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Alistair, many thanks for your consideration of the key issues and for the opportunity to respond. Where we haven’t fully covered any of the questions below in our Q&As we will now ensure that they are added so that all members can be fully informed as they review this proposal. If it isn’t obvious from the answers below, I would like to state that despite your fears, the decision hasn’t been made to go ahead no matter what the feedback from member’s is, the Board genuinely want to hear what members think before making a decision.
The Board are primarily practitioners, CFP professionals and long term members of the IFP, and have the same concerns as every other member about continuing the unique focus, community and culture that exists within the organisation. This proposed merger is about protecting that culture and focus and also enabling the next stage of the growth of the profession and I hope that is reflected in my response to your questions below…
The letter talks about a partnership, then a merger, it seems more like the CISI are taking over the IFP, which is the case? IFP would become part of the CISI operating as the Financial Planning Professional Forum, retaining its brand, and operating with a committee consisting of the members of the IFP Board at the date of the transfer. Members of the IFP forum committee would serve on all key committees within CISI including a position on the Board of CISI.
Up until recently the level 6 qualification was a financial planning-led case study, often completed at a two-day residential course; meanwhile the CWM qualification is 3 exams (representing a supposed 200 hours each) on Financial Markets + Portfolio Construction Theory + Applied Wealth Management; given the very different nature of the topics why is appropriate to offer CFP to CWM’s and vice versa? There are a number of different points made here which I will answer, however the key principle is that we are talking about the CWM designation that will be offered rather than the CWM qualification. The designation requires elements including relevant qualifications and CPD, and IFP’s historical requirements on the latter were in excess of the CISI requirement. The level of work involved in completing the CFP certification qualification is substantial. The fast track course that IFP previously ran was a four day course and from talking to those who took that route it involved working day and night and a substantial amount of preparation. In terms of designations many members of the IFP use the title Wealth Manager even though they deliver Financial Planning and I’m sure there are plenty of people delivering Wealth Management who use the title Financial Planner.
A number of members of the IFP would join due to it’s smaller, more personal nature, why is there an assumption that “growth” is such a high priority? The IFP Board strategy is led by the strategic mission which has always been to ‘grow the profession of Financial Planning in the UK for the benefit of consumers’. The strategic review completed in 2014 concluded that we needed to accelerate momentum from organic growth in order to deliver the mission. With environmental changes including RDR and pensions freedoms, allowing more consumer’s access to real Financial Planning is more important than ever. The Board have looked for an option that delivers growth with integrity and believe that the merger with CISI provides the best opportunity available. While the IFP is growing stronger financially and has record levels of P&L and cash reserves, these aren’t projected to be at the levels that allow for significant investment in growth for several years. The reality is that a substantial proportion of the IFP’s income comes from exhibitors and sponsors which means that developments such as the FCAs inducements paper in 2014 can put a significant strain on finances. IFP remains one of the best kept secrets in the industry, and while many members have found us over the years we can support many more but only if they get to hear about us.
Other than the option to convert a CFP to CWM, can you elaborate on the “greater support for members going forward”, specifically in the Financial Planning space? Firstly let me clarify that we are not intending to convert CFP professionals to Chartered Wealth Managers as CFP certification and the CFP professional designation would remain a key part of the IFP proposition within CISI. We are saying that as part of CISI membership, members would have a CISI membership level and that those joining as CFP professionals will be considered to be at the Chartered membership level within CISI. There would be a greater range of CPD and events available much of the content of which will be applicable to Financial Planners. We would work on developing an appropriate L4 qualification which builds towards the CFP certification in terms of its understanding of and reference to Financial Planning. There will be greater promotion of Financial Planning via the increased marketing resources available within CISI.
A number of IFP members are passionately opposed to the ideologies of DFMs, Wealth Managers and Investment Banks, in particular the supposition that active management may provide superior returns to passive strategies, what will the current IFP board do to nurture these established members’ views? IFP members are aligned around a Financial Planning principles and the IFP is agnostic and will continue to be agnostic to the investment solution followed. As I understand it, a number of the IFP Board members subscribe to similar beliefs described above, however it must be noted that according to the last survey we completed c.70% of members do use active investment solutions. Therefore I expect the IFP Board to ensure the focus remains on Financial Planning. The Financial Planning focused events, qualifications and designations will all continue, including the IFPs flagship Annual Conference and the well-established Paraplanner Conference. One of the reasons that CISI have a commitment to Financial Planning is that there is demand from their traditional members to build Financial Planning skills and capabilities, and so we hope to be able to influence all existing members of the CISI and ensure that all viewpoints are heard.
The suggestion is this is a proposal, what are the criteria to be assessed on the 4th September that might mean: a. further consultation is required or b. the proposal is abandoned? The Board is recommending that this proposal goes ahead but wants to gauge the support within the membership and to ensure that all key aspects required to protect members interests are covered in the final agreement should the merger go ahead. All responses to the consultation@financialplanning.org.uk mailbox are being recorded; the webinars and face to face meetings will all be asking for member’s feedback and this will also be recorded. If there is not found to be support for the merger in its current form then the Board will consider if this is because of a fundamental issue that cannot be resolved, or whether it can be addressed by further discussions to take into account any new critical factors. If the latter then the Board will consider further consultation.
Will the existing CFP qualification route continue to be available? Yes absolutely; this merger would only be possible with the complete support of FPSB who oversee the CFP certification standards globally.
What guarantees can be offered that what is currently the IFP will not be abandoned or side-lined by the CISI; in particular the watering down of the current Financial Planning magazine, branch meetings focused on Financial Planning (not investment management), and annual conferences? All of these areas have been discussed in detail and any agreement would be subject to contractual obligations. For example CISI have agreed to continue all of our current events, and would take over our contract with Celtic Manor for the Annual Conference 2016. Most Branches would continue as they do presently but where there is an IFP and CISI branch in the same location we would look at how they could be amalgamated. In any amalgamated Branch we have a commitment that the majority of content would be Financial Planning related.
Why has a similar consultation (at the time of writing) not been extended to CISI members? As we understand it this is because there is no governance or proposition change impacting CISI members.
What is the position with other candidate bodies, the obvious one being the PFS, which, since 2005, has offered the Chartered Financial Planner designation and would seem to have more in common than an investment-led body? As I understand it the CII is the body that offers the Chartered Financial Planner designation, but if I can take the question to mean CII/PFS, I can confirm that we completed a review of the entire strategic partner criteria IFP identified across a range of potential partners, and the preferred candidate that emerged was CISI. Once we started the conversation with CISI and discovered they had identified Financial Planning as a strategic need themselves the partnership conversations started in earnest. In summarising a long and exhaustive process I would say that CISI became our preferred partner due to the brand and cultural fit, a commitment to and recognition of the importance of true Financial Planning, acceptability to FPSB in continuing the CFP certification licence, and a strong base for Financial Planning growth. It became clear from our analysis that the IFP had a distinct choice; to choose to partner with a competitor already established in the marketplace, delivering ‘similar’ services to the same audience or to choose a complementary partner one who understands the importance of CFP certification, who can broaden the audience for its services and who can open a network of new professionals for membership growth.
Steve Gazzard CFP, Chief Executive, IFP