IFA calls for (common) credit where its due

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The Institute of Financial Advisers (IFA) has called for the creation of common standards for adviser competence, particularly for the ‘structured credits’ Authorised Financial Advisers (AFAs) are required to complete under the Code of Professional Conduct.

Wednesday, April 13th 2011, 7:12AM

IFA chief executive Peter Lee said that at present no standards or definitions exist for continuing professional development (CPD) or the structured credits under Code Standard 18 of the Code of Professional Conduct.

Only Qualifying Financial Entities (QFEs), delegated assessment organisations and professional bodies can issue structured credits.

"The Securities Commission says the Code is a principles-based regime and therefore interpreting the Code is up to these organisations. However, we feel it is important to provide a standard benchmark for the provision of these credits," Lee said.

He said the IFA is to create some definitions for structured credits and would like to work with other bodies on the initiative.

IFA has been in talks with training organisation ETITO and is aware other course providers are to issue their own definitions.

"The problem is that the industry runs the risk of having several and varied definitions of structured credits," he said.

"We feel it would be more appropriate if we could all sit down at the one time and thrash out ideas to ensure all parties can agree."

The Professional Advisers Association (PAA) chief executive Edward Richards agreed that it is important to have some standards around structured credits, and also cautioned about the bodies issuing them.

"The reality is that structured credits are not readily available, and nor should they be. There's more formality attached to them and I think that it's quite conceivable that some organisations out there in the financial services marketplace are claiming that they can issue structured credits when in fact they can't," he said.

Edwards said he also believed standards around structured credits should not become too prescriptive.

"I think it's important we keep it principles based. The reason for this is not because we don't want standards, but because there are different business models and different educational provider models out there and I think it's important we don't have one set of spectacles on how we view structured credits," he said.

"If we go and prescribe too tightly what a structured credit is we could limit the way by which advisers can actually earn them and that's not necessarily a good outcome."

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