The Society of Financial Advisers (SOFA) is to give more focus to key issues like income drawdown an...
The Society of Financial Advisers (SOFA) is to give more focus to key issues like income drawdown and investment strategy in its training courses.
Peter Williams, Sofa chairman, said there were a number of issues causing concern among financial advisers with income drawdown a key area.
He said: "IFAs have to take a realistic approach with retiring clients. They can no longer default to a particular product."
Issues arising from the growth of alternative income vehicles are cause for concern, Williams said.
He said: "One of the big things that worries me is IFAs' understanding of issues like mortality drag. If you go out there and ask your typical IFA about it, I can not guarantee what answer you would get. That is why we are dedicated to raising the minimum standards for financial advisers."
SOFA is actively pushing for chartered status for financial advisers - on a par with accountants, lawyers and engineers. Another problem may arise when the Government relaxes rules on income drawdown, allowing policyholders to change providers if they are disappointed by the investment performance of their current provider. The change is expected to come into effect from October 2000. Williams believes the change may lead to concern over churning.
As recently as March, 96% of SOFA's professional membership said they would like to see the Society develop a chartered title for financial advisers and planners in conjunction with the Chartered Insurance Institute. The majority agreed that associateship of SOFA should be the level of qualification at which the chartered title should be awarded. To achieve the associateship a practitioner must achieve six subjects in the Advanced Financial Planning Certificate and complete the requisite number of years of experience and continuing professional development.