8th March 2011

Addressing the demands of gap filling

The issue of gap filling is contentious. Many advisers may have worked hard to complete their professional exams or achieve Institute of Financial Planning (IFP) Certificate in Financial Planning (CFP) status and the last thing they need before the retail distribution review (RDR) implementation deadline is a changing game. It may be a jolt to discover that in spite of your extensive experience, knowledge and expertise, you still have a multitude of gaps to fill.

But while it may seem irritating to many advisers, there is a certain logic why gap filling supports RDR objectives.

The FSA first published a list of appropriate qualifications in December 2009. The Financial Services Skills Council (FSSC) then developed the exam standards which resulted in revised qualification lists. Qualification gap fill arises from the difference between the even earlier 2004 exam standards and those confirmed in 2010.

Why make advisers holding appropriate qualifications, often the very advisers who were first out of the blocks, take more exams? Gap fill and structured continuing professional development (CPD) could be the solution.

The annual Statement of Professional Standing (SPS) dictates that advisers need to prove they subscribe to the new standards. Certain trade bodies are accredited to issue the SPS and in so doing, check that advisers also meet the CPD requirements. So this is not just about a deadline, it is ongoing and supports the reputation of the industry, alongside other professionals. It’s important that consumers realise the value of this approach and what’s in it for them, otherwise it will feel like box ticking rather than gap filling for advisers.

There are now 21 financial services, regulation and ethics gaps that were not covered in previous examinations, but that were part of trade bodies’ codes of behaviour. This formalisation means most advisers will need to fill these gaps – and can look to a range of outlets to help meet their needs, from publishers to trade bodies to product providers.

Attending presentations is a proven way to enhance your clients’ experience as well as your business performance. Many advisers opt for this face-to-face gap filling, reaping the benefits of seeing a subject being brought to life.

It’s important to be efficient in your record keeping and your gap filling approach, too, because it’s not just about certificates, but about the strength of a process and attendance trails that provide evidence quickly and simply to those conducting checks. For those who believe there is still ample time remaining, it is still sensible to at least plan your calendar now. You may find that more time is needed than you first thought.

In future, the FSA will likely require independent advisers to understand complex investments (structured products and unregulated collective investment schemes) despite there being no qualifications relevant to the products. Gap fill might evolve as a way to achieve this.

J.P. Morgan Asset Management Academy
To help you and your firm prepare for the potential effects of the RDR, the J.P. Morgan Asset Management Academy have put together a series of half day sessions covering gaps identified by the CII.

The J.P. Morgan Asset Management Academy gap filling sessions will cover:

• Session one (Q1 2011): 100% of Financial Services Regulation & Ethics, 33% of Investment Principles & Risk.
• Session two (Q2 2011): 67% of Investment Principles & Risk.
• Session three (Q4 2011): covering other regulatory changes that may occur in 2011.

To register for gap filling sessions, or other Academy events including workshops for IFAs, Paraplanners and R02 revision sessions, visit www.jpmorganassetmanagement.co.uk/adviser/academy

The information provided is for independent financial adviser use only and not for use by or onward distribution to retail investors.

The opinions expressed are those held by J.P. Morgan Asset Management at the time of going to print and are subject to change. Issued in the UK by JPMorgan Asset Management Marketing Limited which is authorised and regulated in the UK by the Financial Services Authority. Registered in England No. 288553. Registered address: 125 London Wall, London EC2Y 5AJ

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