The answer to long-term care funding issues is ongoing with the Dilnot review central to industry debate. The FSA has published final guidance stating a qualification in long-term care will not be required of independent intermediaries post-RDR - what are the considerations of integrating long-term care advice into a firm's proposition?
Chris Bryans, Ariun Financial Consulting
It was encouraging the FSA took a pragmatic stance on the issue of long-term care insurance advice and remaining independent post-RDR.
While my firm remains independent, it is unlikely we would seek to employ someone specifically with the requisite qualification in the near future.
As with many aspects of the RDR, this was potentially a challenge, particularly as there is such a limited demand for the product.
It would be difficult for many advisers to suddenly elect to become competent. Although I used to be deemed competent in this area, as I had taken a CII examination some years back, it was subsequently considered insufficient for the purposes of providing LTCI advice. At the time the CII very kindly provided free text books and exam entry for the new subject - I think I might even still have my old CF8 manual in the garage.
Now the FSA stance has been clarified, we will look at arrangements to ensure we can identify those clients who may need advice on LTCI and to refer them to an IFA who is qualified and competent. It is much more practical for us to put these arrangements in place for such a niche area, than to try and perhaps encourage someone to take another exam at short notice. For this the FSA has to be applauded.
We have good relationships with a number of other firms and I am hopeful that we can identify someone competent before the end of the year.
Chris Daems, Principal Financial Solutions
My understanding of the FSA paper is that, while the long-term care qualification is not compulsory post-RDR, if an adviser has not got the required qualification they will need to identify client needs and refer it to a specialist that has. The FSA is correct in highlighting long-term care advice as a niche which requires specialist support, although I would not personally look to provide advice in this area.
I believe that, moving forward, post-RDR advisers will specialise in niche areas of the market, either working individually or within a multi-disciplinary practice. This will allow them to focus on their areas of strength in a similar way to other professionals. For example, the way the legal sector has developed, while most solicitors and barristers have generalist knowledge they tend to focus on a specific niche with a deeper understanding of a specific aspect of the law.
But in our business we have an adviser who does hold the required qualification and therefore if we had a client who needs help in this area we could utilise our internal expertise to ensure that the client received the advice required.
If our practice did not contain an adviser with the required qualifications and experience, and we identified a client who needed help in this area, I would look at engaging with an external adviser who had the required qualification levels, knowledge and expertise to ensure that our client was provided with the most appropriate advice based on their needs.