This is really an issue of semantics. The change is unlikely to make any great difference to the nature and quality of the proposed examinations.
‘Approved’ examinations would have had to be approved by the FSA, involving a time consuming consultation on each and every proposed examination. ‘Appropriate’ examinations, on the other hand, can be assessed as appropriate by the Financial Services Skills Council, which will not involve consultation.
This could, theoretically, reduce cost and administration. However it could be argued this will not lead to safeguarding the standards of examinations given. Either way this will do little to reassure consumers, who remain as perplexed as ever. Until there are exams and qualifications ‘ perhaps even chartered status ‘ that are clearly understandable to consumers, this worrying confusion looks set to continue.
Towry Law Mortgages
The FSA’s decision to move from ‘approved’ to ‘appropriate’ examinations may seem on the surface to offer borrowers less protection.
However, although the FSA has openly admitted that these changes will help to reduce its costs and make more effective use of its resources, it has confirmed that this proposed change will be in the interest of the borrower. That said, until the FSA and The Skills Council for Financial Services (the body responsible for maintaining the examination list) have issued the proposed appropriate list it is difficult to gauge how this change could achieve this objective.
Clear definition of appropriate exams for appropriate skill levels will be needed to ensure that there are no grey areas of who is giving face-to-face advice to the consumer.
Skipton Building Society
The underlying issue regarding qualifications is the same as for the whole of mortgage regulation ‘ providers and intermediaries need clear guidelines, not just recommendations they are left to interpret. This is imperative if the sector is to lay a solid groundwork to build consumers’ confidence in advisers’ professionalism and avoid any future scandals.
From the customer’s point of view, they need to feel the advice they are given is based on sound knowledge ‘ most easily identified by a clear set of qualifications that can be trusted to meet the standards the regulator demands. If you take these away, human nature would suggest that a considerable number of people would work to the minimum standards required ‘ the exact opposite of what the FSA says its regulation is trying to achieve.
There is already an alphabet soup of qualifications for intermediaries. How a qualification is referred to is less important than what it signifies in terms of technical and practitioner knowledge.
The only real reason for streamlining the current network of exams into fewer recognised qualifications would be if it increased consumer awareness and confidence. The problem is, qualifications alone are not enough to guarantee excellence. A qualification is worthless if the adviser does not translate technical knowledge and competence into excellent client service and ongoing, ‘on the job’ professional education.
Provided that the FSA properly and prudently controls and monitors content and syllabus of what it deems appropriate exams, the distinction between ‘appropriate’ and ‘approved’ should not be overly significant. The FSA needs to ensure that it has enough arms and legs to police the system they are currently proposing so there is no room for abuse.
Alliance & Leicester
This approach fits in well with the FSA’s overall approach of permitting companies to make their own decisions about how they control their businesses.
Rather than being prescriptive, the FSA is pointing IFAs to the list of ‘appropriate’ examinations, under the new Skills Council for Financial Services. The challenge will be what is in the list and, just as importantly, what is not. Apparently, individuals who have already satisfied the MCCB’s requirements will not have to take new exams. So, other than for keeping up to date, this will only impact on new advisers. The impact on firms looks positive ‘ more choice without increasing costs, and for consumers there does not appear to be a downside.
Chelsea Building Society
I am not sure if the FSA is adopting a ‘hands off’ approach but more a sensible option of consultation with interested parties, seemingly via an industry and government led initiative.
Generally that is what the industry looks for, the ability to be asked to express a desire on how measurements and protocols are designed and administered at the early stages of development. Companies have spent a considerable amount of time, effort and money in systems, training and staff.
Should imposition occur with the advent of new testing then development carried out could be lost, or changed, at a cost to staffing, systems and profit. The end user is likely therefore to bear some of these impacts. It looks like a sensible option to start the discussion at as early a stage as possible to avoid what may be excessive costs of change by looking for an industry wide measures of competency.