One year ago the Institute of Financial Planning (IFP) merged with the Chartered Institute for Securities & Investment (CISI).
In the run-up to the CISI’s 2016 financial planning annual conference, taking place at the same time and in the same place, Newport’s Celtic Manor, as the IFP’s traditional annual gathering, New Model Adviser® polled readers to get a sense of attitudes towards the CISI following the merger.
From the 89 responses to the survey it seems the planner community has cautiously embraced the new body. In particular, many respondents see plenty of opportunities to work with CISI members more inclined towards investment than planning.
However, planners also want the body to be louder on issues that matter to them. The majority of those who responded believe the Personal Finance Society (PFS) has been better at representing planners to the public than the CISI. Many believe the new body has the opportunity to become a more influential voice going forward.
One of the central issues to come from our survey has been a culture clash between the focus of the larger organisation on wealth management and the IFP’s laser focus on planning.
Around 60% of respondants who said they were currently CISI members were IFP members before the merger (see figure 1 above). Of non-CISI members, though, only 7.9% used to be with the IFP.
Among that small ex-IFP group, the two top reasons for not being a CISI member were a lack of focus on financial planning and the cost of membership (see figure 2 below).
Still, a question for the CISI was always going to be whether it could still fly the flag for financial planners. Diane Weitz (pictured), director of Cheltenham-based Ashlea Financial Planning, is chairman of the Cotswolds branch of the CISI. She acknowledged this would be a tough challenge for the CISI.
‘I think the difficulty is there is a cultural difference,’ she said. ‘The IFP was designed to promote financial planning and it hung around the Certified Financial Planner (CFP) qualification.
‘The emphasis of the CISI is more on selling their exams as far and wide as it can. The idea of the merger from the IFP point of view is that it should grow, but there is quite a leap between what a financial planner does and what most of the CISI members, as wealth managers, do.’
The PFS emerged as the most strongly favoured professional body for financial planning (see figure 3 below). Of all the advisers surveyed, 96% were members of the PFS.
Jeremy Arthur, director and chartered financial planner at Oxfordshire-based firm Harpsden Wealth Management, said over the past 12 months the PFS had been proactive about raising standards and education.
Most advisers agreed that the PFS had best represented the interests of the planning community over the past year (see figure 4 below).
Financial planner Jonathan Hill of West Country-based firm Albert Goodman, said the PFS had ‘improved its game dramatically’ over the past few years in terms of the quality of its conferences and continuing professional development.
Jillian Thomas, managing director of Sheffield-based Future Life Wealth Management, said one of the PFS’s key strengths was being able to adapt to the changing regulatory landscape.
‘There are things that have altered and it has embraced change and tried to engage the Financial Conduct Authority [FCA] and bring them into meetings on a regular basis,’ she said.
It is apparent the CISI, as the successor of the IFP, holds an important space in planners’ professional lives. This is perhaps not wholly reflected by the figure showing only 30% of the advisers surveyed held CISI membership (see figure 5 below).
The phrase ‘early days’ is often repeated and although there have been teething problems in the first year since the merger, there is also optimism about the strengths of the CISI.
Jamie Donald, managing director of Sutton Coldfield-based Donald Wealth Management, said his IFP membership since 2009 had transformed his business but believed the larger scale of the CISI could really carry things forward.
‘The IFP organisation was very unique and I learnt a lot from the best practice sharing of fellow like-minded advisers,’ he said. ‘However, I think the IFP in its previous form could only ever go so far.’
Weitz said she was keen to see how the CISI would develop in the next 12 months. But she said she would like to see it tighten up its processes. For example, she said the statement of professional standing (SPS) needed to be issued more quickly.
‘My SPS was due at the end of May,’ she said. ‘I submitted everything but didn’t get it until the middle of June. They need to get that a bit slicker. [At the IFP] we knew all the administrative team really well, knew who we had to write to, and it was done within 24 hours.’
With any change comes opportunity, such as for the investment and planning communities to learn from each other.
Some 82% of the members of the CISI in our survey said they used cashflow planning (see figure 6 above) compared with 64% of non-members. The IFP regarded cashflow as essential to financial planning but it is just one aspect of the IFP’s culture.
Donald said the investment community had a lot to gain from the merger. ‘The investment community could learn a lot from the IFP and financial planning side, particularly as the big danger for the investment-only community is that it is becoming more and more commoditised with the internet and robo-advice,’ he said.
CISI chief executive, Simon Culhane, said over 80% of IFP members had renewed their membership with the CISI. As well as pointing to the success of its conferences for paraplanners and accredited financial planning firms, he said the CISI had seen a doubling in candidates applying for and taking the CFP certification compared with a year ago.
He said: ‘We have launched, and had FCA approval for, our new level 4 financial planning and advice module, the third module of the Investment Advice Diploma, which enables a newcomer to the profession to follow a direct pathway to CFP certification in just three years, using CISI exams alone.’
Looking to the future
Looking ahead, Thomas would like to see not just the CISI, but all professional bodies, wielding more clout when it comes to representing the interests of financial planners.
She said advisers were poorly placed to overcome the big issues of the day with toothless representatives.
‘The biggest issue we have is that of mis-selling and the FCA is out of touch on this and other issues. Professional bodies should be working with the FCA to resolve them.
‘The industry needs to be more assertive. Lobbying is not easy, it is about changing people’s minds. But as an industry we are not good at it.’
Hill wants to see the momentum picked up during the retail distribution review (RDR) to be sustained by the CISI.
‘I want to see them continuing the journey started with RDR. That was a good first step but we need to see that gradual improvement continue. The financial advice market review made the right noises but things seems to have gone a bit flat,’ he said.
The CISI conference, which starts today, will be an interesting test of the organisation’s ability to meet the professional development needs of the financial advice community. Attendees will be looking for evidence of leadership, learning and old-fashioned value for money.
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