The professional body is proposing a model called STAR - Standards of Training, Accreditation and Revalidation. It believes this could form a confidence-building foundation through which the market could deliver any existing and new advice models.
Details of the plan were released today as the FCA carries out its Financial Advice Markets Review.
The CII laid out what STAR would signify as:
• Standards: setting out what is expected of those firms giving advice or guidance, and what those individuals delivering it would be reasonably expected to know and perform
• Training: to impart and verify the required individual knowledge and competence aspects of the standards
• Accreditation: to confirm that the standards have been attained by organisations in their internal processes, and continue to be maintained on an ongoing basis
• Revalidation: to ensure that those individuals delivering these services are current with the latest developments such as changes to investment and pensions policy, taxation and the benefits system.
The CII said that the “current alphabet soup of advice solutions is bewildering to those working in the sector, never mind consumers”.
With a diverse range of ‘advice’ models being mooted and others still to emerge the need for consistency of outcome and appropriate standards was something that concerned focus groups commissioned by the CII.
The CII said it welcomed the Government’s efforts to make financial advice in its broadest definition accessible to all.
Dr. Sandy Scott, chief executive of the CII, said: “Regardless of what service they are giving, through what channel, and under what label; if the advice is to be perceived as professional by the public, then it must be clear, transparent and above all robust with STAR as its foundation. It’s only by acknowledging the concerns of consumers, particularly around transparency and consistency that the sector can hope to engender public trust and confidence.
“It is not our intention to try to design prescriptive guidance or advice models or express views on the relative merits of each. Instead we wish to explore and understand how STAR could be applied in different broad scenarios. So we have asked consultancy EY to undertake a detailed analysis of possible guidance and advice scenarios that could stem from this review, and then set out how STAR might be applied.
“There's an opportunity for the life sector to play a fundamental role helping people secure their retirement future and we have been actively engaged with firms from across the sector to assess how best to achieve this. We anticipate being in a position to outline more details in the New Year.