BR Guide FINAL 20 Feb

77 WORKING WITH PROFESSIONAL CONNECTIONS 76 WORKING WITH PROFESSIONAL CONNECTIONS More Tips Professional qualifications, memberships of professional bodies and accreditations for financial advisers to consider in order to demonstrate competence and credibility to professional services companies are listed below. The Qualifications and Credit Framework as well as the Regulated Qualifications Framework are used to assess most financial qualifications andmany lawyers and accountants will expect to see evidence of expertise well above the minimum IFA qualifications set by the RDR in 2013. One or more of the following Qualifications and Accreditations may be useful for IFAs: • Advanced Diploma in Financial Planning (ADipFP) (CII) (RQF6) (confers chartered status). • Level 6 in Financial Advice (AdvDipFA) (LIBF) (confers chartered status) (RQF6). • Certified financial planner certification (CFP) (IFP) (QCF4+). • CFA Programme (CFA Society of the UK) (QCF4+). • Fellowship of the PFS (APFS) (CII) (QCF6). • Fellowship of the CII (FCII) (QCF6). • Society of Trust and Estate Planners (STEP) qualification. Professional Body Memberships Professional connections may look for: • CTA (Member of Chartered Institute of Tax). • Personal Finance Society (Associate and Fellowship membership require APFS and FPFS qualifications respectively, each of which is QCF4+). 9. GET CLARITY ON TERMS Ensure the terms of engagement with the lawyer/ accountancy firm are clearly documented. (The legal/ accountancy firm should also share this with the client when a referral is made in order to make clear to all parties exactly who is responsible for what, and who is being paid for what.) 10. ESTABLISH GUIDELINES Ensure that guidelines are in place for when (what wealth eligibility will apply?) and how referrals are to take place, who the main contacts within each firm are and what the charging structure is. 11. SHARE DATA The more data that firms can share with each other, the better they will be able to serve their mutual clients, and by extension win more business. 12. CONTACT THE NEW DATABASE In agreement with the legal or accountancy firm, contact the new client base explaining the rationale for the new arrangement and the advantages of a joined-up legal and financial service. Agree an ongoing marketing programme to drive client awareness and identify unmet financial planning needs. Remember, patience is likely to be required – for legal firms in particular, this is potentially a significant change in their usual practice and will probably require much consideration. 8. DO YOUR OWN DUE DILIGENCE Carry out your own due diligence on potential partners. A good accountancy or legal firm will want to carry out due diligence on the advisory firm before engaging with them and the same is true for financial advisers. The key piece that accountants should have in place is the DPB or Designated Professional Body licence, issued by the ICAEW and the other accountancy membership organisations. This licence means that in addition to making generic comments, when working with a financial adviser, it allows the accountant to explain, evaluate and endorse advice given by an adviser as well as assist in implementing this advice. Consequently, they will be in a position to remain involved in the process, thereby giving any advice a higher value. • Chartered Insurance Institute (Associate and Fellowship membership require ACII and FCII qualifications respectively, each of which is QCF4+). • Chartered Institute for Securities & Investment (including the Institute of Financial Planning which merged with CISI in 2017 (Fellowship membership requires FIFP qualification which is QCF4+). • Society of Later Life Advisers (SOLLA) (full membership requires accreditation of four standards). • SIFA (the SIFA Directory lists financial planning firms which satisfy SIFA’s due diligence criteria for working with solicitors). • STEP (membership is not possible without certain levels of professional qualifications). What to include in a due diligence statement for solicitors and accountants to give to their clients All that is required is a single sheet explaining the qualifications, accreditations, business specialisations and experience of the adviser firm and, in particular, whether it is independent or provides advice on a restricted basis. It could simply be typed on the solicitors’ or accountants’ headed paper, giving the information received from the adviser and should be made available to fee-earners within the law and/or accountancy firms. What structures can be used – informal and formal These connections could be on the basis of making mutually beneficial referrals, or could be formalised using two main methods: Joint Venture (JV): These are relatively quick, easy and cheap (up to £5,000 legal/ IT/stationery/marketing costs) to set up and require no regulatory authorisation. JVs are classified by the SRA Code as Solicitors’ Separate Businesses - i.e. businesses in which solicitors have a financial interest but which do not provide legal services. A common structure is that there is a 50/50 split in the shares of a new corporate entity, the legal/accountancy firm is an appointed representative of the IFA firm (delegating responsibility for FCA compliance to the IFA firm) and the IFA firm retains a larger proportion of income as its management charge, leaving the remainder as a dividend for the other partner. There is the option of using a company or a limited liability partnership for the joint venture, but getting the commitment of all relevant parties in the legal/accountancy firm may be difficult, particularly if it is large and has multiple partners. So, the most successful JVs may be with smaller professional firms or firms with individual specialist departments. RQF Level QCF Level Equivalent to: Notes 1 - 2 1 - 2 Below A Level 3 3 A Level/AS Level/ Level 3 NVQ/Advanced Apprenticeship Minimum IFA qualification pre- 2013 4 4 Components of a Degree/Level 4 NVQ/ HNC Minimum IFA qualification from 2013 5 5 Foundation Degree/ HND/Level 5 NVQ 6 6 Bachelor’s Degree /Level 6 NVQ 7 7 Master’s Degree/Level 7 NVQ 8 8 Doctorate/PhD/Level 8 QUALIFICATION LEVELS the complementary services and added value the IFA firm can bring to the table and be clear about the suggested procedures and protections to avoid and/or deal with potential conflicts of interest and the safeguarding of client bases, while still maximising value from the tie-up.