2017/18

a year in review

From the Chair

In today’s world attitudes and behaviours change much more quickly than they did in the past. Trust in our sector was lost quickly and the rebuild was always going to take time, but I do think we are making progress. It is our responsibility as members of the CISI, consistently to reconfirm the importance of integrity and good ethical behaviour as the foundation stone of that rebuild.

The stability of all the institutions of this country has never been more important than it is now, as we navigate our way through a highly populist and even nationalistic world. Nationalism is an easy sell. Easy to see its attractions… easy to ignore its dangers. It travels hand in hand with protectionism, which is another place we don’t want the world to go to.

On social media, some people today seem to be able to lie with impunity. It seems there is no longer any retribution for somebody who lies. Maybe they wouldn’t if they weren’t anonymous. Even social media companies have done too little to discourage hideous behaviour by some of the few. Let’s hope we come to our senses soon.

There is, however, a silver lining. There is some evidence that people are beginning to realise that ‘false news’ and ‘false prophets’, if believed, undermine their own credibility amongst their peers, and the demand for good quality, informed commentary is rising rapidly.

As I write, we still do not know whether it is going to be a soft, hard or no-deal Brexit, but one thing is quite certain, as far as the CISI is concerned, it does not change the integrity and professionalism platform which we promote.

We are grateful for the determination and boundless energy of the management team at the CISI and the enormous contribution we get from those of you who work, voluntarily, so hard to make sure we stay relevant. We are continuing to increase our global footprint and I commend everybody to read Simon’s statement at the beginning of this report.

This is my last report before I hand over to Michael Cole-Fontayn at the AGM in October. I have been very proud to be your Chair and I would like to thank you all for the support you have given me over the past nine years. My particular thanks go to the Board and our Deputy Chair, Alan Ramsay, who is so much better at doing those things that I don’t do.

As I said at the beginning of my statement, the world has rarely looked more uncertain than it does at this time. But you can be assured that this Institute will continue to pursue a positive programme to promote integrity and professionalism, both at home and abroad.

Sir Alan Yarrow, Chartered FCSI(Hon)
Chair (Stepped down 10 October 2018)

Chief Executive

The Chartered Institute for Securities & Investment (CISI) is a global professional body with a strong UK base. Its 160 staff are spread over ten offices, with the majority in London, and governed by a Board of Trustees.

Reflecting and benefiting from our rich heritage and strong international growth, 2017/18 was a highly successful year.

The Institute saw a major recovery in many areas of operations, especially the UK, where, after the uncertainty, and the general surprise of the Brexit vote, the finance sector in particular proved to be more robust and optimistic than originally feared.

During the year, the Institute offered over 5,500 more exams, welcomed 3,485 new members, was recognised by four new regulators, opened a new office in Africa and returned to a financial surplus of £1,086k for the year.

Purpose

The Institute is proud to be both a Chartered Body and a charity which allows us to be an organisation which seeks to maximise its objectives rather than its profits. That is not to devalue the importance of earning a surplus as the Institute receives no public income or government subsidy, but it is not our primary aim.

Being focused on our objectives allows us to consider the longer term and to carry out initiatives which are the right thing to do for our profession and society rather than the most profitable.

Our significant work on Integrity and speaking up and responding to consultation papers are good examples of where we add value.

Much has been written during the year about integrity and trust, with the Bank of England governor, Mark Carney noting that “Trust arrives on foot and leaves by Ferrari”.

The Institute’s integrity case studies and guidance has been particularly well received during the year, especially internationally, as many countries grapple with how they can help their financial sector regain public trust. During the year over 10,000 people participated in our Integrity at Work seminars and we remain the only professional body in the world to require new members, and those taking some of our capital market exams, to take and pass a unique integrity test. The number who have done so topped 50,000 in the year.

The reason the Institute focuses on trust and integrity is that finance in general, and our area in particular, depends on it. People buy from people and if there is no trust, there is no transaction.
Trust is one of the three legs of being a professional. The other two are having the right knowledge and the right skills, which together define what it takes to be considered a professional.

Qualifications

The acquisition and assimilation of knowledge is one of the Institute’s key strategic goals. We aim for CISI qualifications to be recognised as the global benchmark for wealth managers, financial planners, capital market, compliance or operations professionals. We were delighted that regulators in Qingdao (China), Estonia, Latvia, Lithuania, Labuan and Turkey recognised our qualifications during the year. Our strategic goal is to gain recognition in 60 countries by the end of 2020, and we are on target to do so, with 47 so far.

The recognition in Qingdao (which is rapidly becoming the prime area for wealth management in China) was accompanied by a decree from the municipal government, awarding anyone who achieves the CISI Chartered Wealth Manager qualification an automatic 10% salary rise.

In terms of number of qualifications taken, there was better than expected (and welcome) recovery in the UK, where the number of examinations taken rose 10% to just over 25,000.

There was also significant growth internationally, with over 16,200 exams being taken, which is more than 30% growth on the previous year, helped especially by the growth of our Fundamentals qualification in both South Africa and India.

Read the Chief Executives full message in the downloadable report

Simon Culhane, Chartered FCSI
Cheif Executive

Click each marker for more information

International

Europe

MiFID II has dominated the European agenda, and we now have a comprehensive offer meeting the requirements set out in the ESMA knowledge and competence guidelines for both information providers and investment advisers. This had a particular focus in Spain where we worked closely with a number of banks and other organisations to help make their staff MiFID II-compliant. We also took part in numerous events across Spain on various topics, including MiFID II and fintech.

Developing professionalism has remained high on the agenda for the Cypriot Regulator, Cyprus Securities & Exchange Commission (CySEC), with over 1,500 exams being taken in the past year, a significant increase on the previous year. With the support of our National Advisory Council, we have strengthened CISI’s relevance beyond initial exams by producing Cyprus specific elearning modules and holding local CISI events aimed at providing CPD, networking opportunities and a forum for senior leaders. Our membership has more than doubled to nearly 200 members, and we are confident that this will continue. We were delighted to hold our second annual dinner in March 2018, in partnership with CySEC.

In Malta, we are pleased to be recognised by the Malta Financial Services Authority, and have partnered with IFS Malta to promote qualifications and career progression through CPD and membership opportunities. In April 2017, CISI gained regulatory recognition in Estonia, Latvia and Lithuania in a joint initiative with the Baltic Financial Advisors Association (BFAA). CISI’s qualifications, International Introduction to Securities and Investment and International Certificate in Wealth & Investment Management, are endorsed as equivalent to local licencing exams for investment information providers and investment advisors.

In May 2017 we ran a highly successful ATPs day for our European and North African ATPs in our London offices. This was an opportunity for our international and UK based ATPs to come together to discuss best practice, with presentations and discussion on learning methods, training programme structures and standards for ATPs to maintain.

Our dual-language English-Russian workbooks, funded by the UK Foreign & Commonwealth office and the British Embassy in Moscow, were distributed in autumn 2017 to more than 15,000 Russian school students across the country. This was one of the biggest financial literacy programmes ever conducted by a global professional body. The 170 finalists of the Financial Olympiad went to Moscow in late March 2018 as guests of Bank of Russia, with which we have built a sound relationship in recent years.

KE Kairat Kelimbetov, governor of the Astana International Financial Centre in Kazakhstan, signed a wide-ranging agreement with the CISI in November 2017 to deploy a range of qualifications for the opening of the new central Asian hub. These will be brought into effect from the formal launch of the centre in summer 2018.

Africa

Africa has seen very strong growth over the past year, with an increased appetite for our qualifications across the continent, and the CISI is actively partnering with regulators in Kenya, Rwanda, Uganda, Tanzania and Zambia.

In January 2018, the Kenya Capital Markets Authority celebrated the success of their Securities Industry Certification programme, honouring the top performers since the inception of the project. Over 1,500 exams were taken in 2017/18. CISI director of global business development, Kevin Moore, Chartered FCSI, attended the Awards Ceremony, where he ran an Integrity at Work debate. The CMA chief executive Paul Muthaura Thursday said the certification has raised the level of confidence among investors.

This deepening of capacity is central to ensuring our intermediaries are appropriately equipped to structure and advise on an ever-broadening scope of locally available securities instruments, such as asset-backed securities, global depositary receipts and notes and derivatives among others.

Paul Muthaura, CEO - CMA

Our qualifications were adopted as the recommended qualifications by the East African Securities Regulatory Authorities (EASRA) and our inaugural training course was run with the University of Rwanda in Kigali, with the College of Business and Economics providing the testing facilities. In Uganda we signed an agreement with the Uganda Institute of Banking and Financial Services (UIBFS) to train for the CISI certifications.

In August 2017 the CISI partnered with Financial Sector Deepening Africa (FSDA), the Nigeria Stock Exchange’s X-Academy and the Chartered Institute of Stockbrokers Nigeria to offer training in the International Introduction to Securities and Investment exam. This achieved an outstanding pass rate. Nigeria remains a growing region for membership and we are pleased to partner with two important professional bodies: the Chartered Institute of Stockbrokers and the Chartered Institute of Bankers in Nigeria. Further west, with the support of the FSDA, we have partnered with Agence UMOA-Titres and expanded our portfolio of French qualifications to support the certification programme in the countries in the West African Monetary Union (WAMU).

Middle East

We are working closely with regulators across the region on qualification programmes linked to the licensing of practitioners. We attended a conference in Kuwait, hosted by the Kuwait Capital Markets Authority (CMA) in support of ts integrated programme to serve securities practitioners in the Kuwaiti capital markets sector. The programme comprises a combination of our existing international qualifications and a bespoke Kuwaiti qualification in both English and Arabic. In 2017/18 the CISI was able to offer learning products in a total of seven languages: English, Spanish, Arabic, Greek, Mandarin, Russian and French.

The certification programme in the UAE is now well established, but this year we have also seen an increased appetite for the CISI’s CPD provision. This is partially driven by the regulator – the Securities & Commodities Authorities (SCA) – mandating CPD to certain sectors. With more than 400 members, the UAE now has the highest membership base outside the UK. We put on a number of events for our UAE members with the support of our National Advisory Boards, on a wide array of topics ranging from cryptocurrencies and bond markets.

India

Our work in the education sector in India has increased in importance. We now run exam programmes at Christ University and Jain University in Bangalore, ITM Business School in Mumbai, and others.

We have signed an agreement with the government of Andhra Pradesh to offer our entry level qualifications through GITAM and Andhra Universities, which will support the development of a fintech initiative aiming to attract global banks and corporates.

We have also been delighted to partner with the National Institute of Securities Markets (NISM) on an Integrity at Work programme supported by SEBI, the capital markets regulator.

Sri Lanka

With the active support of the National Advisory Council, we have run an Integrity at Work programme in partnership with the Central Bank of Sri Lanka and a range of local banks, supporting local interest in further developing integrity in the region.

In the education sector we have signed memorandums of understanding with both the National Institute of Business Management (NIBM) and the National School of Business Management (NSBM). This will enable these bodies to offer professional financial services qualifications to local students alongside their academic studies, helping to enhance their future career prospects.

Asia Pacific

We celebrated the achievement of nineteen of the brightest rising stars in global financial services in Singapore in March 2018, recognising their outstanding exam success with prizes awarded in eleven categories, including Islamic banking and finance, combating financial crime, derivatives operations and others.

Myanmar has been a growth story for the CISI, with nearly 250 students sitting exams in the region in the past year. In December 2017 we hosted an inaugural ATP training day with great success. Our ATPs are strategically important, offering training for the next generation of professionals and raising the CISI’s brand and profile in the local market.

In June 2017 we signed a partnership agreement with the Shanghai University of Financial Education (SUFE) to collaborate on the translation and teaching of our International Certificate in Wealth and Investment Management in Qingdao in China. The first cohort of students for our new product, International Certificate in Wealth and Investment Management (Mandarin), performed admirably, and the CISI has gained formal recognition from the Qingdao Municipal Government for our wealth management qualifications.

In the Philippines our focus is on the Business Process Outsourcing (BPO) sector and the education sector reflecting the high demand for a qualified workforce, and over 200 students from Far Eastern University sat our Fundamentals of Financial Services in July 2017. The CISI and the Philippines Securities and Exchange Commission (SEC) have partnered to provide a qualification framework for those working in the capital market sector, with Commissioner Eph Amatong noting ‘The SEC is committed to reforming the current examination system, so it matches international standards, and are grateful for the technical advice given by the CISI.’ We also announced a partnership with the Philippines Institute for Certified Public Accountants during their conference in order to offer a CISI CPD elearning module in International Taxation.

Education

Our Education Trust

The CISI Educational Trust is an education charity established by us, funded through the kind donations of benefactors and by the CISI. The Trust shares the charitable mission of the Institute but uses its funds solely to support educational initiatives in the public interest and for the common good.

The Trust is supporting initiatives in partnership with schools and colleges delivering CISI qualifications, and with university partners.

It supports a number of awards and scholarships aimed at encouraging the highest levels of aspiration and achievement for those pursuing a career in financial services.

Employability is at the heart of what we do

Developing and nurturing the future talent of the financial services sector is at the heart of what we do. Our education development team works with over 40 schools and colleges and 23 universities across the UK to support them in offering CISI professional qualifications to their students.

Our partner schools and universities are supported by us through various careers events, talks and networking events hosted by high-profile financial sector firms. In March 2018, we worked with investment firm A J Bell to host a ‘Get into finance’ student conference, which saw students from schools in Manchester and the surrounding areas taking part in team building, careers advice sessions and speed networking at the AJ Bell head offices in Salford Quays.

Talent Development Programme

We continued to support students through our Talent Development work experience programme and worked with various financial sector firms to access work experience placements for our students over the summer. Over 50 students undertook placements in fourteen different firms, with students from a total of 21 schools benefiting from seeing first-hand how a financial firm works.

Education Trust UK Awards

Our work in the university sector has brought CISI qualifications to students studying at our 23 UK partner universities. An annual celebration of these successes was the CISI UK Education Trust Awards in March, which saw £23,000 prize money awarded to 18 outstanding UK students. Students submitted an article on this year’s hot topic: ‘What is MIFID? Who gains and who loses from its introduction’.

The standard of work submitted this year was again extremely high. Following an assessment of the article by senior members of the CISI exams team, five undergraduate and five postgraduate finalists were invited to an interview and assessment day to compete for an overall award. Members of the Education Trust put the candidates through their paces during a challenging morning of tests and interviews designed to assess their knowledge of finance and investments. One overall winner from each category then received their cash prizes followed by lunch with members of the Education Trust.

Education Trust Global Awards

Working through our CISI international offices, our overseas university partners competed in 2018 to produce an overall winner from each part of the world. The regions competing in the 2018 Global Awards included: Cyprus, Singapore, the Philippines, India, Sri Lanka, Egypt, the UAE and Africa.

Our international university partners selected students to compete for a week’s work placement in London with a financial firm, along with a cash prize.

25th Anniversary Awards

In recognition of the CISI’s 25th anniversary, a new category of awards was approved by the Education Trust. Our UK university partners were invited to nominate an outstanding student to compete for a scholarship to cover their CISI exam fees.

Students achieving the top scores in an online general knowledge quiz won the scholarship, with a total of 23 universities submitting applications from students. All 25 scholarships were awarded, and students will be taking their exams in the upcoming months.

Qualifications

During 2017/18, we continued to develop our qualifications portfolio to meet the needs of our UK and international markets and to support the professional development and accreditation of financial services practitioners.

A new level 6 Certificate in Pension Transfers and Planning Advice was developed, to offer a specific qualification for financial planners or wealth managers working in this specialist area. When combined with a qualification that allows an individual to obtain a Statement of Professional Standing for Retail Investment Products, this certificate meets the FCA Pension Transfer Specialist standards (Activity 11). The first sitting of this narrative exam took place in December 2017, and was well received by the profession.

The syllabus for the level 3 Securities exam was modified to ensure that the content is less UK-specific, giving the exam a more global focus, and the new syllabus was released in March 2018. A number of exams and assessments were developed during the year, and existing exams were translated into other languages, to meet the needs of financial services employers and to satisfy regulatory requirements in different countries.

Russian language versions of the International Introduction to Securities and Investment and Fundamentals of Financial Services exams were released in July and November 2017 respectively, and a French version of Fundamentals of Financial Services was launched in February 2018. We launched a Mandarin version of our International Certificate in Wealth and Investment Management in July 2017, and the first 25 candidates completed the exam early in 2018. Working in partnership with the CII, we launched the Bancassurance award in Africa in December 2017.

To assist financial services professionals in meeting the requirements of the capital markets regulator in Tanzania, the CISI has developed a new Tanzania Regulatory Assessment, which launched in May 2017. Our existing regulatory exams for Cyprus were also revised during the first quarter of 2018 to incorporate MiFID II requirements, ready for release on 1 April 2018.

The CISI continues to work with UK and international employers, training providers and partners, to develop and maintain a robust portfolio of qualifications that reflects the requirements of financial services practitioners in the UK and, increasingly, overseas.

Ethics and Integrity

The past year has been an important year for ethics and integrity within the CISI, with the ongoing implementation of the mandatory ethics CPD requirement. All CISI members must ensure that 10% of their total required CPD target is related to ethics and integrity, and this – combined with the requirement that all new CISI members pass IntegrityMatters – places CISI members firmly at the forefront of demonstrating to the public that they are committed to upholding the highest standards of ethics and integrity.

As ever, we thank our Ethics and Integrity committee for their support throughout the year.

International reach

Our ethics and integrity resources continue to be popular globally. Particular highlights from the past year include working with the Colombian financial services regulator, AMV Colombia, to create a bespoke ethics workbook and bank of 40 questions to be used within their regulatory qualifications, and producing a copy of Integrity at Work in Financial Services Book 5 in Spanish, with a Foreword supplied by Professor Sanchis of the University of Valencia.

IntegrityMatters has also proved to be popular globally. In the past year, 649 members have taken the test in the UAE, 108 in Cyprus, 99 in the Channel Islands, 90 in Qatar, 63 in Sri Lanka, 61 in Spain, 58 in Nigeria, 45 in India, 42 in Ireland and many more in other countries internationally.

Sharing best practice

We have worked closely with external stakeholders to expand the impact of our ethics resources, to reach a wider audience, and to learn from industry experts regarding best practice. For example, in November 2017 we partnered with the Institute of Business Ethics and the Worshipful Company of International Bankers to run a successful ‘Question of Ethics’ event at Cass Business School. We have continued to work closely with our Chartered Body Alliance partners on a series of events and regulatory responses, and have also taken an active role in the Banking Standards Board’s Professionalism Working Group.

Membership

We believe that membership of a professional body enables those working in financial services to demonstrate their commitment to professionalism, acquiring further knowledge, skills and working towards excellence. Our membership offer is crafted from what our members tell us they want and what they value from a professional body.

The past year saw the biggest growth in international new members of 25% with us supporting some regulators introducing mandatory CPD.

With the introduction of our mandatory CPD policy, it is of no surprise that our CPD offering continues to be highly valued by members. We aim to support those working in the sector to access cutting edge information, to be able to network with peers and to debate and discuss common issues through our local CPD events and our online offering of CISI TV and Professional Refresher.

We thank all those who contribute to our membership and forum committees for their guidance and support (names included at the end of this document).

CISI TV

Our dedicated TV platform is an unrivalled source of CPD for our members. It hosts a wealth of expert speakers, informative events and discussions and interviews. We had over 75,000 videos viewed in 2017/18 and this medium continues to reach new audiences, delivering first-class knowledge and learning to our members.

The Review

Incorporating news, cutting edge content, insights, thought leadership and opinions across a selection of features, interviews and articles, The Review magazine continues to deliver cutting edge content for our stakeholders. 2017/18 delivered some high-profile interviews, thought provoking discussions and sharing of best practice. Thanks to our hard working and knowledgeable Editorial Panel and publishing partner Wardour Communications, we produce relevant coverage of the latest topics directly to our members either in printed or digital form.

Forums & Financial Planning

Forums

The Institute’s nine Professional Forums and two Interest Groups are our platform for providing members of all levels with opportunities to share content, update their skills and network with like-minded professionals.

Each forum is run by its own committee comprising practitioners in the relevant field who work closely with the CISI to identify topics and trends of interest for discussion, for articles in The Review magazine or for planning events. Our Interest Group events are open to non-members and draw in a wide range of professionals who are interested and connected to the financial services sector.

We are grateful to all our chairs and committees for their ongoing support. A full list of those who volunteer their time is shown at the end of this report.

Financial Planning

Our financial planning membership has stabilised in the past year, with the Financial Planning Forum membership now around 2,300. There are various groups and committees including the Financial Planning Forum, Accredited Financial Planning Firm steering group and Paraplanner Interest Group working hard and fully engaged with the CISI to help support and build the financial planning profession.

The CISI Board is fully committed to helping individuals and companies develop their financial planning skills. We have financial planning representatives in most of our network, with six stepping up to take roles as presidents n branches. It is our pleasure to help support the development of relevant content and sessions in the regions.

This was complemented by successful Paraplanner and Annual Financial Planning conferences and the Financial Planning Awards in Hinckley and Newport respectively. Financial Planning Week and World Financial Planning Day were both great successes, showcasing how financial planners give advice. They supported a significant number of the public in developing their understanding of what real financial planning looks like, as well as giving practical help and advice to people in most need.

We have worked in collaboration with our financial planning corporate supporters over the year, aiding their depth of understanding on how different financial planning is to financial advice and helping them develop a more tailored offering for our Financial Planning Forum members.

One area under development is the Diploma in Financial Planning which leads to becoming a globally recognised Certified Financial Planner™ (CFP™) professional. CISI is committed to support the existing assessment process as well as developing improvements in the coming years.

Globally, we support the Financial Planning Standards Board (FPSB) in its expansion of financial planning across the world. We have contributed to consultation papers for ESMA and others in support of this important role.

Our Board of Trustees

Fionnuala Carvill, Chartered FCSI - I,J

Richard Charnock, Chartered FCSI, Chief Executive, Standard Life Wealth - E

Debbie Clarke CF Chartered MCSI - A

Danny Corrigan MCSI - F

Philippa Foster Back* CBE, Director, Institute of Business Ethics - E

David Kane MCSI, Non-Executive Director, Bournemouth University - A,F

Claire Perryman, Chartered MCSI, Head of SPDR, State Street Global Advisors - B,G

Joanna Place*, Chief Operating Officer, Bank of England - I,J

Ravikumar Puranam FCSI(Hon), Independent Non-Executive Director, Financial Services Sector (India)

Alan Ramsay FCSI(Hon), Deputy Chair, CISI and Director, International Property Securities Exchange - A,E,I,J

Clive Shelton, Chartered FCSI, Non-Executive Chairman, Tax Incentivised Savings Association - D

Nick Swales, Chartered FCSI, Regional Director, Rathbone Brothers - C,G,H

Rebecca Taylor CFP™ Chartered FCSI, Managing Director, Aurea Financial Planning - H

Gary Teper, Chartered MCSI, PLC Director, Charles Stanley

Richard Wastcoat*, Non-Executive Director, First State Investments - F,I,J

Martin Watkins, Chartered FCSI, Director, Financial Services, Ernst & Young - H

Andrew Westenberger MCSI - A

Sir Alan Yarrow, Chartered FCSI(Hon), Chair, CISI - A,B,F,H,I,J

The Trustees served on the following committees: A Audit Committee - B Editorial Panel - C Educational Trust - D Examinations Board - E Integrity & Ethics Committee - F International Committee - G Investment Committee - H Membership Committee - I Nomination Committee - J Remuneration Committee. The Trustees, all of whom are non-executive, are elected by the members (except for co-optees who are appointed by the Board) at the Annual General Meeting for a term of office of three years. None of the Trustees had any interest in the company or its subsidiaries.
Frank Moxon, Chartered FCSI Resigned19 October 2017 - Richard Stockdale, Chartered FCSI Resigned19 October 2017 - Debbie Clarke, Chartered MCSI Appointed 19 October 2017 - Danny Corrigan MCSI Appointed 19 October 2017
* denotes a co-opted Trustee