Competence and qualifications


The Financial Conduct Authority (FCA) has published its quarterly consultation on proposed miscellaneous amendments to the Handbook. As someone interested in exam qualifications and pension exams in particular, I was interested to read, ‘The FCA proposed changes concern the Training & Competence sourcebook list of appropriate qualifications and the new qualifications and amendments to TC Appendix 4 2.4 proposing the addition of one new qualification for the following qualification provider: Chartered Institute for Securities and Investment (CISI): proposing to add the ‘Certificate in Pension Transfers and Planning Advice (when combined with an RDR compliant qualification for Activities 4 and 6’) and to list this qualification as being appropriate for TC activity 11 (Pension Transfer Specialist). This follows on swiftly from CP16/21 where the new CII AF7 was proposed: The Chartered Insurance Institute (CII) ‘Certificate in Pension Transfer Advice’ and ‘Diploma in Financial Planning (subject to gap fill) + AF7 Pension Transfers.’ We propose to list these as being appropriate for TC activity 11 (Pension Transfer Specialist: PTS).’

It’s not all about exam qualifications (albeit they are essential), it’s about being qualified, competent and safe

The market for appropriate examinations for the pension transfer specialist role is expanding in line with the volume of activity. I’ not so familiar with the CISI offering as I write this, but here’s a summary of the key points on the AF7 exam and how it could work for you:

AF7 exam
20 Advanced credits
First exam on 10 October @2pm
2 hr exam (short questions and case study)

Of course, it’s the firm who hold the permissions to do pension transfer business. This business then should only be conducted by a competent individual holding the appropriate exam qualifications.The key point is that competence and qualifications are two completely different and separate sides to the same coin; an examination pass is only the start (albeit a HUGE stride in the right direction). The FCA are opening up the routes to appropriate exam qualifications for a PTS. That has to be a good thing for businesses and for clients.

The second part is competence in the role. Becoming a competent PTS is like being a trainee adviser: you need a mentor to help you build and present the cases competently. Again, it’s not just about the report or the TVAS; can you delivery it competently, wholly and with confidence to the client? Answer questions confidently? Have you explained exactly what risks are involved and which impact most on the client’s expectations? Have you established affordability (what some call capacity for loss) and do you have a deep fact-find to help you establish suitability -or otherwise?

When you have these three elements built, do you have the confidence to present the full report to the client, whether the advice could be to stay or leave the scheme? It’s not all about exam qualifications (albeit they are essential), it’s about being qualified, competent and safe. It’s about having a robust process.

A process which you can deliver.

In short, to become a competent PTS requires competence a range of skills and behaviours: the technical aspects (TVAS and sustainable income modelling); the Interpretation of the technical analysis; establishing a case justification (to stay or leave the scheme) and case presentation to the client. This is high-risk business and requires highly competent advice and advisers.

It’s not all about qualifications.


About Author

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Dubbed by friends and colleagues “The Pensions Professor”, John Reynolds is widely acknowledged as one of the country’s leading experts in the financial services education sector. He has spent 20 years teaching, consulting, mentoring and writing on the subjects of pensions and investments. John’s unique ability to take his years of experience and technical knowledge and present it in an easy to understand format, has resulted in his talents being very much in demand. His portfolio of corporate clients include CII, Lloyds, Scottish Widows, Santander and Wesleyan; as well as numerous IFA clients whom he provides technical consultancy, mentoring and training on client case studies and staff training.. He has put his extensive expertise (and heart and soul!) into developing the expertpensions (EPL) proposition. EPL is a structured and interactive technical exam training programme for IFAs. It's designed to give financial advisors the required technical knowledge, study strategy and exam technique to confidently sit and pass the AF1, AF3, AF4 and AF5 exams. Its online, it's fully supported, structured and designed to help advisers reach Chartered Financial Planner status quicker. It's ready to help your advisers reach chartered status

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