CII sets out roadmap to enhance professionalism in its RDR submission

10 December, 2007

The CII Group has called for an effective professional framework to complement the FSA principles-based regulatory regime and to improve standards in the industry for the benefit of all advisers and the consumer.
In its submission to the FSA Retail Distribution Review (RDR) published today, the CII Group has set out proposals and a road map towards enhancing professionalism of the retail financial services sector in the public interest.  This includes proposing a single independent professional standards board, a package for professionalism supporting the sector to prepare for the change, and a series of measures to enhance professional standards.
The submission builds and brings together the ideas developed in its five position papers published over the last two months.  The views are also backed up by two major CII/PFS member surveys published in October and November.

The proposals we have developed aim to improve levels of professionalism not only through increased standards of qualifications but also through a step-change in behaviour beyond simply passing exams.  These include:

• the concept of tiered professionalism and a framework that works to improve standards across the existing distribution sector;
• the creation of an effective professional framework to complement principles-based regulation.  This includes a single independent professional standards board, with complaints handling and disciplinary functions. This would be supported by the retail financial services sector, the regulator and strengthened professional bodies; which would create, oversee and develop professional standards including continuing professional development; 
• a professional approach to the identification of conflicts of interest that promotes transparency, managed by the professional standards board;
• a standardised financial services qualification framework to simplify what currently exists and to improve the public’s understanding and confidence in dealing with adviser qualifications and designations; and
• a ‘package of professionalism’ that is intended to drive a step-change in standards of qualifications and behaviour to be implemented within a realistic timeframe.

Dr Alexander Scott, CII Group chief executive said, “The CII’s message to the FSA is that if the RDR is to succeed, it must have at its heart a real step change in professionalism.   We believe this to be a vital component in any process of change – but we accept it is only part of any package of reform.

“If the RDR is to achieve its objectives of building trust and confidence in the sector and to expand the market, then this is a journey we must embark on with well developed solutions.  We look forward to the next stage of the process.  Our work to develop our proposals for professionalism and a reformed professional body model will continue, as will our efforts to develop practical measures that help our members and firms manage the transition to the new post-RDR era of professionalism. Many are already embarking on this journey to increased professionalism and we will support them on their way.”
Lord Hunt of Wirral, President of the CII, said, “As the leading professional body involved in the sector, the CII believes the industry can unite around the need for enhanced professionalism. Whatever RDR package emerges in 2008, it is vital that it works in the public interest and not seen to be self-serving for the retail distribution sector.  The ultimate prize must be more engaged customers who feel greater trust and confidence in the sector.”

FOOTNOTES:

1. This is the CII’s response to the FSA Discussion Paper 07/1, published in June 2007, on the Retail Distribution Review.  The discussion paper is available on the FSA website at http://www.fsa.gov.uk/pages/about/what/rdr/index.shtml. 
2.  This response from the CII follows a series of position papers published over the past two months: ‘A professional body for financial services ?’ (3 October); ’Alphabet soup – simplifying qualifications’ (8 October); ‘Managing the transition’ (8 November); ‘Managing conflicts of interest’ (29 November); and ‘Building Trust and Confidence in Financial Services: A New Professional Framework’ (6 December).  All are available to download at www.thepfs.org/positionpaper.

3.  The response also reflects several surveys conducted by Ernst & Young for the CII.  The first, published in October, reflects the views of 800 PFS and CII Life & Pensions Faculty members; the second published in November had 1300 respondents.  Details of both surveys are also on the PFS RDR website: www.thepfs.org/positionpaper.

4.  The CII participated in the FSA RDR professionalism and reputation working group and has since played a key role in the ensuing debate.  It commissioned and published a comprehensive research report by Deloitte and Touche entitled Professionalism and Reputation which was reflected in the FSA discussion paper.  For access to this paper, along with general CII commentary and work around enhancing professionalism, please go to http://www.thepfs.org/rdr

Editors notes - The CII

The CII is the world’s leading professional organisation for insurance and financial services. It maintains the professional, ethical and technical standards of the industry.
The CII works with corporate business to develop organisation-wide solutions for ensuring ongoing competitive advantage through technical and professional competence of employees at every level. Individually, the CII’s members commit to continuous professional development, though learning and examination, to maintain their professional standing.

Its 90,000 members in 150 countries make up the largest professional body in the financial world. As a society, we all rely on professionals to maintain accurate and relevant knowledge and to give appropriate and unprejudiced advice. The CII ensures that we can trust in the competence and conduct of insurance and financial services professionals the world over.
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