Financial Planner: Simon, the IFP-CISI merger took place on 1 November, which was clearly a momentous event for both organisations. How have the first few weeks of the merged organisation been going?
Simon Culhane: It’s been an extremely busy few weeks. As you can imagine, assimilating and reconciling individuals’ membership data, qualifications, history, past membership and firm information is a huge process. These are the nitty gritty tasks which are critical to the smooth future management of the CISI membership offering for our new Financial Planning members.We’ve also focused on ensuring that the Financial Planning events schedule is fully up and running. Continuing professional development events covering Financial Planning topics have been run in London, Isle of Wight, Essex, Northern Ireland, South Wales, East Anglia and Surrey. We’ve also launched our first Professional Refresher in Principles of Financial Planning. Our Professional Refreshers are online learning tools which help members remain up to date with industry developments.
FP: What is the main purpose of the merger and how have members of both organisations reacted so far? What are the next steps?
SC: The CISI membership and Financial Planning community have a lot in common: both are highly regarded in their fields of expertise, working for members of the public. It is no secret that the advice industry is changing. Therefore the strategic importance of the Financial Planning pathway, to help address the financial needs of both those saving and accumulating and those older generations looking to manage retirement and decumulating, is heightened. Despite Financial Planning being at the cutting edge of the advice industry and IFP members being at the very top of their profession, the CERTIFIED FINANCIAL PLANNERTM (CFPTM) professional designation in the UK was not growing. The key aim of the merger is to grow Financial Planning, and that means both the qualification and membership. There are a considerable number of Financial Planners who belong to other bodies and we want to show them that we are their natural home and provide relevant CPD and benefits for them.
FP: The Financial Planning profession may not know too much about yourself. Can you tell them a little about your background and experience and how you came to run the CISI?
SC: I was appointed CEO of the Chartered Institute for Securities & Investment in May 2004, having previously worked with a number of blue chip financial companies and in Central Government. My previous role was at Deutsche Bank where I was Director, Chairman’s Office, Global Investment Banking (also see biography).
FP: What do you see as your main achievements so far at the CISI and what do you hope to achieve with the IFP membership and the Financial Planning profession?
SC: When I joined the CISI in 2004, the country and the financial industry was in recession. As a result, our P&L was full of red ink and our balance sheet was shrinking fast. Over 95% of our business was in the UK and we had a training arm that competed against other providers and was losing money. Over the years, we have followed a clear strategy, to focus on our areas of expertise, enlarge our markets through overseas expansion and create a focused, high quality team. This has allowed us to expand and grow our business, both in the UK and globally. Now 70% of our business is in the UK and our aim is to reduce this to 50%. Our overall aim is twofold. We want to grow the Financial Planning market and attract existing Financial Planners to our institute, encouraging aspiring planners and others to become CFPTM professionals. We also want to grow and educate the consumer to appreciate and understand the value of engaging with a CFPTM.
FP: You’re on record as praising the high standards and integrity of CFPTM professionals. What are the key differences between Chartered Wealth Managers and CFPTM professionals? Do you see the two designations eventually merging or remaining as distinctly separate?
SC: Business models are changing. Wealth managers are hiring and integrating qualified Financial Planners within their teams, so that they can provide their clients with full financial advice as part of a wider Financial Planning service and not just be limited to discussing investment options. I see the CFPTM designation and Chartered Wealth Manager title therefore remaining a separate, but a powerful combination.
FP: Can you tell us more about the new Level 4 Financial Planning qualification planned for 2016?
SC: We currently offer a Private Client Advice unit in our Level 4 RDR compliant qualification, the Investment Advice Diploma (IAD), which advisers on retail investment products take as part of the qualification. Private Client Advice is a written examination which is offered twice a year. In 2016 we propose to augment the content of the Private Client Advice unit with the content of the Principles of Financial Planning unit which forms part of the Certificate in Paraplanning and the Diploma in Financial Planning. These two units already have substantial overlap. We hope to examine the new unit by computer based testing, which will increase its availability.The new unit in Financial Planning will be at Level 4, and will sit in the IAD, and still cover the necessary content for retail advisers, when combined with the core units UK Regulation and Professional Integrity and Investment Risk and Taxation. Candidates taking the Investment Advice Diploma and the new specialist Financial Planning unit will also gain the Certificate in Paraplanning. Candidates who do not need the full IAD, and who pass the Financial Planning unit, and the CISI’s unit Taxation in the UK for Individuals and Trusts, will gain the Certificate in Paraplanning.
FP: Despite its success and influence, the IFP faced a number of challenges, including lack of resources, a relatively small membership and substantial competition. How will the CISI merger help tackle those challenges?
SC: Our primary philosophy is to take the best of what works from both organisations, nurture and improve links already in place. Our coming together widens the choice of qualifica-tions and pathways available to all members, extending the opportunities for them to develop their careers across the industry. It also provides greater resources. We are currently harmonizing a number of policies, one of which, sponsorship with the IFP, has been particularly successful. However, it has also meant that, at times, it has been difficult for former IFP branches to put on educational CPD events if they haven’t been able to find a sponsor. The CISI events are all funded centrally and we will now provide funding for all events. This will cost around £20,000 but ensure that the focus is on the quality of the content and not the size of the sponsor’s pocket.
FP: Some IFP members were hesitant about the merger, fearing the organisation would be swallowed up by a much bigger body. How are you addressing those concerns? How will you retain the ‘spirit’ of the IFP?
SC: IFP members are not shrinking violets. A membership body is by its very nature a living, breathing entity. Our new Financial Planning community is notable for its dynamism and we have created a new professional forum dedicated to Financial Planning and governed by the former IFP board. We are also continuing with Financial Planner magazine and conferences, as well as ensuring the IFP logo is on all membership cards. But, this is not about simply recreating what was there – we haven’t merged the IFP with the CISI simply to continue on as before. We will improve, we will change and we will be stronger.
FP: How do you see Financial Planning developing in the UK and how will the CISI be at the heart of this?
SC: The future of Financial Planning in the UK is bright. Pension reform plus added longevity means the population requires considered, professional and affordable guidance in the area of Financial Planning. We will ensure that the Financial Planning community’s voices are heard loud and clear.
FP: In five years, what role would you like to see for Financial Planners and the Financial Planning profession? Do you see numbers of planners changing?
SC: In five years’ time, we want to see a fivefold increase in the number of planners taking exams and a doubling of the number of qualified CFPTM professionals.
FP: Many experts are talking about robo-advice as one way to fill the advice gap, and some Financial Planners are showing interest in this area. What do you see as the future of robo-advice and what role do you think planners and Chartered Wealth Managers will play?
SC: I see robo-advice as a growth market, particularly as the wealth advice gap has increased. However, as the market is also increasing, the demand for high quality financial advice will also enlarge. I see a polarisation of advice, with robo-advisers catering for the wider market, but financial advisers continuing to offer a highly personal and bespoke service.
FP: What do you enjoy doing in your spare time?
SC: Christmas is a particular favourite time as that’s the only time in the year when everyone stops using email and enjoys family time. Otherwise, I’m an active supporter of AFC Wimbledon and I enjoy sailing and playing tennis.