by Roger Aitken - Financial advisers in the UK who are accredited with ISO 22222, the international standard for personal financial planners, have a duty and obligation to ask clients about their stance on ethical investments when giving advice. However, a high number of advisers have been found by the consumer watchdog Which? to be falsely claiming this accreditation.
Question marks have also been raised over some advisers’ qualifications from the Chartered Institute of Securities & Investments (CISI).
There are a number of specific technical issues surrounding the provision of green and ethical investment advice. Suitably qualified financial advisers with the ISO 22222 standard under their belt can deliver added value for clients who seek green and ethical investment.
One of the key questions that advisers are mandated to ask under the ISO standard, which was been developed in 2006, is: “Do you have any social, ethical, environmental or religious considerations that you would like us to take into account in our work for you?”.
However, one wonders how advisers not possessing this standard can actually be in a position to provide proper advice. Furthermore, falsely claiming the standard raises ethical questions of itself.
Filip Slipaczek, a North London-based chartered financial planner who recently achieved the ISO 22222 certification standard six years in a row with no room for further improvement, says: “Any misrepresentation of an adviser’s qualification is bordering on fraud. And, the appropriate disciplinary action should be taken by both the chartered body involved and the UK regulator, the Financial Conduct Authority (FCA).”
Last year it was well documented in the press that ISO-accredited advisers could not use the term ‘ISO 22222-certified financial planner’ as the term ‘certified financial planner’ had a trade mark registration in the US, although administered by the Institute of Financial Planning (IFP).
Slipaczek, who in 2008 made the headlines saying that ethical investing was “no longer within the domain of the lentil-chewing sandal-wearing lefties of the 1960s”, adds: “Notwithstanding the fact that the IFP has been taken over by the CISI, whose designations have been fraudulently claimed by other advisers, this is far more worrying in my opinion than an inter-profession spat over the term ‘certified financial planner’”.
Today, his practice sees one in three of retail clients opting for ethical and green investment products through funds.
Unbiased, a website that enables the public in the UK to locate financial advisers in their area, has apparently been listing advisers incorrectly with outdated or simply false qualifications. It might appear that this is an industry-wide issue, regardless of the source used to find an adviser.
Another financial adviser commenting on a story in trade paper FT Adviser in relation to the findings from Which? said it was “not acceptable” that some advisers fail to update their profiles on this website and called it “misleading advertising.”
They added: “You are responsible for all forms of advertising that represents your business. And, if you don’t deal with that, then it begs the question of what other aspects of your business you might be glossing over.”
Unbiased revealed that it manually checks over 50% of some 50,000 qualifications across 24,000 individuals, but said that there is “no automated way to check some qualifications” and that not even the FCA holds such data. An Unbiased spokeswoman suggested that a “centralised verification system” was required. “This could be one for the industry as a whole to collaborate on, as it would be in everyone’s interests,” they added.