A sore point for many IFAs is the continued perception among the public that they are not profession...
A sore point for many IFAs is the continued perception among the public that they are not professionals in the same league as solicitors and accountants. This perception is, of course, largely unjustified ' IFAs have to work under equally tight regulatory controls as their legal and bean-counting counterparts and stringent compliance procedures mean that today it is neither easy nor desirable for IFAs to get away with 'non-professional' conduct.
But the perception exists nonetheless. The two major mis-selling scandals are largely to blame for this lack of faith. Furthermore, the public often fails to differentiate between the various providers of financial advice ' people tend to remember the quality of advice more than the status of the individual they received it from and therefore poor advice reflects badly on financial advisers across the board. It is not unusual to come across people who say they distrust IFAs because they have received poor advice from their local building society's so-called 'impartial' adviser. The distinction will, of course, become more blurred, and the problem for IFAs exacerbated, with the introduction of multi-ties to the market. As a result of all this, IFAs have to work doubly hard to achieve credibility as professionals.
But they also must accept the additional obligations that go hand in hand with professional status. When, for example, the Financial Services Authority (FSA) announced in mid-June that it was to reconsider the mandatory requirement for professional indemnity (PI) cover, many IFAs jumped for joy at the thought of being relieved from what they see as an unnecessary financial burden. PI insurance is not perfect ' it is expensive, has high excess levels and numerous exclusions ' but the reason for the FSA's review is to make the cover fairer and more affordable, not to scrap this vital protection altogether. IFAs should recognise that PI not only offers protection to their clients and to them personally, but also makes good business sense, giving their organisations a hallmark of quality.
IFAs will also have to consider taking more than the bare minimum in terms of professional qualifications if they want to be regarded with higher esteem by the public. Qualifications, such as AFPC and insurance-related technology or marketing certificates, translate into letters after a name, which should in turn translate into an increased flow of people through the door. According to our training and marketing special report (see pages 20-33), customers are more likely to shop around for the IFA who appears to be best qualified.
AFPC also allows IFAs to join the Society of Financial Advisers, which opens the door for them to take up to 10 further papers which result in the title of Fellow of the Society.
The more advisers that take advanced qualifications, the better it is for the industry as a whole. As Peter Ellis, vice president of the CII, says: 'If we could wave a magic wand and get every IFA to take AFPC we, as an industry, would be taking ownership of our profession.'
