Better qualifications = better advice?

Financial advisers are being pushed to improve their qualifications. Seems a good idea, but will it result in better advice?.

If you have a financial adviser, there’s a fair chance that he or she will be studying for an exam of one kind or another. It isn’t all that long ago that advisers were first required to gain a qualification. It was called the Financial Planning Certificate – FPC – and a lot of advisers made a terrible fuss about having to get it. Believe me, it wasn’t hard.

The bar is about to be raised again, and once again there is an argument along the lines of “I’ve been doing this job for 35 years, and I’ve never had a complaint, so why on earth should I be put through all this?”

Part of me has no sympathy with this view, and wants to tell the old timers to stop watching East Enders and get on with the studying. Another part pauses, and wonders what really makes a good adviser. Then I reflect on some of the ones I came across before I came into the industry, and many I have met since.

They have a problem, which is that the regulator is convinced that they are simple sales people. The regulator clearly thinks that what we consumers buy is financial products. And the regulator is wrong. Some of us buy reassurance. We want to be told that we’re doing the right thing. Some of us buy back our own time. We could do more for ourselves but we are just too busy. Some of us buy convenience. We like someone else to keep an eye on things, pull it all together and, from time to time, to tell us where we stand. Some of us buy status. We actually like our neighbours to know that the chap who turned up the other night in the Jag was our financial adviser.

So the first thing an adviser ought to be thinking about when he or she meets us for the first time is what it is that we really want to buy. A good adviser has two eyes, two ears and one gob and if he uses them in that proportion he won’t go far wrong.

But the adviser’s head is full of rules and regulations that are about him, not about us. I can count on the fingers of one hand the number of good listeners I have come across among hundreds, if not thousands, of financial advisers.

So are we all going to get better advice when the person selling us a straightforward ISA has passed all the exams? Personally, I doubt it. Most of the people in the banks and insurance companies that brought the world to its knees last year were brilliant. Most had PhDs from the best schools. They lacked a couple of things that good financial advisers need, that must be learned, can’t be taught, and can’t be tested in an exam room. Common sense and common humanity.

Spare a thought for your adviser and his or her struggles with the studies, but if you’ve a choice between a qualified and a highly qualified adviser, choose the one you think is most interested in you.

Read this article at http://www.candidmoney.com/articles/article71.aspx