Sales and marketing director Stephen Young believes that, alongside the new benchmark for full IFA status set at QCA Level 4, it should also be possible for advisers with lower level qualifications to continue to advise, by operating on a more limited basis and under full supervision – as is the case in the legal and accountancy professions.
Young says the FSA is too focused on academic assessment, which should not be the only proof of competency: “The introduction of a progressive licensing system would enable competent and well-capitalised firms to use assessments such as TCF management information (MI), complaint monitoring data and consumer surveys to determine the overall competence of their advisers.
“Competency in its truest sense is about knowledge, skills and experience, which is why we are urging FSA to be open-minded about the avenues that will lead to higher professional standards. It is a journey that Sesame wholeheartedly supports, but we must at all times be conscious of the need to improve consumer access to professional advice.
“A rigid approach risks unintentionally disenfranchising a significant proportion of competent advisers - therefore potentially reducing clients’ access to professional advice.”
Young argues that this is not an attempt to dumb down standards and he would be happy to see the same logic applied to specialist areas of advice, such as pension transfers and lifetime mortgages, where qualifications above QCA Level 4 should be mandatory before advisers are allowed to operate in these complex areas.
“Whatever the QCA Level 4 is ultimately defined as, it should not overlook experience and knowledge. It would be an utter travesty to force experienced and competent advisers out of the industry, particularly at a time when consumers need more advice, not less.”
Young also believes this approach would serve as a pathway for new advisers, who would not have to spend four years achieving QCA Level 4 before they become economically productive. He says: “The growth of our profession could be constrained for years to come by the difficulty and expense that potential new advisers face in meeting the new benchmark.”
He continued: “The FSA believes higher professional standards will attract more people into the industry, however we are sceptical as to whether this strategy will work in practice given the lack of evidence to support the regulator’s position. It may take a generation for new people to join in sufficient numbers, leaving a chasm, and therefore lessening people’s access to professional advice for years to come. That is why getting the transition right is so crucial for everyone.”
