Exams are a smaller part of the overall debate.

Charlie, this is clearly a major headache for advisers and wealth managers and I think your initiative in opening up a forum for debate is to be welcomed. Apart from the profession talking to itself I very much hope that the FSA is eavesdropping.

Various points occur to me which I'd be interested to get other professionals' reactions to:

1. We all feel the thereapeutic value of a good five minute rant at the injustice of it all, like coming back to your car and finding it ticketed by a zealous warden. I've been doing this for years, I've got lots of happy clients, why do I need a certificate to stay in business, blah blah blah. Now we've got it out of our system, let's take a deep breath, calm down and think about how we got into this mess and how we can (individually and as a profession) get out of it.

2. The FSA is arguably using the wrong tools to tackle a problem which it hasn't properly defined and doesn't fully understand, but I think we as a group are deluding ourselves if we don't think there is a problem to be addressed. A lot of people have made a lot of money out of business practices which the FSA doesn't like (expensive and opaque fees, advice influenced by provider interests) and while I'm sure that every one of them is scrupulously honest on a personal level it is not realistic to expect things to change in the absence of outside pressure. It is easier to quarrel with the FSA's methods (all of us should have formal written qualifications) than it is with their objectives (the retail investment business needs to raise its game).

3. That being said I do wonder if someone shouldn't point out to the FSA how the Law of Unintended Consequences works. With continued uncertainty as the deadline comes into sight, many older and more experienced professionals are going to wonder if the effort of taking the exams in order to remain active for the last few years of their careers is worth it. The profession needs its bright young thrusters with a sheaf of qualifications, but it also needs its greybeards, and suddenly replacing a lot of the latter with a lot of the former isn't going to do much for client service or high quality long term management.

I think Gareth is spot-on.I did the exam I was ask to do over 12yrs ago,I see no reason to do more, many experience people will just quit rather than wanting to spend their free time revising.

When I joined the 'Life Assurance Industry' in 1986, I did a mandatory foundation course that taught me the fundamentals of Protection, Pensions and Investment. At the end of that course, I was licensed by the company in basic products in these sectors. Thereafter, to progress to more sophisticated products and services I had to take a specific course - usually a week long,

with a pass/fail exam at the end. Thus I built up a full license by getting comprehensive tuition, examination and by experience in the field. I was obliged to re-license on a regular basis as products evolved, so my license was always up-to-date. This is still the case even as an IFA. - at the moment!

The drive for higher and more comprehensive (and dare I say it arcane) qualifications that we are all being driven towards, are almost entirely Knowledge-based, hardly touch on skills at all, and demonstrably ignore anything remotely to do with relationship and trust building that takes years to develop, and what drives most of us (I hope) to do the best for our clients based on our experience and understanding of of their needs and circumstances. Selling product can be left to the sharp young people in the banks. The FSA has nothing to teach anybody about building relationships - and has absolutely no idea how to test it either.

Fund managers are saying nothing that IFA's haven't said before. The FSA wants the industry in a few boxes so that regulation will be easier for them. In other words they would like nothing more than only the banks to regulate. The only problem is that they don't understand the banks or what they do. If they did some of the mess the banks got involved in over the last few years could have either been avoided or at the very least the effects could have been reduced. The FSA is only concerned with protecting their own backs whilst dressing it up as some moralistic stance on behalf of customers.

Thank you everyone for your thoughtful contributions today. Many angles for us to follow up

The FSA for all its wrongs is right with this one.

Whilst experience should count I am tired of hearing the same old story “I have done this for 30 years and all my clients are happy"

The truth is that when you do these exams you gain considerable knowledge. I know I have been there. Gareth is on the right tracks here.

You can use an experienced Mechanic in an old garage where they may tell you that they cannot fix this part anymore as the technology has moved on and they do not wish to go there.

That is where the old IFA’s are. Either smarten up and accept that you are being left behind technically or join the professional ranks.

You have earned well for not being qualified now to earn well you are going to have to be qualified.

Old boys accept the fate as this is from an old boy!

I have seen this is so many occasions

Having passed the new masters in welath management without too much trouble (as much of the exam is based on your day to day activities) and with a relatively short 7 years in the industry - surely experts with 20 years plus should be able to pass without much trouble?

Or is it the fear of faliure causing the friction....?

Okay Anonymous 7 - well done to you. But you are way off the mark here.

Having sat the PCIAM I used techniques and learned formulae that I have never used in my day to day activities in 30 years - and never will.

There is nothing wrong with learning and updating (Anonymous 6)and I agree that there are too many out there in our industry that are letting the side down by harping back to their (in)glorious pasts. But to push someone who was at University over 30 years ago into sitting a Level 6 exam is asking for trouble.

It's not the fear of failure, you cheeky young pup, it's the fear of the exam itself! You may have been in the industry for 7 years but at least you can still remember your University or College or School days.........sadly for many of us that is too far back in time!

You may have passed the Masters 'without too much trouble' Anonymous 7 - but I'll bet you have experience of studying and exams within the last 10 years.

You can teach old dogs new tricks....just don't make us sit exams at the end of the course...........

To all cheeky young pups - I took my first degree in the 60's - the 1960's that is not the 1860's as is so often implied by those still wet behind the ears. Following post grad study in the UK I managed to get an MBA from New York and a further Masters from Illinois. Add to this 30 plus years as an Adviser and you may begin to understand why I am simply not prepared to be insulted by taking any further exams.