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STATEMENT OF PROFESSIONAL STANDING GUIDEYOUR PASSPORT TO PROFESSIONALISM

Statement of Professional Standing Guide

Advisor Competence

Introduction 4Our Role 4The Advisers’ Role 4Firms’ Role 5

Statement of Professional Standing (SPS)

SPS Applications 6SPS Renewals 6When to return your SPS 6CPD Requirements 7Structured v Unstructured CPD 8–9CPD Planning 10Recording your CPD 11Example of a CPD log 11SPS Sampling and Verifying 12

Code of Conduct

Breach of Membership 13 SPS Refused or Withdrawn 13 Appeals Process 13 SPS Refused or Withdrawn Appeals Process Chart 14

Appendices

Appendix 1 – How to apply for your SPS 15 First application for New Advisers 16 Renewal process – Advisers who already hold an SPS with the Chartered Banker Institute 17 Advisers who have held an SPS with another accredited body 18

Appendix2–MappingyourCPDtotheFCAfinalexamstandards 19–25

Contact details

Contents Pages

4–5

6–12

15–26

13–14

27

Chartered Banker Institute Statement of Professional Standing Guide

Advisor CompetenceIntroductionRevised regulatory rules introduced in 2012, by the now Financial Conduct Authority (FCA) were aimed at rebuilding credibility in the retail investment sector. For consumer this means:

clearer charges: as investment advisers must agree charges upfront,clearer services: as advisers must make it clear which areas and types of product they can advise on,moreprofessionaladvice:advisersmustmeetspecifiedqualificationstandards,signuptoan ethical code and keep their knowledge up to date with compulsory continuing professional development (CPD).

The regulations apply to all advisers in the retail investment market, including; banks, product providers, independentfinancialadvisers,wealthmanagersandstockbrokers.

Our RoleThe Chartered Banker Institute is an FCA accredited body and is authorised to issue Statements of Professional Standing (SPS) to advisers who meet the FCA’s professional standards requirements. We are committed to:

acting in the public interest and furthering professional development,carryingoutthoroughverificationservices,whichincludescheckingexamresults,FCA registration and active status before issuing an SPS,having appropriate systems and controls in place,co-operating fully with the FCA,sampling CPD records during SPS renewal,havinganannualauditbyanindependentassessorandassistingfinancialadvisersintheircareers by providing a Professional Financial Adviser (PFA) membership package that includes an SPS.

The Advisers’ RoleRetail Investment Advisers must:

hold an appropriate qualification and anygap-fill,comply with the FCA’s Statements of Principle for Approved Persons (APER),have an individual FCA registration numberandactivestatus,or,forPFA’ssubjecttoCertification,whoworkforaRelevantAuthorisedPerson(RAP),provideconfirmationofyourfitandproperstatusfrom your employer,follow a professional code of conduct, such as the Institute’s,hold a Statement of Professional Standing (SPS) from an FCA Accredited body, such as the Chartered Banker Institute,undertake a minimum of 35 hours CPD each year, 21 of which needs to be structured, and maintain a full record throughout the year.

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Firms’ RoleUndertherules,advisoryfirmsmust:

apply for FCA approved person status for their advisers,makesuretheiradvisersaretrainedandcompetentandchecktheirfitnessandpropriety,haveeffectivesystemsandcontrolstomonitoradvisers,be responsible for the quality of advice, make sure their advisers have an SPS, notify the FCA in the event of serious competence and ethics issues, disciplinary procedures and dismissal of an adviser.

5


Statement of Professional Standing (SPS)As a retail investment adviser you must hold an SPS issued by an Accredited Body such as the Chartered Banker Institute. TheSPSconfirmsthatyouhave:

adhered to the FCA’s ethical standards,therequiredqualificationsincludinggap-fill,andcompleted appropriate CPD.

SPS ApplicationsYour SPS is valid for one year and you need to renew it annually. It is your responsibility to make sure youhaveavalidcertificate.YouarenotabletoworkasaretailinvestmentadviserwithoutanSPS.You only need one SPS from one accredited body such as the Chartered Banker Institute.The Institute has a Professional Financial Adviser (PFA) membership package that includes the issue of an SPS and is available to advisers who the meet the FCA’s requirements. Please see Appendix 1 – How to apply for your SPS for details.

SPS RenewalsFor existing PFA members; the will Institute contact you one month before your SPS is due to expire. You must declare on the renewal form that you:

agree to the Institute’s rules and regulations, including the Code of Professional Conduct,have complied with the FCA Statements of principle and code of practice for approved persons (APER),have completed 35 hours appropriate continuing professional development (CPD),are authorised as a Retail Investment Adviser and have an active FCA number,ifyouareaPFA,subjecttoCertification,whoworksforaRelevantAuthorisedPerson(RAP),encloseconfirmationofyourfitandproperstatusfromyouremployer(ifapplicable),agree to share the information about your application with your employer, network, other accredited bodies and the regulators,understand that if you do not comply with the required professional standards we will withdraw your SPS,agree to return your SPS if you leave the profession or are asked to do so, will pay the subscription fee.

Please note – You have 60 days from the expiry of your SPS to obtain a new one. The Institute must refer late applications to the FCA for approval.

When to return your SPSYou need to return your SPS to the Institute if:

you are no longer working as a retail investment adviser,you are between roles and no longer have an active status on the FCA register,you are asked to do so,youremployerdoesnotcertifyyouasfitandproper.

CPD RequirementsExisting advisers wishing to maintain their SPS must complete 35 hours annual CPD. The following critieria applies:

21 of those 35 hours must be structured development, with at least 30 minutes spent on any one activity,structured CPD is designed to achieve a learning outcome and includes: seminars, lectures,conferences,courses,qualifications,e-learningandassessmenttests,all activities must reference the FCA’s Level 4 exam standards; to help our members, we have listed our Diploma in Professional Financial Advice syllabus at Appendix 2,all CPD must be related to retail investment advice, CPDrecordsmustberobustandcapableofbeingindependentlyverified.

Structured

Unstructured

35hrs

21hrs

Annual CPD

activity

Annual CPD activity


Structured v Unstructured CPDTo help you plan and record your CPD, here is a list of common activities along with their structured or unstructured status.

Activity Classification

EXAM-RELATED Exam training courses StructuredExam self-study StructuredExam revision StructuredSitting exams StructuredExam setting & marking StructuredExam moderation Structured

PARTICIPATING IN TRAINING COURSES/SEMINARS/WEBINARS Training courses, including assessed distance learning StructuredSeminars, workshops, lectures StructuredConferences & Forums StructuredAB Events StructuredCompanybriefings/meetingswithspecificlearningpurpose StructuredInformal meetings with no explicit pre-determined learning purpose UnstructuredOn-the-jobtrainingwithpre-definedlearningoutcomes StructuredInformal on -the-job training UnstructuredVerifiablee-learning StructuredUnverifiablee-learning UnstructuredVerifiablewebinars,podcastsetc StructuredUnverifiablewebcasts,podcasts,etc Unstructured

AUTHORING OR DELIVERING TRAINING OR PRESENTATIONS Authoring or preparing for training or presentations StructuredContributing towards Learning materials StructuredDelivering training or presentations StructuredFormalcoaching,mentoring,inductingstaffonrelevanttopics,with specifiedlearningoutcomes StructuredInformal coaching, mentoring Unstructured

Activity Classification

READING & VIEWING Readingorviewingmaterials,withspecifiedlearningoutcomesand testorreflectivestatement StructuredReading workbooks e.g. learning manuals UnstructuredReading Trade Magazines UnstructuredReading FT UnstructuredReading Industry Journals UnstructuredReading AB updates, regulatory etc UnstructuredViewing TV programmes on relevant subjects Unstructured

AUTHORING ARTICLES Industry articles & white papers StructuredWriting/researchingareport Structured

OTHER Technical research UnstructuredProduct/Fund/ServiceResearch NotApplicable (Business as usual)Work based observations and assessments StructuredMember of Board, Panel or Committee StructuredProfessionalinterestgroupmeetingswithspecifiedlearningoutcomes StructuredProfessionalinterestgroupmeetingswithoutspecifiedlearning outcomes, e.g. professional networking UnstructuredSocial events Not ApplicableActivities that are part of job rather than learning activity Not ApplicableAppraisals/one-to-ones/performancereviews NotApplicable

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CPD Planning As a matter of good practice, you will be expected to go through certain stages in planning and completing CPD, consistent with our focus on the relevance and learning outcomes of any activity.Exert from the FCA’s factsheet – Professionalism

You should base your CPD plan on your needs and learning gaps. Your employer or network can set stricter guidelines over and above those set by the FCA. OngoingCPDwillbedifferentforeachadviser.Youshouldreviewyourcompetenceonan ongoing basis and ensure you remain competent for your role.Taken from the FCA’s one-minute guide - Continuing professional development (CPD)

Meeting your needs, satisfying FCA requirements

Reflectand review your learning

and competence requirements.

Assess your needs include learning gaps, target learning

outcomes and your tangible

measures.

Implement knowledge in

practice. Record how you met the learning outcome and target

measure. What did you do or change as

a result?

Plan activities to meet your needs. The activity must be relevant to your role

and map to the FCA’s exam standards.

Carry out learning, and record:

What you did? Where it took place?When it happened?

How long you spent?Was it structured or

unstructured?

CPD Planning & Recording

Recording your CPD The Institute acknowledges that many advisers already complete structured CPD from various routes including their network or employer. While CPD is compulsory, an adviser can choose how they carry out and record their activity. You must make sure your log contains a robust audit trail of CPD evidence including:

a description of the development activity you completed, for example e-learning, course or seminar,relevance to your role, the target learning outcome and evidence, we recommend you keep copies of documents and transcripts,how the learning outcome was met and, if assessed, the result of the assessment,name of the provider, supply a web link if available,what your “follow up activity” was and what you will do or change as a result? How you will incorporate your learning into your “business as usual” practice,date completed and time taken to undertake the activity,if the activity was structured or unstructured,how the activity is mapped to the FCA exam standards, we have listed our Diploma in Professional Financial Advice syllabus to help you. The syllabus is divided into six main headings:

The syllabus is numbered for ease of recording. You can cite the code and number. If your activityoutcomewas“anunderstandingoftheregulationoffinancialservices”youwouldquote FSRE 4 on your CPD record.

TheInstituterecommendsthatyoukeepyourCPDrecordsforfiveyears.

1. Financial Services, Regulation and Ethics (FSRE)2. Financial Protection (FP)3. Investment Principles and Risk (IPR)

4. Pensions and Retirement Planning (PRP)5. Personal Taxation (PT)6. Providing Investment Advice (PIA)

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SPS Sampling and VerifyingWe require accredited bodies to carry out a random 10% sample check of their members’ and subscribers’ CPD activities. Accredited bodies need to consider three points when assessing CPD activities:

relevancemeasurement; andverification.

Exert from the FCA Professionalism web page

If we select you as part of our sample you need to show a full year’s CPD record. We will carry out the following checks to make sure:

you have met your 35 hour requirement, 21 of which are structured,youractivitiesarerelevanttoyourroleanditisclearhowtheybenefityou,you have a clear CPD plan and review it regularly,you have supporting evidence to show you completed the activity with a learning outcome for structured CPD,you clearly recorded when you completed the activity and who the provider was,your activity maps to the FCA exam standards.

We can ask you to send in your CPD record up to three months after you have received your latest SPS. You have 30 calendar days to send us your record with supporting evidence. We will contact youifyourrecordisinsufficientandmakerecommendationswhereappropriateforre-submission. We can also ask for your record during renewal stage.Ifyoufailtosendusyourrecordorsufficientevidenceafterrecommendationsandrequestsfromus; we have a duty to withdraw your SPS and inform your employer and the FCA.Under no circumstances should you claim CPD hours for activities that you did not complete or attend. This is a breach of our Code of Professional Conduct and subject to disciplinary action. We are also obliged to notify your employer and the FCA.

Code of Conduct Advisers must exhibit fair, ethical and professional behaviour at all times and adhere to the following:

The Institute’s Code of Professional Conduct, which sets out the ethical and professional attitudes and behaviour expected of members,TheFCA’sCodeofConduct(COCON)foradviserssubjecttoCertification.

Breach of MembershipThe Institute reserves the right to refuse an application for PFA membership, including issuing an SPS, if the adviser breaches either code. Please see the Institute’s Royal Charter, Rules, Regulations and Codes for details of the code of conduct, disciplinary and appeals procedures. The document canbeviewedbyvisiting:http://www.charteredbanker.com/about/corporate-governance/Claiming CPD hours for an activity the adviser did not do or for an event they did not attend is considered a breach of membership and subject to disciplinary action.

SPS Refused or WithdrawnThe Institute reserves the right to withdraw an adviser’s PFA membership and ask them to return their SPS, if they breach the Institute’s Code of Professional Conduct or the FCA’s Code of Conduct (COCON)foradvisorssubjecttocertification.Where possible the Institute will let the adviser know the reason for their decision and give recommendations if appropriate. The adviser has the right to appeal this decision, following the ‘SPS Refused or Withdrawn Appeals Process’.The Institute must share this information with the adviser’s employer or network and their regulator.

Appeals ProcessThe adviser should apply in writing within 30 working days of the decision to: Director of Accredited BodyChartered Banker InstituteDrumsheugh House38b Drumsheugh GardensEdinburgh EH3 7SW

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SPS Refused or Withdrawn Appeals Process Chart

Member granted PFA status and SPS issued

Notify member

within 14 days

Sanctions remain

Membership granted PFA status and SPS issued

New Sanctions imposed

Affirmsdecision and

sanctions

Director of Accredited Body considers grounds for appeal

Appeal granted

Appeal accepted1 2 Deny

Appeal

Sanctions Imposed

Hearing

Varies decision and/or sanctions

Notify member within 14 days

Set date for appeal hearing

(min28daysnotification)

Membertoconfirmattendance

(no later than 14 days before hearing)

Appeal proceeds

Appeal rejected

Memberisnotifiedofreasonforrefusal and opportunity to decide

AppendicesAppendix 1 – How to apply for your SPS

1.1 First Application for New Advisers1.2 Renewal Process – Advisers who already hold an SPS with the Chartered Banker Institute1.3 Advisers who have held an SPS with another Accredited Body

Appendix2–MappingyourCPDtotheFCAfinalexamstandards2.1 Financial Services, Regulation and Ethics (FSRE)2.2 Financial Protection (FP)2.3 Investment Principles and Risk (IPR)2.4 Pensions and Retirement Planning (PRP)2.5 Personal Taxation (PT)2.6 Providing Investment Advice (PIA)

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1.1 First Application for New Advisers

Checklist: have you:• Includedyourindividual FCA reference number?• AsaPFAsubjectto Certification,whoworksfor a Relevant Authorised Person (RAP), attach confirmationofyourfitand proper status from your employer.

• Signedthedeclaration consenting to us sharing data with the regulator and your employer?• Includedpaymentdetails for the membership fee?

Did you complete your Diploma with Calibrand,

which was awarded by the Chartered Banker Institute?

Send the application by post or email to:

Chartered Banker Institute38b Drumsheugh Gardens

EdinburghEH3 7SW

email: [email protected]

Also attach a copy of your Level4Certificate/Diplomaorevidenceofgap-fill.As a PFA subject to Certification,whoworksfor a Relevant Authorised Person (RAP), attach confirmationofyourfitandproper status from your employer.

Please allow 6 weeks for us to process your application.

Yes

No

Read the guidance and complete the SPS

application form.!i!i

!i

!i!i

!i

On receipt the Institute will verify your:•FCAstatus

•Qualifications•Confirmationof

Competence

The Institute registers you as a PFA member, issues

your SPS and online access to CPD resources.

Appendix 1

1.2 Renewal Process – Advisers who already hold an SPS with the Chartered Banker Institute

You can also print, post or email the application to: Chartered Banker Institute38b Drumsheugh GardensEdinburghEH3 7SWemail: [email protected]

Read the guidance and complete the SPS renewal declaration form. Submit

online or post with payment at least 30 days prior to your

SPS expiry date.

The Institute re-registers you as a PFA member,

issues your SPS and online access to CPD resources.

If we receive your application 60 days after the expiry date, we must contact the FCA for a decision.

If you completed a direct debit form, there is no need to send payment details.

Please allow 6 weeks for us to process your application.

Checklist: have you:• Signedthedeclaration

consenting to us sharing data with the regulator and your employer?

• AsaPFAsubjectto Certification,whoworksfor a Relevant Authorised Person (RAP), attach confirmationofyourfitand proper status from your employer.

• Includedpayment details for the membership fee?

• Declaredthatyouhave fulfilledyourCPD requirements?

• Declaredthatyou have not been refused an SPS from another Accredited Body?

!i!i

!i

!i!i

!i

!i!i

!i

!i!i

!i

!i!i

!i


•Membershipdetails•Confirmationof

Competence•CPDdeclaration

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Please allow 6 weeks for us to process your firstSPSapplication.

1.3 Advisers who have held an SPS with another Accredited Body

Checklist: have you:• Includedyourindividual

FCA reference number?• AsaPFAsubjectto Certification,whoworksfor a Relevant Authorised Person (RAP),attachconfirmationofyourfitandproperstatusfrom your employer.

• AttachedacopyofyourLevel4Certificate/Diploma,CPD record & SPS certificate

• Signedthedeclarationconsenting to us sharing data with regulator and your employer?

• Includedpaymentdetailsfor the membership fee?

• Declaredthatyouhave fulfilledyourCPD requirements?

• Declaredthatyouhavenotbeen refused an SPS from another Accredited Body?

Missing any of the checklist details will delay your application.

Attach a copy of your Level 4 Certificate/Diplomaor evidence of gap-fillaswellas:•yourCPDrecord •yourexistingSPSAs a PFA subject toCertification,who works for a Relevant Authorised Person (RAP), attach confirmationofyourfitandproperstatusfrom your employer.

!i!i

!i

!i!i

!i

!i!i

!i!i!i

!i

You must have an FCA individual reference number and be active on the FCA register. Note this number is eight digits long; three letters followedbyfivenumberseg.ABC12345 This is not the firm’snumber,whichisfivenumbers.

Read the guidance and complete the PFA application

form.

Yes

Send the application with your CPD record & a copy

of your existing SPS by post or email to:

Chartered Banker Institute38b Drumsheugh Gardens

EdinburghEH3 7SW

email: [email protected]


•Qualifications•CPDrecord

•Confirmationof Competence•existingSPS

The Institute registers you as a PFA member, issues

your SPS and online access to CPD resources.

No

Did you complete your Diploma with Calibrand,

which was awarded by the Chartered Banker Institute?

Appendix 2

Mapping your CPD to the FCA exam standardsThe Institute has listed their Diploma in Professional Financial Advice syllabus to help you conform with FCA exam standards.

1. Financial Services, Regulation and Ethics (FSRE)2. Financial Protection (FP)3. Investment Principles and Risk (IPR)4. Pensions and Retirement Planning (PRP)5. Personal Taxation (PT)6. Providing Investment Advice (PIA)

We have numbered each outcome to make it easy for you to plan and record your CPD. You can cite the code and number on your CPD record to demonstrate how that activity is mapped to the standards.

Example:Ifyouractivityoutcomewas“anunderstandingoftheregulationoffinancialservices”youwouldquote FSRE 4.If your activity outcome was “Understanding of how the HMRC tax regime applies to pensions planning,” you would quote PRP 2.You are not expected to cover all of the outcomes. You are required to address outcomes that are relevant to your role and part of your development. You may address only one or two as part of your CPD.

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1. AnunderstandingoftheUKfinancialservices industry, in its European and global context1.1 Role and structure of the UK and international markets, key participants1.2 The impact of the EU on UK regulation1.3 The role of government – economic and industrial policy, regulation, taxation and social welfare1.4 Thefunctionandoperationoffinancialservices within the wider economy

2. An understanding of how the retail consumer isservedbythefinancialservicesindustry2.1 Obligations towards consumers and their perceptionoffinancialservices2.2 Consumers’mainfinancialneedsandhowthey are prioritised2.3 How these needs are met

3. An understanding of the legal concepts and considerationsrelevanttofinancialadvice.3.1 Legal persons and powers of attorney3.2 Basic law of contract and agency3.3 Ownership of property3.4 Insolvency and bankruptcy3.5 Wills and intestacy3.6 Use of trusts

4. Anunderstandingoftheregulationoffinancial services4.1 The role of the FCA, HM Treasury and Bank of England – market regulation4.2 The role of other regulating bodies such as the CompetitionCommission,theOfficeofFair Trading, the Pensions Regulator, the Information Commissioner4.3 Financial Services and Market Act (FSMA) 2000, other relevant legislation4.4 The role of EU regulation and relevant Directives4.5 Additional oversight – senior management, trustees, auditors, external compliance support services

5. An understanding of the FCA’s responsibilities and approach to regulation5.1 Statutory objectives and how FCA is structured to achieve these5.2 The FCA handbook - the main principles and rules5.3 Business Standards5.4 Risk based supervision, discipline and enforcement, sanctions to deal with criminal activities

6. An ability to apply the principles and rules as set out in the regulatory framework6.1 Regulated activities and authorisation requirements6.2 Approved person and controlled function responsibilities

6.3 Recordkeeping,reportingandnotification requirements6.4 Professionalism and the training and competence requirements6.5 Anti-money laundering and proceeds of crime obligations6.6 Data protection including data security6.7 Complaints procedures and responsibilities to customers6.8 The Financial Ombudsman Service (FOS)6.9 The Financial Services Compensation Scheme (FSCS)

7. An ability to apply the regulatory advice framework in practice for the consumer7.1 Client relationships and adviser responsibilities

8. An understanding of the range of skills required when advising clients8.1 Communicating clearly, assessing and adapting tothedifferingcapabilitiesofclients8.2 Gathering information, assessment and analysis of client’s needs and circumstances, reaching conclusions and making appropriate recommendations

9. An understanding of the FCA’s use of principles and outcomes based regulation to promote ethical and fair outcomes.9.1 The Principles for Businesses and the discretionaryobligationstheseplaceonfirms9.2 Corporate culture and leadership9.3 The responsibilities that rest with approved persons and the need for integrity, competence and fair outcomes for clients, including dealing withconflictsofinterest

10. An ability to apply the Code of Ethics and professional standards to business behaviours of individuals10.1 The over-arching Code of Ethics10.2 The professional principles and values on which the Code is based10.3. Identifying ethical dilemmas10.4 The steps involved in managing ethical dilemmas

11. An ability to critically evaluate the outcomes that distinguish between ethical and compliance driven behaviours11.1 Typical behavioural indicators – positive and negative11.2 The outcomes which may result from behaving ethically–fortheindustry,thefirm,individual advisers and consumers11.3 The outcomes which may result from limiting behaviour to compliance with the rules – for the industry,firm,individualadvisersandconsumers

1. Financial Services, Regulation and Ethics (FSRE)

1. Understanding of the consumer and retail marketfactorsandtrendsrelevanttofinancial protection1.1 The role of insurance in mitigating personal financialrisk1.2 Consumer attitudes and behaviours to protectionneeds planning1.3 Trends

2. Understanding of the areas of need for protection planning and the main sources of financialprotection2.1 Personal and family income and capital protection needs2.2 The relationship between insurance and assets and liabilities2.3 Business protection needs - Small & Medium Enterprises(SMEs)2.4 Sourcesoffinancialprotection

3. Understanding of the role and limitations of StateBenefitsandstate/localauthorityfunded solutionsforfinancialprotection3.1 Rangeandlimitationsofbenefits3.2 Mortgage repayment support3.3 Considerationsandimpactonfinancialplanning

4. Understanding of the range, structure and application of life assurance and pension based policiestomeetfinancialprotectionneeds4.1 Typesofpolicies,comparativecosts,benefits and disadvantages4.2 Cost and premium calculation factors4.3 Legal requirements, ownership, uses and relevance of trusts4.4 Underwriting4.5 Terminalillnessbenefit4.6 Assignments, surrenders, paid-up policies, claims

5. Understanding of the taxation treatment of life assurance and pension based protection policies5.1 Qualifyingandnon-qualifyingpolicies,offshore policies5.2 Taxationoflifefunds,onshoreandoffshore5.3 Capital Gains Tax (CGT) and life assurance policies5.4 Inheritance Tax (IHT) and life assurance

6. Understanding of the range, structure and application of income protection insurance and optionstomeetfinancialprotectionneeds6.1 Types of policies, features and uses, comparative costs,benefitsanddisadvantages6.2 Definitions,exclusions,premiumcalculation factors6.3 Underwriting

6.4 Claims6.5 Taxation treatment6.6 Group policies

7. Understanding of the range, structure and application of critical illness insurance to meet financialprotectionneeds7.1 Types of policies, structure, comparative costs, benefitsanddisadvantages7.2 Market developments for critical illness insurance7.3 Definitions,conditions,exclusions7.4 Term and amount of cover – factors, assessment7.5 Premium calculation factors7.6 Underwriting7.7 Claims7.8 Taxation treatment, use of trusts7.9 Group policies

8. Understanding of the range, structure and application of long term care insurance to meetfinancialprotectionneeds8.1 Regulatory considerations8.2 Political environment, social care policy, national factors8.3 Main product types and features8.4 Long term care planning

9. Understanding of the main features of other insurance based protection policies9.1 Personal accident and sickness insurance9.2 Private medical insurance, hospital plans, dental insurance9.3 Payment protection insurance – mortgages, credit

10. Ability to evaluate the needs and priorities for financialprotectionandtherelevantfactorsin selecting appropriate solutions10.1 Identifying the priorities, risks and choices10.2 Assessing and quantifying current and future capital and income needs in real terms10.3 Determining suitability of product types and options10.4 Other planning considerations10.5 Importance of regular reviews

2. Financial Protection (FP)

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1. An ability to analyse the characteristics, inherent risks, behaviour and correlation of asset classes1.1 Cash and cash equivalents1.2 Fixed interest securities1.3 Equities1.4 Property1.5 Alternative investments such as commodities, and physical assets1.6 Pricing, liquidity and fair value1.7 Correlation of asset classes – relevance to asset allocation

2. An understanding of the macro-economic environment and its impact on asset classes2.1 Main long term UK and global socio-economic trends2.2 Overview of world economies and globalisation of markets2.3 Economicandfinancialcycles–predictability, regionaleconomydifferences2.4 The key economic indicators – trends and their interpretation2.5 Significanceofmonetaryandfiscalpolicy2.6 Relevanceofmoney,inflation,deflation,interest rates and exchange rates2.7 Balance of payments and international capital flows2.8 Theroleoffinancialinvestmentintheeconomy

3. An understanding of the merits and limitations of the main investment theories3.1 Key features of the main investment theories: Portfoliotheory,diversificationandhedging3.2 Basicsofbehaviouralfinance–marketand individual behaviours

4. An ability to apply the principles of the time value of money4.1 Compound interest and discounting4.2 Real returns and nominal returns

5. An ability to analyse and explain the nature and impact of the main types of risk on investment performance5.1 Liquidity and access5.2 Income and capital growth, including shortfall5.3 Short term volatility5.4 Long term performance5.5 Gearing5.6 Currency5.7 Inflation5.8 Interest rates5.9 Systematic and non-systematic, including fraud

6. An ability to analyse the characteristics, inherent risks, behaviours and relevant tax considerations of investment products6.1 The advantages and disadvantages of direct investment in securities and assets compared to indirect investment through collectives and other products6.2 The main types and use of indirect investment products

7. An ability to apply the investment advice process7.1 Know your client requirements7.2 Asset allocation7.3 An understanding of the principles of investment planning7.4 Asset allocation7.5 Portfolio construction:7.5 Wrap and other platforms:

8. An ability to analyse the performance of investments8.1 Portfolio performance:8.2 Portfolio review and administration:

3. Investment Principles and Risk (IPR)

1. Understanding of the political, economic, social and environmental factors which provide the con text for pensions planning1.1 Role of Government, policy direction, challenges and proposed reforms1.2 Corporate responsibilities, challenges and impact on pension provision1.3 Demographic trends, longevity and ageing population1.4 Incentives, disincentives and attitudes to saving1.5 Main scheme types and methods of pension provision

2. Understanding of how the HMRC tax regime applies to pensions planning2.1 Funding/contributionstoregisteredpensionschemes, tax relief provision2.2 Pension scheme investment funds2.3 Deathbenefitsbeforeandaftercrystallization2.4 Pensionschemeretirementbenefits2.5 Outline of the annual allowance, lifetime allowance, special annual allowance, and associated charges2.6 Outline of relevant transitional reliefs post-Finance Act 20062.7 Outline of the tax treatment of other scheme types

3. Understanding of the relevant aspects of pensions aw and regulation to pensions planning3.1 Pensions Regulator compliance requirements3.2 Pension protection schemes3.3 Trust and contract based pensions3.4 Role and duties of trustees and administrators3.5 Pensions and divorce3.6 Employment law relevant to pensions3.7 Bankruptcy law and pension assets

4. Understanding of the structure, relevance and application of the State Schemes to an individual’s pension planning4.1 Basicstateretirementbenefits4.2 Additionalstateretirementbenefits,historicand current4.3 Contractingin/outconsiderations4.4 Pension credit framework

5. Understanding of the structure, characteristics andapplicationofDefinedBenefitschemestoan individual’s pension planning5.1 MainattributesandbenefitsofDBpensionprovision5.2 Main types, variations and hybrids5.3 Rules and operation of DB schemes

5.4 Funding methods and issues5.5 Roles of trustees and other parties, and scheme reporting5.6 Factorstoconsiderandbenefitsonleaving,earlyand normal retirement5.7 Benefitsonillhealthanddeath5.8 Eligibility criteria and top-up options5.9 Transfer issues and considerations5.10 Public sector schemes

6. AbilitytoanalysetherangeofDefinedContribution scheme options as they apply to an individual’s pension planning6.1 MainattributesandbenefitsofDCpensionprovision6.2 Legal bases for schemes and main impacts6.3 Main types of DC schemes and their rules and operation6.4 Contributions – methods and issues6.5 Contracting out, rebates and the contracting out decision6.6 Benefitsonleavinganddeathbefore crystallisation6.7 Scheme options, limitations and restrictions6.8 Crystallisation options and impact of decisions6.9 Transfer issues and considerations6.10 Stakeholder pensions6.11 Personal Accounts

7. Ability to analyse the options and factors to considerfordrawingpensionbenefits7.1 Stateretirementbenefits7.2 DB Schemes7.3 DC schemes7.4 Phasedretirement–options,benefitsandrisks7.5 Timing of decisions and implementation7.6 Triviality rules

8. Ability to evaluate the aims and objectives of retirement planning including the relevant investment issues8.1 Assessing and quantifying retirement aims and objectives:8.2 Investments available to meet this objective:8.3 Asset allocation factors, relationship to overall portfolio8.4 Self investment8.5 Alternative solutions for pension income:8.6 Factorsaffectingregularreviews

4. Pensions and Retirement Planning (PRP)

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1. Understanding of the UK tax system as relevant to the needs and circumstances of individuals and trusts1.1 Income tax – sources of income, liability, allowances, reliefs, priorities for taxing income, incomeoftrustsandbeneficiaries1.2 National Insurance Contributions (NICs) – liability for employers, employees, self employed contribution levels, voluntary NICs1.3 Capital Gains Tax (CGT) – liability, rate, disposals, gains and losses, reliefs and exemptions, capital gains of trusts1.4 Inheritance Tax (IHT) – liability, transfers, nil rate band, rates, reliefs and exemptions, assets held in trusts, transfers to and from trusts1.5 Residence and domicile – main rules, impact on liability to income tax, CGT and IHT1.6 UK tax compliance – self assessment, Pay As You Earn (PAYE), tax returns, tax payments, tax evasion and avoidance issues1.7 Stamp duty reserve tax and stamp duty land tax – transactions subject to tax, rates of tax, main reliefs1.8 Outline of Value Added Tax (VAT) and Corporation Tax

2. Ability to analyse the taxation of investments as relevant to the needs and circumstances of individuals and trusts2.1 Direct investments – cash and cash equivalents,fixedinterestsecurities,equities and property2.2 Indirect investments

3. Ability to analyse the role and relevance of taxinthefinancialaffairsofindividualsand trusts3.1 The impact of taxes on individuals, trusts and their investments3.2 Key principles of income tax planning – spouse, civil partners, children, pension contributions, ISA allowances, use of the main CG exemptions and reliefs3.3 Main uses of lifetime gifts and trusts in basic IHT mitigation

4. Ability to apply the knowledge of personal taxation to the provision of investment advice4.1 To carry out computations on the most common elements of income tax and NICs; CGT; IHT including the impact of lifetime transfers and transfers at death4.2 To make elementary tax planning recommendations in the context of investment advice

5. Personal Taxation (PT)

1. Obtain appropriate client information and understand clients’ needs, wants, values andriskprofileessentialtothefinancial planning process

2. Synthesise the range of client information, subjective factors and indicators to provide thebasisforfinancialplanningassumptions and decisions

3. Analyse a client’s situation and the advantages and disadvantages of the appropriate options

4. Formulatesuitablefinancialplansforaction

5. Explain and justify recommendations

6. Implement,reviewandmaintainfinancial plans to achieve the clients’ objectives and adapt to changes in circumstances

6. Providing Investment Advice (PIA)

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