IFP/CISI Merger: A marriage made in heaven?

Last week the board of the Institute of Financial Planning started a 4 week consultation with its members in view of its proposed merger with the Chartered Institute of Securities and Investments. The board will decide on the 4th of September.

Talking to financial planners, responses have been rather mixed, with some questioning why we even need a merger in the first place and if this is really a good thing for the financial planning profession.  At this stage, it’s probably worth mentioning that while I serve as the chair of the London branch and on membership committee, this post is my personal thoughts. You can read IFP’s official statements here.  Overall, I think it’s an exciting development and needless to say, I’m backing the merger. But, that not to say that I don’t share some of the concerned that raised by some planners.

The Why?

So, let’s get the bad news over with first. Let’s be completely frank on the question of the reason for the merger. The reality is, a key driver of this merger is that the Financial Planning Standard Board (which owns the CFP patent outside of the US) wants wider adoption of the CFP certification among financial professionals globally and UK in particular. It has been pushing the IFP for years (as it should) to increase the number of CFP certificants in the UK, a task that that has become increasingly challenging for the IFP given its relatively small size, competition from the likes of PFS’s Chartered designation and the frustrations many planners feel about the inconsistencies in the CFP assessment process.  While there’s been efforts on the part of the IFP to revamp the process, I’m not sure enough has been done to change the perception among advisers.

Currently, there are just over 1000 CFPs in the UK and the FPSB wants to push that number up, and is looking to partner with a larger organization to achieve this. My understanding is that, even if the IFP members decides not to go ahead with the merger, the CFP certification will likely be taken over by the CISI in any case. And, with the CFP gone, the need for the IFP to exist in its current form is significantly diminished. Sure, the amazing community, the membership and events including the much loved IFP Conference, industry representation can all continue, but CFP holders will likely need a new organization in order to renew their licenses in the future. I think the IFP leadership should be commended for being bold in their thinking and looking for a way to preserve the great legacy of this organisation.

I appreciate that this may not be the most positive interpretation of what’s going on but let’s back off a bit to consider some of the good things about this merger.  Here’s a question; is financial planning a distinct disciple from wealth management? Isn’t wealth management, if done right, just simply financial planning for folks with lots of money?

Phil Billingham has a great article in PA that captures this rather succinctly….

… the face of financial services in 2015 looks very different to that of 1986. Years of regulation, and not least the RDR, has ensured that the original precepts of  founding (the IFP), of fee for service, the planning process and a client first approach has now been adopted by all advisers – to one degree or another, in any case.

In the meantime we have seen the traditional model where wealth management is provided by City stockbrokers and private banks largely fall away….

Rather, we have seen an increase in the amount of ‘first generation’ wealth manager, and with that has grown the need for more complex client relationships, and access to tools and skills that the traditional ‘trader’ type stockbroker simply did not possess.

But planners do. So in this context, where many financial planners are both doing the financial planning role, as well as increasingly the ‘wealth management’ role, this merger starts to make complete sense.’

Admittedly, many so called ‘wealth managers’ focus primarily on portfolio management, while financial planners tend be more holistic; addressing important issues such as goal setting, risk management/insurance, pensions, tax, trust and estate planning. Some might throw in ‘life planning’ ( and may be even a little bit of  ‘yoga’ 🙂 ) to help clients identify what’s really important to them and implement a strategy to achieve client goals.

There is of course the emerging school of thought (driven in part by sales pitches from discretionary investment managers) that financial planners should leave portfolio management to the ‘specialists’. The argument is that, given the vast scope of financial planning, it’s hard to see how planners can manage portfolios at the same time as address all the other aspects of financial planning.  However, I see no reason why portfolio management is more of a specialist area than say, trust and estate planning or ‘retirement planning’ and why this specialist function can’t sit within financial planning as opposed to being a very different field entirely and having to be outsourced to a third-party. Indeed, scaled financial planning firms tend to keep their portfolio management functionality in-house, rather than outsourced.

To me, wealth management should encompass all aspect of the client’s wealth, not just their investment portfolio. This is something many financial planners have been doing for years.  Accordingly, I believe that this merger gives financial planners a chance to help shape the future of wealth management.

There are some quibble amongst planners I’ve talked to over qualifications. The terms of the proposed merger means that CFP holders will gain the Chartered Wealth Manager designation, subject to passing a short online CISI Ethics test. There’s a similar route for CWMs to gain the CFP. This begs the question, are the two designations really that similar? CWM is a QCF Level 7 qualification, while the CFP is Level 6. Clearly, the two qualifications are different, but I think there is significant overlap and they can be considered substitutes for another.  With many CFPs holding other designations such as the IMC and the PSF Chartered status, I think its only appropriate that the knowledge base required for the CFP is adjudged to be equivalent to the CWM.

The CWM has deeper content on portfolio management contents than the knowledge base required to pass the CFP. The CFP on the other hand requires a broader understanding of pensions, tax and risk managements than the CWM. However, let’s not forget that the point of the merger isn’t necessarily to make financial planners out of portfolio managers overnight (or at all) and vice versa. The exemptions gives planners who want to deepen their knowledge of portfolio management access to a range of CPD programs and exams. If the merger goes ahead, the CISI will develop a new Level 4 financial planning qualifications.

And of course, there’s a clear opportunity for the CISI to sort of the inconsistencies in the CFP assessment process, possibly a conversion to the traditional exam!!! Let’s not forget that the CFP certification process in the US includes a coursework and a 3 hour long exam.

Finally, some planners have raised the point about the risk of financial planner getting lost within the CISI, given its larger investment management audience. My view is that the IFP within the CISI, is no different than the PFS sitting within the CII. It’s up to us to get our voices heard and to sell the strength of the IFP’s model of wealth management! Personally, I see this as a chance to shout about the financial planning model among CISI’s 20,000 strong members in the UK.  Of course, there’s an incredibly bigger opportunity to secure wider representation for the profession with policy makers and regulators. And given its extensive affiliations with universities, a chance to bring new blood into financial planning profession. What’s not to like?

Whatever you think, spare a thought for the incredible impact the IFP and its founders have had on this profession, and for the hard working of staff, whose lives will likely be changed (hopefully for the better) by the proposed merger!


Abraham Okusanya
Abraham is the founder of FinalytiQ, a research consultancy for platforms, asset managers, and advisory firms. Recognised as one of the country’s leading experts in retirement income, platforms and investment propositions, Abraham has authored several papers on these subjects and delivered talks to the Personal Finance Society, The FCA and several conferences across the country.
He holds a Master’s degree from Coventry University and an alphabet soup of qualifications, including the Investment Management Certificate, Chartered Financial Planner, CFP and Chartered Wealth Manager designations. He was one of 5 finalists for the Professional Advisers Personality of Year Award 2015 but the award went to a more deserving winner, obviously!

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  1. markbegg@gmail.com'

    I’m a member of both. I’ve always had an issue with how the CISI can issue the designation ‘Chartered Wealth Manager’ or offer a ‘Masters in Wealth Management’ without addressing real Financial Planning. But now CFP professionals will be able to call themselves Chartered Wealth Managers after sitting just an ethics paper. Bear in mind the CISI Masters qualification route is pretty high level investment stuff; for example, you not only need to know what bond duration is but be able to calculate it long hand and explain and calculate convexity. Most Financial planners wouldn’t have a clue about this! – So it seems to me that this aspect of the merger needs much more thought if the designations are to be meaningful and coherent.

    • abrahamokus@yahoo.co.uk'

      Hi Mark, I do get your point about the depth on investment content in CWM but not sure that CFPs ‘wouldn’t have a clue’.

  2. ruth@theredhousefp.com'

    Hi Abraham, good balanced article looking at reality and opportunity. Thank you

    • abrahamokus@yahoo.co.uk'

      Thanks Ruth. It’s incredibly exciting to see how this develops.

  3. eneagu@bespokefs.co.uk'

    You seem to know more information than the official communiqué.

    I did not understand that there are issues with FPSB from the IFP Statement. I am not sure that the number of CFPs will increase as a result, probably it will diminish.

    Myself is one who does not intend to rub shoulders with the “crystal ball gazers”, I do not have anything in common with them, they do not have anything in common with us. It is as simple as that.

    There are a lot of wrong names used here: Chartered wealth managers should be named “Chartered investment managers” or Chartered Crystal ball gazers.

    How can you take a CWM who’s facfind has only three options: invest for growth, invest for income, and invest for growth and income and name him a wealth manager or worse to make him a CFP. How low the standard for CFP could be dropped?

    Come on!

  4. ian@ianleesassetmanagement.com'

    As a member for 19 years in the IFP – I have had no mention and no information from the President or CEO of the IFP, with regard to this takeover or merger or whatever. Interestingly enough I was at an estate planning meeting with both the President and Sam Rees Adams and others – and no mention was made. I am kept up to date through the National Press – which is at best inconsiderate and severely lacking in communication. I wonder when the news will hit the Herts Advertiser – to keep IFP members informed ?

  5. tony@yahoo.com'

    As I understand it should the merger go ahead the IFP (as we know it) will cease to exist. It will become part of the CISI (a department if you like). Change is never a bad thing if it is not change for change sake. It will also help move the industry forward and rid us of some of the archaic views held by the planning community (like Eugen’s post). For the record I am Chartered, Chartered Wealth Manager, L6 Diploma, Degree and MSC in Financial planning – must make me a crystal ball gazer!

  6. Becky@aureafp.co.uk'

    ‘I found this a great article thank you Abraham. I enjoyed reading it with your
    views and appreciate your support and vision. However, there are a few
    technical inaccuracies. As the UK delegate on the International Council
    of the Financial Planning Standards Board (the owners of the CFP mark outside
    of the US) I can provide some clarity on their view on this proposal. I
    should also make clear that there is not a similar path proposed for Chartered
    Wealth Managers to achieve the CFP license as this is a protected designation
    with only the sole route to achieving CFP professional status, I will expand on
    this below. Apart from these two areas, I found it factual and balanced
    and many of the views such as the way the PFS sits within the CII echo my own
    personal opinions.’

    There have been some interesting discussions surrounding the proposal, a lot of positives,
    but naturally a lot of questions. Most of the questions that I have seen are fair and enquiring in the nature of a critical friend, and we are doing our very best to answer them all, and to
    ensure the Q&A section on our website provides a full picture.

    I would like to take this opportunity to clear up some common areas of misconception.

    Firstly, and this is the most common question that we are receiving is to do with the
    Chartered Wealth Manager title. As a Chartered organisation the CISI can award Chartered titles, in this case the Chartered Wealth Manager title. There can be more than one route to obtaining a title. Historically there were other qualifications from the CISI, but at the moment the only route is the Chartered Wealth manager Qualification. The qualifications will remain separate and what we are discussing here is the recognition of IFP members at the appropriate CISI membership level, and if the proposed merger goes ahead then two assessment routes
    to being awarded the Chartered Wealth Manager title will be available, either
    the Certified Financial Planner route, or the Chartered Wealth Manager
    qualification route. Both are difficult to achieve with a rigorous criteria to meet, but they are aimed at different sectors of the financial world. There are many who either have taken, or are interested in both routes, as there may be overlaps in an individual’s areas of interest and specialisation. What we need to be clear about is what will NOT be happening. There are no
    exemptions for a Certified Financial PlannerCM professional to become qualified as a Discretionary Fund Manager and there are no exemptions for an existing Chartered Wealth Manager to become a Certified Financial Planner without going through the exam and case study assessment route. The skill sets are completely opposed, although are highly complementary to each other for those who look after their clients wealth (as opposed to outsourcing) as a part of their Financial Planning.

    Now, moving
    onto the statement with regards to FPSB.
    Having been the UK delegate on the international council for the past
    three years, I have been heavily involved with the organisation, including
    being part of the Governance review of FPSB itself. The UK has a very strong relationship with
    FPSB and we talk openly and frankly about how things are going. FPSB are indeed all for growing. They too would be failing in their mission if they did not grow the profession of Financial Planning for the benefit of the consumer. The international council meet
    twice yearly and the common theme for developed countries is how do we
    grow? The early adopters are established, how do we bring in the next generation of planners? Part of the governance review last year identified a need to create a Chief Executives working group to roll their sleeves up to put into action identified priorities. They first met in Paris in April to identify their first project, and then later in Hong Kong to get to work on this. The priority project? You’ve got it, GROWTH. We are not alone in our search for growth.

    The following statement is quoted directly from FPSB so you can see first-hand
    their views.

    FPSB’s member organization in the United Kingdom, IFP,
    is set to merge with the CISI. Terms have been agreed and a consultation period
    is now starting with the IFP membership. IFP has done a tremendous job with the
    CFP certification program and has created a vibrant community in the United
    Kingdom. FPSB is pleased and proud of the efforts. As part of IFP’s commitment
    to strengthening CFP certification and ensuring the program has adequate
    ongoing resources and recognition, IFP has negotiated with CISI to merge the
    CFP certification program with CISI’s qualifying credentials. FPSB has been
    apprised of this process and is aware of the role CISI will play for the
    ongoing management of CFP certification once the merger is complete. FPSB looks
    forward to the future relationship with CISI to continue growing CFP
    certification and bringing value to the citizens in the United Kingdom.

    The IFP would survive without the CFPCM designation; after all it was formed
    in 1987 and only secured the UK license to offer the CFP programme in
    1995. However, the Certified Financial Planner license provides the benchmark that is now widely recognised. Whilst we can continue to offer the level 6 Diploma in Financial Planning we recognise this is unlikely to hold the same attraction. The IFP has other strengths in its events, knowledge and membership that could survive, but we have a desire to thrive.

    I will be the first to admit that we have been watching the growth of Chartered Financial
    Planners with some trepidation as it is clear to us, that a qualified Chartered
    Financial Planner has not demonstrated that they can produce a Financial Plan
    that would fit with our definition of Financial Planning. That does not mean to say that a Chartered Financial Planner is not practicing Financial Planning, they may well be, but
    we do not believe that this can be demonstrated through this award alone. There is a fundamental difference between the CII/PFS testing of Financial Planning and our own. I have every respect for the PFS, having taken many exams through them over the years (admittedly when they were SOFA, (showing my age!) but their expertise is strongly on the technical side. This is one of the reasons why we have chosen the CISI as our preferred partner, they
    are complementary with no confusion over definitions, or where our respective
    expertise lies i.e. IFP understand Financial Planning. We will manage our own
    Professional Forum and have representation at all levels of governance within
    CISI including the Board.

    Given that Abraham stated ‘I’m backing the merger’ in his article, I am going to finish this
    response to him with a thank for articulating so clearly why Financial Planning
    can benefit from being a part of a larger stronger organisation.

    This proposal is designed to strengthen the focus of Financial Planning and increase
    the promotion and benefits to a larger audience within CISI, and also to take
    advantage of the higher resources to be able to promote to new audiences within
    Financial Advisers and importantly also to the public.

    Rebecca Taylor FIFP CFP
    IFP President

  7. acamp76144@aol.com'

    As an financial planning lead Wealth managemnt/DFM firm we have staff consisting of both Chartered Wealth Managers and Chartered Financial Planners (and a number of Chartered accountants). We are relatively agnostic as to which route staff take as we expect everyone to have a base “GP” level of knowledge, but accept some staff will specialise more in certian areas (like pensions or investments). Clients get serviced via the appropriate combintation of staff for their needs.
    Our core investment solution as a DFM is based upon collectives (for diversification reasons), and consists of both active and passive funds. The concept of DFM meaning stockbroking with no planning context is now obselete. We can facilitate stockbroking/focused investment as a “satellite” account where appropriate.
    The overlap between the skills required by all “quality” practitioners (who provide a service rather than selling products) in this industry is ever increasing, and the content of modern CISI exams largely reflects this point. I looked at a recent level 4 CISI paper that one of our trainees sat recently and it included sections on QROPS and onshore bond top slicing. I imagine this would come as a surprise to most CII and CFP practicioners.


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