Consumers need independent, fee-based investment advisers more than ever due to increased wealth and the lack of easily comparable investments products. The Insurance Institute of Ireland (III), and the Life Insurance Association Ireland (LIAI), are offering advisers a Financial Planning Diploma (FPD) course. The first student received her diploma recently, according to the Irish Broker magazine.
Upon successful completion of the course and exams, an adviser can use the term Qualified Financial Adviser. The three-part exam covers everything from the social welfare system to protection products, savings and investments, mortgages and pensions, the euro and regulation.
Part one is a basic 120 multiple-choice competency exam that life advisers must take to comply with Irish Insurance Federation rules.
Once an insurance intermediary passes the exam, he or she may register for a Life Assurance Registration Council (LARC), number which allows them to sell products.
To receive a diploma as a qualified financial adviser, parts two and three of the financial planning diploma must be completed successfully.
However, the course falls far short of the rigorous testing and training required of such advisers in the United States and Britain.
Despite this, the diploma is a progressive step for this largely unregulated area.
One positive element of the Qualified Financial Adviser title is the obligation to participate in a continuous professional development (CPD) programme to ensure all QFAs are fully informed and up-to-date on the latest developments.
The Financial Planning Diploma Board will finalise the programme shortly.
Unfortunately, for the consumer, the continuous development programme may not be adequate. The industry has stopped short, yet again, of requiring more stringent policing. According to Irish Broker, "the programme will be self-certifying and will not involve compulsory tests or exams". The financial services industry will adopt stricter regulation of salespeople in the future, but it is uncertain which model will be followed - a strong self-regulating body or enforced changes made through the financial regulator.
Although fraud makes headlines, misselling is more commonplace. Increased consumer protection may only materialise when the single regulatory authority for financial services is introduced.
Even then, it remains to be seen whether advisers will be required to undertake training and pass Government mandated competency exams.
Although the need for truly independent fee-based advisers has increased substantially over the last three years, it appears the bodies that both represent and self-regulate individuals offering consumers' financial advice will be led kicking and screaming into a more regulated, customer-friendly environment.
Consumers are advised to do their own research and choose advisers carefully in advance of mandatory training and regulation.
