A few weeks, the North American Reunion of University of Oxford graduates was held in New York City at the Waldorf Astoria. It was a two-day affair attended by some 800 people. In typical English fashion, it was a class act all the way complete with what seemed like unlimited champagne and for some unexplained reason, lots of health food items.

At a luncheon, I sat next to a man who did financial planning from a prominent London accounting firm. He advised me that just a week before, the British Standards Institution launched a new standard for financial planning. "It was targeted at ethical behavior, competences, and experience," he said. The aim of the new standard, he explained, is to raise service levels for consumers, but the problem, he felt, is that it would only add to the complicated matter of what should go into selecting a financial advisor in the first place. So, he unearthed some things that a consumer should know regarding such financial advisors. It can equally apply on this side of the pond.

First of all, he said that the financial advisor must have a Certificate in Financial Planning, which is a kind of understatement. Also, it wouldn't be a bad idea to ask what other qualifications the planner has. Actually, that's really a good idea. He did mention that some advisors in England have what is known as a Chartered Financial Planner status, which puts them on a par with accountants. "There are higher professional standards involved here."

He noted that many advisors in England work on fees, commissions, or a combination, and he advised that the consumer should really opt for a fee-based arrangement that, he maintained, can be less expensive in the long run. How much an hour? "Roughly, $250 in U.S. terms," he said.

Incidentally, he cautioned that for advisors to call themselves independent, they must offer a fee-based arrangement. "Otherwise, you could easily be tied to an advisor who is tied to an insurance company and working on commissions."

He pointed out that because of this new standard, there will now be three categories of advisors: those who look at products from the entire marketplace; multi-tied advisors, who can sell products from a limited selection of providers; and tied advisors, who only sell the products of one company.

He said that persons who need help in this area, especially with planning for long-term care fees, were afforded a little extra peace of mind with the new standard. "The IFA-based advice service, Symponia, now specializes in this subject, and insists that its members undergo a full criminal records check."

And finally, whenever there is a problem, the consumer can always contact a Financial Ombudsmen Service.

All sounds good to me! Think it'll work over here?

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access