Standard Set C assessment guidance note

FRIDAY 27 AUGUST 2010

The purpose of this guidance note is to assist those working in the financial advisory sector who may not have responsibility for their ‘own’ clients in their preparation for assessment for Standard Set C. The intended audience includes:

• Management / adviser support roles - those who provide a support function to financial advisers and who may be providing guidance and mentoring to them without necessarily having direct client contact or their own client base. Example: Business Development Managers [BDMs].
• Specialists in one or more of the steps in the six-step process - those who, in their day-to-day role, have responsibility for particular steps in the advice process without having responsibility for them all. Example: paraplanners, those responsible for research and strategy, or implementation specialists.
• Trainee advisers - those who are new to the industry and need to build their skills and experience in the advice giving process over time.

It is appropriate that those who work in these roles have demonstrated competence in the advice process in its entirety as, once authorised, they will have the authority to give personalised advice to a retail client, even if their current job role does not require them to engage in all steps of the process.

This guidance note will assist these people in their preparation for satisfying the evidence requirements for Standard Set C.

Standard Set C

Standard Set C covers all of the six steps of the universally accepted financial advice process, while also meeting the requirements of current legislation and professional practice standards.

Three client files requirement

It is important to note that the unit standards contained in Standard Set C do not specifically require ‘three client files’. They do, however, require evidence of completing all of the components of the advice giving process at least three times with different clients to demonstrate repeatability of skill and competence.

PROCESS FOR THOSE SEEKING ASSESSMENT BEFORE 30 JUNE 2011

Management / adviser support role

Those performing this type of role may need to collect evidence from different sources.

Sourcing appropriate and sufficient evidence may involve consideration of the various records, file notes and processes in the adviser’s current role, to identify suitable evidence of competence.

For example, a person in this type of role may have worked with an adviser by undertaking a joint client meeting and participated in the data gathering phase of the process as part of a field coaching activity. Alternatively, they may have undertaken the analysis and evaluation component of the process of client data collected by an adviser and - using their specialist expertise - developed recommendations for the adviser to present to the client. These two activities, appropriately documented, would provide valid evidence towards assessment.

Evidence from client files established some years ago - when previously in practice as a financial adviser - and not maintained since, is unlikely to be valid. This is because candidates must demonstrate current competence relating to current practice.

After exploring all options to identify relevant evidence in current records, file notes and processes, the candidate may still have gaps and will need to find ways of producing further valid evidence.

The unit standard does not require the client to be fee paying. The expectation is that the advice process is conducted with a real person covering their authentic personal and financial situation and that they are provided with appropriate written advice based on their actual situation, utilising the organisation’s documentation and processes. This could be a volunteer client - either internal to the organisation or external - or undertaken as joint fieldwork with an adviser to provide evidence that all of the steps in the process have been completed.

Specialists in one or more of the steps in the six-step process

Those performing this type of role may need to collect such evidence from many different sources.

Sourcing appropriate and sufficient evidence will involve consideration of the various records, file notes and processes in their current role to identify suitable evidence of competence.

For example, a paraplanner may have an abundance of evidence relating to the steps of analysing client data and developing recommendations, but may not have gathered that data themselves, so have no direct evidence towards this step.

After exploring all options to identify relevant evidence in current records, file notes and processes, the candidate may still have gaps and will need to find ways of validly producing further evidence.

The unit standard does not require the client to be fee paying. The expectation is that the advice process is conducted with a real person covering their authentic personal and financial situation and that they are provided with appropriate written advice based on their actual situation, utilising the organisation’s documentation and processes. This could be a volunteer client - either internal to the organisation or external - or undertaken as joint fieldwork with an adviser to provide evidence that all of the steps in the process have been completed.

Trainee advisers

A trainee adviser will work towards attaining skill and competence in the six-step advice process by working in the field over time. As for most advisers, the ‘three client files requirement’ may translate to ‘three client files’ for trainee advisers, or it may also mean they need to source such evidence from a number of different client interactions over time.

Initially, a trainee adviser may need to be associated with another adviser [perhaps through membership of an organisation or on an individually arranged basis] so that they can demonstrate the advice process in a real world environment and progressively gather their own portfolio of evidence for assessment purposes.

The unit standard does not require the client to be fee paying. The expectation is that the advice process is conducted with a real person covering their authentic personal and financial situation and that they are provided with appropriate written advice based on their actual situation, utilising the organisation’s documentation and processes.  

PROCESS FOR THOSE SEEKING ASSESSMENT AFTER 30 JUNE 2011

After 30 June 2011, it will be illegal for any person who is not authorised to give financial advice in relation to any product or service that requires an adviser to be authorised under the Financial Advisers Act 2008.

Any person working in the financial services sector who operates in an area requiring authorisation, but is not yet authorised, will need to ensure that they work under the supervision of an Authorised Financial Adviser [AFA]. This AFA will check, validate and, for the purposes of the Code, take responsibility for the advice in its entirety. The client files established during this period of supervision can be used as evidence for the purposes of assessment of Standard Set C.

To demonstrate the entire six-step advice process as contained in the unit standards, a candidate in this situation will need to be able to demonstrate they can competently:

• Agree a scope of service with the client.
• Collect and record client information.
• Analyse the information and formulate recommendations.
• Present the recommendations to the supervising AFA [as the client for the purposes of assessment]. The AFA can validate that the appropriate process has been followed and check the suitability of the advice.
  • Provided the AFA has checked and validated the advice, the AFA may present the advice to the client as the AFA’s own advice, while meeting all the requirements of the Code.
  • If the AFA is not satisfied with the appropriateness of the process or the suitability of the advice, the AFA will need to work with the candidate to address any deficiencies before proceeding to present the advice to the client as the AFA’s own advice.
• Observe the presentation of the AFA’s recommendations to the client. Note: this is not part of the six-step process however is necessary so the candidate can document any additional modifications agreed with the client.
• Implement the recommendations made by the AFA and conduct an appropriate monitoring and review process in relation to these recommendations.

Further information

• The Standard Set C unit standards can be downloaded here
• It is recommended that advisers continue to refer to this website for any further updates to Standard Set C assessment guidance.

The information contained in this guidance note is correct as at Friday 27 August 2010.