Adviser > News > May 2010 > RDR ApEx standards
RDR ApEx standards
Clarity on the RDR qualifications and assessments.
The publication on 26 March 2010 of the final Appropriate Exam ApEx standards (if nothing else you now know what ApEx stands for so you've learned something already) by the Financial Services Skills Council was rather overshadowed by the 3 RDR papers published on the same date by the FSA. This article gives a quick overview of the new standards and how they came about.
The Revised ApEx standards
It's worth bearing in mind that the new standards are just that standards which all approved examinations must meet. They are not the exams themselves. These will come from the examining bodies. It does however mean that these bodies are now able to start the design process.
Who's doing what:
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The Financial Services Authority (FSA) - responsible for delivering the RDR, a key part of which is the requirement for a higher standard of professional qualifications.
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The Qualifications and Curriculum Development Agency (QCA) - created the Qualification and Credit Framework (QCF) which sets exam standards in England and Wales (the equivalent in Scotland is the SCQF the Scottish Credit and Qualifications Framework).
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OfQual regulates exam standards ensuring they meet the requirements of the QCF.
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Financial Services Skills Council (FSSC) responsible for setting appropriate exam standards in financial services and updating the existing (QCF Llevel 3) standards to QCF Level 4.
- Examining bodies/providers (such as the CII and IFP) - will create the actual examinations in line with the new standards.
Qualification framework
Method of assessment
The new examinations must test applicants' knowledge in the areas covered by the ApEx standards. The method of assessment is set by the examining body. It could therefore include written examination, multiple-choice1 or oral examination as long as the FSSC are satisfied that the assessment is sufficient to test the knowledge requirements.
Much attention has been given to the possibility of oral exams. These are certainly permitted and a number of exam bodies are looking to provide them. It is worth noting however that the exam standards are the same so this is definitely not an easy option. It is also likely that these exams will be labour- intense and therefore expensive for the exam bodies to provide.
Visit the FSSC website for a full list of the ApEx standards and assessment criteria.
The new standards for retail investment advice will be made up of three elements:
- Core knowledge standards applicable to all advisers
- Advice activity standards applicable to a particular area of business
- Application of knowledge applicable to all advisers.
Core knowledge standards
These represent the minimum technical knowledge that all advisers in the retail investment market must have, regardless of any area of specialisation. It is split into 3 areas:
- Investment Principles and Risk
- Personal Taxation
- Financial Services, Regulation and Ethics
The first two modules are to be expected, the third is entirely new. As such it represents an obvious "knowledge gap" which advisers with existing Level 4 qualifications will have to cover via CPD.
Advice activity standards
These modules allow advisers to choose one of two more specialist routes to the final qualification. For packaged products the options are:
- Pensions and Retirement Planning
- Financial Protection
The pensions module must cover areas such as the HMRC tax regime, State Schemes, Defined Benefit and Defined Contribution schemes and relevant investment issues
A separate route is available for advisers specialising in securities and derivatives.
Application of knowledge
Advisers will also be assessed on their ability to apply their technical knowledge to practical situations. This need not be done by a separate examination but may be achieved by suitable assessment as part of the other exams.
A key difference between the standards expected of advisers sitting the current exams and the new standards is a shift in emphasis from "listing" technical points to "assessing" and "comparing" the different options.
When will the new qualifications be available?
The CII have already delivered an outline of their proposed new RO exams and are awaiting approval from the FSA and FSSC2. Assuming this is forthcoming they expect the new exams will be ready by June. They have also created an alternative assessment option and a diagnostic tool for qualified advisers to map their CPD requirements. Other exam providers will no doubt be looking to do likewise.
Existing qualifications
The FSA have previously confirmed that advisers who already hold a QCF Level 4 level qualification will not have to sit more exams under the new framework. Any areas which have not been addressed may be met using appropriate CPD. So any exams you pass now will not be wasted.
You can switch to the new exams while part-qualified and will still be given credit for the exams you have already passed. Switching to the new exams should reduce the need for CPD top up.
Next steps - Act now
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Don't wait for the new exams to be available, take action now. Waiting will result in one if not two opportunities to get the necessary credits under your belt.
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A good starting point for those who are part-way through the QCA Level 4 qualifications is to contact your exam provider to ask for a statement of your current exam credits and information on what you need to do to achieve full qualification.
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Decide in due course whether to continue with your existing exams (where appropriate) and use CPD top up or to start taking the new qualifications when they are available.
- Holders of existing QCA Level 4 should also contact their exam provider for guidance on the required CPD top up.
Notes:
- The CII have chosen to use multiple choice for 5 of their proposed new exams.
- CII update on the Retail Distribution Review, www.cii.co.uk/pages/financialservices/qualifications/RDR-implementation.aspx
For professional advisers only
