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05 Feb, 2008

Published: 10:45 Tuesday 05 February 2008
By: Iain Martin , Reporter

Financial planners and professional standards bodies have praised the 'manifesto for advice' launched last week by the Association of Independent Financial Advisers, but Aifa's timetable for change has been criticised.

The manifesto's six core principles are the clearest sign yet of Aifa's embrace of professionalism and build on its recent campaign for advice and sales to be clearly separated.

Aifa called for advisers to become better qualified with the aim that 'chartered (or equivalent status) will become the preferred trading style of firms' within 10 years.
But Nick Cann, chief executive of the Institute of Financial Planning, questioned the 10-year delay and said 'three years is more than enough time for advisers to get to the diploma level.'

A spokesman for the Personal Finance Society welcomed the manifesto commenting it was 'in line with their strategy' towards qualification.

Keith Iles, from the JHC Partnership in Harrow, agreed the 'qualification ladder must be drawn up' but was unsure about the timeframe and was concerned about the impact if advisers rushed to take exams

The six principles seek to ensure that:
Professional financial advice is client-focused.

Advisers have an obligation to deliver the most suitable advice in the interest of their clients.

Advice firms should be free to operate commercially in whatever way best meets the needs of their business and clients.

Consumers should be able to obtain fair, expert advice from financial advisers in order to become well-informed about what they need to do to improve their long-term finances.

Providers of financial services and products have an obligation to support the advice market.

Advisers have the right to expect a consistent, cost-justifiable and fair approach to their regulation.

Pensions minister Mike O'Brien MP said: 'This is really good stuff from Aifa. It represents an important step in the debate, setting a vision for IFAs giving advice in the future.'

However, concerns have been raised about the 10-year time frame mooted
Iles said 'For advisers in their late 50s and 60s it is bloody difficult facing exams and running a business.'

Aifa made it clear it wanted to see 'firm first, consumer second sales behaviour' consigned to the history books.

The manifesto made it explicit Aifa hoped advisers will 'move to remuneration models that prize on going client service, recurring incomes and reduce dependency on upfront initial commissions.'

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