Examination Review will strengthen standards of professionalism says FSA Chairman

Speaking to trade unions at the Alliance for Finance Conference 2000, Mr Davies said:

"The position we inherit from previous regulators in relation to approved examinations is unwieldy, inconsistent and confusing for those seeking to demonstrate and recognise the achievement that examinations bring. We have said we do not wish to live with this situation for long and have proposed a comprehensive examination review process.

"We expect the process to result in fewer, possibly tougher examinations. The over-use of designatory letters is an issue which we have identified and will seek to address as part of the review to improve the recognition of qualifications by consumers and the industry. Consumers are certainly confused today by the alphabet soup of qualifications, and the lengthy lists of initials which appear after some advisers names.

Mr Davies also stressed that raising standards in the financial services industry was a shared aim of regulators, unions, and employers to ensure that training and competence is consumer focussed so that consumers get the best possible service. He said:

"The major episodes in which consumer interests have been damaged, shows that poor staff training has often been at the heart of the difficulty. The pension mis-selling episode, the consequences of which we are still grappling with, is a case in point. The root cause has typically been poor training and sloppy procedures.

"It is disappointing that regulatory intervention should have been necessary to secure improvements, and to raise standards in the industry generally. Companies should see a clear incentive to do this for themselves. But the sad fact is that regulators have felt obliged to act, and to incorporate training and competence requirements into their rulebooks.

Mr Davies outlined FSAs approach to raise professionalism through the training and competence regime, including:

• Comprehensive review of Approved Examinations to begin in January 2001;

• The FSAs aim to provide training for FSA staff and firms on training and competence in order to ensure consistency of approach. The FSA will also provide more industry support including helplines and workshops. In addition, a generic Toolkit Template has been produced which trade bodies and institutes are being encouraged to develop to meet the needs of various sectors of the market.
  
  
• Extending the scope of standards for overseers of administrative functions. The FSA plans to retain the concept that the team leaders of the administrative function is the appropriate level of individual to fall within the Training & Competence framework.
  

Notes for editors

1. Draft rules relating to record keeping and transitional arrangements are contained within the Feedback Statement Consultative Paper 60 Feedback Statement to Consultation Paper 34: Training and Competence Sourcebook. The T&C record keeping rules are designed to enable firms to choose the most suitable methods of record keeping for their organisation while demonstrating compliance with FSA requirements.

2. Examinations. The existing examinations applying to the existing regulatory bodies will be harmonised in the future to ensure a consistent set of standards throughout the industry. Over the next few years the FSA (guided by the Training Advisory Panel), together with other outside bodies, including the qualification authorities, National Training Organisations and relevant institutes will consider examination standards.

3. Howard Davies was speaking at The Alliance for Finance Conference 2000, at TUC, Congress House.

4. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; the protection of consumers; and fighting financial crime.

5. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.