Video explains how the financial regulator and professional institutes ensure financial advisers keep their knowledge up to date and issue a yearly Statement of Professional Standing certificate. Ask your financial adviser for a copy.
"Hello there. The subject for my video is the S P S the Statement of Professional Standing.
To be a financial adviser, to offer financial services advice, we are required to be authorised by the Financial Conduct Authority, the regulator, or alternatively some European firms may ‘passport’ their financial advisory services from France or Germany or Ireland Spain et cetera into the United Kingdom if they are authorised in those countries but I'm concentrating here on the professional standards of UK-based financial advisers.
So just very quickly, the regulator stipulates: to give financial advice you must quote a fee. So I’ll make that distinction: financial advice you must be quoted a fee, non-advised sales: the financial company, where they don't give you any advice and they just supply you with details of the product and you buy it, they can still take full commission. So that’s a quick distinction between financial advice and not.
Now moving on in terms of the requirements at be a financial adviser. You are required to have at least what is known as level IV qualifications and I suppose really [sort of] to put a handle on this level for financial advisory qualifications: broadly moving up to just below degree level in financial planning terms, in terms of to give you an equivalent education standard: so passed A-levels, O-levels, GCSEs et cetera up to A-level standard and then perhaps above and beyond to get to level IV qualification. [And] then there is also a level VI qualification standard where if you are for example, a chartered financial planner, I am a chartered financial planner, I used to be a chartered insurer when I did my Associate exams for the Chartered Insurance Institute as well.
So to give you an example there: what I have is I am an Associate, I've done my ACII which is a level VI qualification, where there are 11 professional exam credits that I had to achieve via the Chartered Insurance Institute and I suppose really put that is the equivalent of a Chartered Accountant or a Solicitor or something like that in terms of that professional level of qualifications.
Then what we have is Chartered Financial Planner, you can also have a chartered financial adviser, that will depend upon the Institute where the person sat there professional examinations. Personally my professional examinations were sat via the Chartered Insurance Institute and as part of the Chartered Insurance Institute there is the financial planning arm of the Chartered Insurance Institute, so I am a fellow, FPFS, a Fellow of the Personal Finance Society, a Chartered Financial Planner with level VI qualifications.
It may be that your financial adviser may have done their qualifications through the Chartered Institute of Banking, Chartered Institute of Bankers and the subsidiary there, their financial advisory subsidiary there, in terms of the qualification bodies, they may be called Certified Financial Planners. So those are sort of level IV and level VI qualifications that financial advisers, to call themselves a financial adviser and indeed to have have the relevant on-the-job training, that's what we need.
Now the regulator requires people involved in financial advice to also have a Statement of Professional Standing, an SPS. And what the SPS [is] that is a certificate that is issued by a relevant professional body for example the Personal Finance Society where, like I said, I am a Fellow of the Personal Finance Society, part of the Chartered Insurance Institute or indeed via the Institute of Bankers, Chartered Institute of Bankers et cetera. So Chartered Insurance Institute, Chartered Institute of Bankers, both of them will be issuing statements of professional standing.
Now what an SPS is required, is we have to renew our statement of professional standing every year. Now to do that we have to demonstrate to our own professional body that we have continued to maintain our knowledge. So throughout the year I have to maintain my tax knowledge, my pensions knowledge, insurance knowledge, budgets, capital gains tax, trusts, tax law, whatever it might be.
[And] I have to keep a record, it's called a CPD record of continuous professional development. Now part of that continuous professional development may mean what they call unstructured studies for example: reading articles, magazines keeping up-to-date with the news, whatever it might be. But then there is also structured CPD, structured continuous professional development whereby I go on training courses, I maybe run training courses and write training courses myself or indeed these videos form part of my CPD requirements, where I'm continually keeping myself up to date. So for example today: I set myself a task to learn about French Wills, now that may not affect everybody, but what’s that’s continually doing is I'm improving and continuing my professional development.
So we are required and you can ask to see your financial adviser’s SPS certificate, Statement of Professional Standing, if they haven't got one then ask them where it is, why haven’t they got an SPS? Because they’re not authorised to give advice unless they have got an SPS. So that is what a Statement of Professional Standing is: it's a certificate issued yearly, renewed yearly by a professional body such as the Chartered Insurance Institute the Chartered Institute of Bankers et cetera to confirm that they’ve checked that their particular member has continued on a professional learning curve to maintain their knowledge and improve their knowledge ultimately for your benefit to make sure that your financial advice is up to date. So that’s what an SPS certificate is. Thanks very much for watching.”