For immediate release: Thursday 28 November 2002

IMA WELCOMES FSA’S PROPOSAL FOR MORE INVESTMENT KNOWLEDGE IN ITS APPROVED EXAMS FOR ADVISERS

The Investment Management Association is pleased that its call for higher standards of investment knowledge amongst advisers has been heeded in the FSA’s Consultation Paper 157 on Exams for Advisers (Examination Framework for Retail Financial Services (Investment Advice Strand 1)).

“The ability to manage investments is central to personal financial planning, but you used to be able to pass FPC, and so give investment advice to the public, without answering a single question on investment funds1 We are delighted that this unhealthy situation is being rectified,” said Victoria Nye, Director of Training and Education at IMA.

Levels of investment knowledge required

IMA helped FSA and the FS NTO host discussion groups with IFA practitioners earlier this year to ascertain the appropriate level of knowledge for ‘general practitioner’ advisers.  The modules outlined by FSA should focus attention further on where the line should be drawn between core and specialist investment knowledge.  The syllabi should be regarded as work in progress and it is vitally important for practising advisers to respond, stating realistically what they need to know in order to give a professional service to clients with savings and investments.

“We must be practical and make changes which are in the best interests of consumers.  There is a fine balance between raising standards and making the profession so exclusive that only a small minority of investors can afford to buy its services,” added Mrs Nye.

The IMA is also calling for clear signposting as to the investment expertise of individual advisers, so that it will be easier for prospective clients to find one suitable to their needs. 

Portfolio Management

“There are many excellent investment advisers, but we need more who are confident in managing portfolios of funds.” said Mrs Nye.

Someone who has bought an investment fund PEP or ISA every year since they were launched could have over £100,0002 in equity investment funds even after the stock market falls.  Do they need specialist investment advice or can the generalist adviser still offer a good service?  How much more does the generalist need to learn?  CP 157 suggests that greater understanding of investment risk is necessary for all advisers.

The question of advisers’ understanding of investment risk, asset allocation and portfolio management was also raised in the Sandler Report. 

IMA believes the new framework outlined in CP 157 should give greater flexibility to advisers, as well as encourage higher standards and help to establish Financial Planning as an internationally recognised profession.

For further information please contact:

Victoria Nye, Director, Training and Education, IMA, 020 7831 0898, Mobile 07860 498 668

Clare Arber, Head of Communications, IMA, 020 7831 0898

Notes to Editors:

Current Entry Level Exams for Advisers

The current approved exams for advisers are the Financial Planning Certificate (FPC) run by the Chartered Insurance Institute (CII), the Investment Advice Certificate (IAC) run by the Securities Institute and the Certificate for Financial Advice (CeFA) run by the Institute of Financial Services.  To find out about current adviser qualifications on the IMA website, please click here:

Training Courses, Distance Leaning, Case Studies and Top-up Qualification on Investment

The IMA runs training courses for advisers who wish to improve their knowledge and skills as investment advisers.  It has developed investment case studies for LIA workshops; has helped the CII produce a distance learning programme and is also helping CII to prepare a top-up qualification on investment for FPC qualified advisers. For more information on IMA’s courses: Understanding Investment Funds launched in 1996 and Portfolio Planning for Practitioners launched in 2000.

65 Kingsway London WC2B 6TD 

Tel: +44 (0) 20 7831 0898 Fax:+44 (0) 20 7831 9975 

www.investmentuk.org 

Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.