Who shouldn’t hold a professional qualification, in financial services?

Who should hold a Professional Qualification in Financial Services?

New entrants to Financial Services can be forgiven for feeling like they are bombarded with demands to obtain professional qualifications. Unlike other aspects of regulation, the rules on who should have a recognised professional qualification are clear, but there are some who think that they are exempt or that professionals qualifications are not for them. Are there really any compelling reasons why employees should put themselves through the hard work of preparing and sitting an exam?

In short, Yes! To quote Grand Master Oogway in Kung Fu Panda, “One often meets his destiny on the road he takes to avoid it.” And this is true for a number of the career pathways chosen by some new financial services entrants, under a misconception that the role doesn’t require them to undertake professional qualifications. Some examples:

“If I don’t advise retail clients, I don’t need any exams”

Not true, anyone “Giving personal recommendations on investments in the course of corporate finance
business” is required to obtain an appropriate professional qualification.

“Only people who are client facing need to do exams”

Not true, anyone in an operational role who aspires to lead, or supervise a team, is captured by “overseeing on a day-to-day basis” and this includes those who are actively involved the following;

  • Operating a collective investment scheme or undertaking the activities of a trustee or depositary of a collective investment scheme
  • Safeguarding and administering investments or holding client money
  • Administrative functions in relation to managing investments
  • Advising on syndicate participation at Lloyd’s
  • Advising on peer to peer (P2P) agreements

“If I’m managing money and don’t deal with underlying investors I don’t need an exam”

Not true, anyone managing investments has been required to pass a qualification since 2001 – interestingly those in role before this date remain as “grandfathered” in.

Of course there are plenty of other compulsory exam requirements but often overlooked is the need for those who give information to hold qualifications and/or be assessed by the firm. Information giving could be in relation to a firms products, services, costs, charges and even giving the “house view” on markets or managing risk to clients (this can include non-prop Dealers, analysts, research and desk assistants in certain firms). These people are captured by the requirement of MiFID II (2018) to demonstrate their competence through either internal assessment or guess what … a professional qualification. So if your Investment Manager (in place since 1999) is presenting the outlook for their fund performance to an audience or even in a breakfast meeting of intermediaries, that makes them an “Information Giver” and they need to be assessed and evidenced as competent annually.

Add to all of the above – firm specific expectations i.e. Our firm expects those undertaking this role to achieve a higher standard of knowledge that exceeds those stipulated by the regulator (or words to that effect). Firms will make it clear when they have a business standard and what is expected of employees, so in certain instances the firm could have a stipulation to hold professional qualifications for the role or future advancement, so the desire to avoid them may actually be … well, unavoidable.

Similar to Kung Fu Panda we believe that positive ‘carrots’ or dumplings outweigh “sticks” for the following reasons:

  • Career progression is likely to be accelerated if individuals volunteer to go beyond regulatory or business standards. If employees willingness to embrace advancement is not appreciated employees may consider what this is saying about the firms’ culture and commitment to individuals
  • Knowledge is only one part of an employee’s obligation to remain skilled in their chosen role, but it is tangible evidence of commitment and understanding of obligations under the conduct rules which covers all staff
  • All clients (retail or not) expect and demand professionalism in the way they are being dealt with, asking them to rely on “I’ve been doing the job for the years” is getting less likely to cut it
  • Without doubt, the right subject matter expert teaching and coaching employees through the exam pathway will extend their expertise beyond just knowledge – it’s the contextual element that they bring, i.e. how to apply this knowledge to a real life situation
  • Having already taken and passed professional qualifications enhances employees’ CVs and says something to clients about their commitment to the industry
  • Professional qualifications are recognised and listed as appropriate by an ‘awarding body’ and taking and passing exams normally comes with the opportunity of membership to that awarding body. This includes access to industry updates, CPD resources, networking with peers – all excellent opportunities to evidence continued commitment to an employees chosen career and continued competence (something else clients like … after all who would want to get on an Airbus 380 piloted by someone with loads of experience in flying but has never flown anything more advanced than a Spitfire?)

An exam is only testing knowledge at that moment in time, only time will tell if someone can appropriately apply that knowledge, which is why the last point above is so crucial. Learning shouldn’t stop, it’s critical in Financial Services with new asset classes plus Fin- and Reg Tech coming onstream. Clients expect employees to remain at the front of that wave, so passing and extending professional qualifications remains the first step.

In summary all of us owe it, irrespective of the role we play, to the markets and clients we service, to be appropriately qualified and as knowledgeable as we can be.

Here, at ZISHI Cornerstone we believe everyone in industry can find an appropriate qualification to enhance their knowledge and we are passionate about supporting the personal and professional benefits that exams bring.

ZISHI Cornerstone support a wide number of professional qualifications including:

  • CISI qualifications – IOC, IAD, Corporate Finance, Capital Markets, Advanced Financial Planning and Chartered Wealth Manager
  • ZISHI Level 2 – 7 Financial Trading Qualification
  • ZISHI Level 5 Advanced Diploma in Traded Options
  • IMC (UK CFA)
  • CFA I, II, III (CFA)
  • CFA Certificate in ESG Investing AND Certificate in Climate and Investing
  • CII qualifications for paraplanning, financial advice and Regulated Supervision

Contact us
Get in contact at info@thezishi.co.uk today to discuss how we can help.

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