Quarterly Consultation (No.30)

Response from the Financial Skills Partnership (FSP)

The Financial Skills Partnership (FSP) is an independent, employer-led organisation, which aims to enhance professionalism and talent for finance, accountancy and financial services across the nations and regions of the UK. It acts as a link between industry, government and education.

We welcome the publication of the FSA’s Quarterly consultation paper, CP11/18, chapter 3, Proposed changes to the Training and Competence sourcebook. The future of a competitive and productive financial services industry depends on providing employers and employees with the skills they need to ensure their competence. We have been successful in the development and review of educational standards in the financial services sector and believe this review should be carried out in a robust and transparent way in order that quality is maintained.

Sarah Thwaites, Deputy CEO, FSP

As a standards setting body, the FSP is recognised by government as the authoritative body for setting objective standards for the knowledge and skills required by the sector. National Occupational Standards (NOS) define the competencies needed for different jobs. When the FSA asked us to develop the qualification standards which underpin the RDR compliant qualifications produce by the awarding bodies, our starting point was firstly to update the relevant NOS. As these are created in partnership with industry practitioners we can ensure that they are highly relevant and appropriate.

As you are aware the FSP continues to maintain a list of qualifications that are relevant to those who are not subject to an examination requirement in TC. This list referred to in SYSC and in order for a qualification to appear here it needs to meet three criteria. One of these is that it must have a relationship with the relevant National Occupational Standards.

List of questions in the consultation

Q3.1: Do you think the examination standards for ‘undertaking pension transfer activity’ need updating, and if so what changes should be made?

It seems sensible that all examination standards are reviewed to ensure that they remain fit for purpose. However the process used to do this is also key if the standards are to reflect the current market place and the skills and knowledge required for the competent application. The previously used approach for updating the standards remains the most robust and justifiable. Practitioners establish the National Occupational Standards (NOS) for the area of activity and these identify what people working in this area need to know and be able to do. Qualification standards can then be developed from these. A comparison can then be made between the existing standards and the new ones to identify gaps.   
 

Q3.2: If the examination standards are changed, how should any gaps in knowledge be addressed?

Awarding Organisations will already be updating their appropriate qualifications in line with tax changes. Also those carrying out the activity will already be subject to a firm specific Training and Competence regime and will have been required to maintain their competence which will include technical knowledge.
It is not clear from the proposals the nature of the continuing professional development (CPD) approach. It would make sense for the CPD to be structured rather than unstructured, especially as the FSA will not have any means of verification. It seems sensible that the firms, who are responsible for the competence of their staff, will be responsible for this process. As with RDR gap fill, will firms be able to rely on previously completed CPD?  This is particularly likely to have been completed for annual changes to the tax regime.

3.3: Do you agree that the level for the examination requirement for ‘undertaking pension transfer activity’ should be set at Level 4?

Through the establishment of standards described under Q3:1, the level of the activities and their assessment can also be established in a justifiable way and the question of whether the examination should be at a particular level  can be decided. The protection element of the RDR standard for example came out at Level 3. This seems a more robust approach rather than establishing the level based on the fact that aspects of the standards are already at Level 4. 


Q3.4: Do you think the examination standards for ‘managing investments’ needs updating and, if so, what changes should be made?

These qualifications have also been measured against National Occupational Standards developed by employers to ensure that they are working towards an industry standard. Therefore we would strongly support the existing means of updating qualification standards, starting with the creation or updating of existing National Occupational Standards (NOS).  


Q3.5: Do you agree that we should include standards on investment principles and risk and person taxation?

The answer to this question would come from the development of appropriate NOS.

Q3.6: Do you agree that the examination requirement for ‘managing investments’ should be set at Level 4?

See answer to Q3:3

Q3.7: Do you agree that any changes to exam requirement should only be introduced for new joiners to the industry, and that individuals already working in a ‘managing investments’ activity should be able to fill gaps in knowledge through CPD?

Individuals may well be able to prove competence, without the need to undertake a qualification. The firm should already be ensuring that they maintain their competence through CPD and here the CP confirms that it should be through structured CPD.