The comments, made by Simon Chalk, technical manager of equity release at Age Partnership (pictured), come shortly after a Which? report revealed that some IFAs have been claiming to hold accreditations they do not have.
The investigation found less than half of the advisers at the Later Life Academy were on the official list of the credential’s official provider. Additionally, a third of advisers stating they held a Society of Later Life Advisers qualification were not formally accredited.
Chalk told Mortgage Solutions he is concerned the industry is not effectively regulating this issue and no compelling sanctions are currently in place to respond to it.
“The regulator naturally regulates firms but the responsibility currently falls on the firms themselves to police their own members, and it makes you think where do trade bodies fit in here? There is a process involved to join a trade body and once they have approved you, they don’t seem to make much in the way of background checks.”
There have already been cases reported of advisers lying to the FCA in the past, using fake qualifications as proof and posing a serious risk to clients providing unfit financial advice.
Chalk suggested that the industry needs a system where advisers are held accountable for themselves and their qualifications. The current practice of the firm as a whole being regulated is leading to the authenticity of adviser’s qualifications to go unchallenged.
“Once you have a qualification it stays with you and you can list it. Regulated permissions to carry out an activity is ongoing and you can ask for your permissions to be cancelled. That way at least it is all kept up-to-date,” he added.
However, there has been some debate on whether the large, and in some cases endless, number of qualifications expected from advisers is part of the reason many of them are being driven to fraudulently claim experience in different areas.
Robert Sinclair, chief executive of AMI, said: “The process of advice and complexity of the products we have make it hard for anyone in the industry to be a master of all trades. Firms need to be clear on what they do and don’t do and employ the right people with the right skill-set between them.”
Chalk echoed these sentiments, suggesting IFAs should be responsible for their own understanding and capabilities. If they know they are not qualified to provide advice, then they should move the client on to someone who is, he said.
“If you notice a gap in your knowledge base, skills or permissions you need to know where to hand off to someone else. It’s not difficult,” Chalk said.