Continuing professional development in a financial services organisation: THE ROLE

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Providing advice directly to existing and potential policyholders is subject to the rules and guidelines of the PIA, an organisation established as a result of the Clucus Report. This report stated that there should be a single regulatory authority for the conduct of all forms of investment advice for private customers and the need for this form of robust regulatory approach was highlighted by two occurrences: the Maxwell pension fund affair; and the misselling of pensions, which occurred during the 1980s.

All regulated organisations must demonstrate their ability to meet the PIA’s requirements and work within their regulatory framework in order to keep their ‘licence’ to sell. All regulated advisers and supervisors are subject to PIA regulations and as such are subject to the rules and guidelines on CPD. It is the responsibility of the supervisor to ensure that all advisers are competent in their role and that they retain their competence through a range of related activities approved by the PIA.

The PIA formally recognises two differing needs of CPD: the organisation and the individual. Organisational needs include general changes within the financial services industry such as changes in regulations, products, technology and the organisation’s own internal procedures. Individual needs are viewed by the PIA as specific needs such as updating or improving ‘skills or knowledge in an area with which they are unfamiliar in order to develop into new areas of the market or to take on new responsibilities’.

Wicks refers to the PIA Rules and Guidelines: ‘Continuing Professional Development is achieved by successfully implementing the solution and ensuring that the learning is transferred to the job to enhance performance’. It must be noted that not all activities are classed as acceptable ‘solutions’. The PIA further states that each activity in respect of the individual must be ‘appropriate to his activities on behalf of the [PIA] member and of a standard calculated to maintain or enhance his competence, and approved by such a supervisor’.

The PIA is currently reviewing CPD requirements, but at the time of writing it does not differentiate between structured and unstructured CPD. It recommends that a minimum of 50 hours professionally related development be carried out per year. It also recognises that a variety of activities need to be undertaken in order to meet this requirement and so divides the number of hours that can be counted towards the total from each of six separate categories. It is not enough simply to undertake the activities, they must be relevant to the individual’s performance, which is usually linked and highlighted through schemes of appraisal.

If, on inspection, the PIA finds that its CPD requirements have not been met, it retains the power to remove ‘permission’ for the individual to be active in giving financial advice. The implications of this are extensive. For example, if the organisation were not meeting the requirements the sales staff could be ‘pulled off the road’ resulting in a threefold loss of business, significant costs for retraining and damaged public credibility in an area extremely sensitive to adverse publicity. It is, therefore, essential from a business perspective that the scheme in operation is not only compliant, but that each individual covered by the regulatory framework carries out what is expected of them. The consequences of non-compliance can be significant.


Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

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