In order to properly explain the ramifications of gap-fill and its importance for many IFAs today, I need to hark back to the halcyon days when the retail distribution review was nothing more than a twinkle in the FSA’s eye.
In years to come I imagine that young advisers will discuss the pre-RDR world in the same tones of wonderment that those under 30 currently use to talk about the fact that there used to be only five – if not four – television channels. However, strange as it may seem to them, IFAs managed quite happily for many years with just their required Financial Planning Certificate parts one, two and three to allow them to advise and their annual continuing professional development top-ups.
When the FSA launched RDR with the high-level aim of helping consumers to have more understanding of, and confidence in, financial advice, services and products, the early discussion documents held some clues on what requirements IFAs might face regarding levels of qualification. The most notable, included in the professional financial planning and advisory service section of the discussion paper, added: “To improve the quality of advice, the industry is suggesting that higher professional standards are needed.”
In theory the majority of the IFAs I know would strongly agree with the aims of promoting better consumer understanding and improving the professionalism of our industry as a whole. We understood that this would mean changes to the level of qualification advisers would need to operate compliantly post-RDR but neither the June 2007 discussion document nor subsequent consultation documents were able to offer guidance on exactly which qualifications would be needed to meet the FSA’s new, higher standards.
It was, correctly, suspected by most that the increased level of necessary qualifications would mean a move from the current QCF level three – the FPC – to QCF level four, diploma status or higher. However the FSA had already stated that it would be unable to give exact details of the qualifications needed until 2010, causing consternation for many advisers. The fact that the qualifications were as yet unspecified caused an understandable ripple of fear through the adviser community. With no firm knowledge about the diploma requirements, many were anxious that the announcement of qualification specifics in 2010 would not leave them enough time to achieve all that they needed to before the deadline at the end of 2012, especially with an understandable rustiness in study and revision skills.
Before the FSA committed to exactly what qualifications would be acceptable post-RDR the regulator introduced a policy of ‘no regrets’, meaning that any qualifications taken at a higher level by advisers would count towards them reaching higher professional standards and would not be wasted. Any discrepancies between the learning objectives covered in the syllabus at that time and the FSA’s final summary of skill requirements could be filled at a later date with CPD. The exercise which many advisers are now undergoing to cover the discrepancies between the pre-2010 syllabi and the post-2010 FSA learning objectives is gap-filling – which brings us up to the present day.
