Chartered status in the financial advice sector is a highly regarded accreditation that many businesses aspire to achieve but some are lying about having obtained it.
A recent investigation by New Model Adviser found that 47% of firms claiming to be chartered financial planners on directory Unbiased were not listed on the Chartered Insurance Institute’s (CII) database.
Out of 99 randomly-selected advice firms listed on Unbiased as ‘chartered financial planners’, only 52 also appeared on the CII’s official database of chartered firms.
The CII confirmed to International Adviser the other 47 firms do not hold CII chartered status.
‘No jurisdiction to legally challenge’
Melissa Collett, director of professional standards at the CII, said: “We will always take action to protect corporate chartered status for insurers, brokers and financial planners and encourage members of the public to verify a firm is chartered by checking our member register.
“To raise concerns about a firm incorrectly claiming to be chartered financial planners, we encourage our members and the public to email [us]. When a firm incorrectly holds itself out as chartered, the CII’s complaints process is triggered.
“Most complaints are quickly dealt with by contacting the firm to explain the issue and agreeing with the business how they need to rectify the issue. However, if a complaint cannot be resolved in this way, the CII‘s legal team can take further steps including legal action if necessary.
“The CII does not own the trademark over the word ‘chartered’ in general. The CII can only legally challenge a business for using the CII logo or the tag line ‘chartered financial planners’. The CII has no jurisdiction to legally challenge a business over the use of just the term ‘chartered’.
“We will contact Unbiased to make them aware of firms listed on their site as chartered when they do not hold this status with the CII.”
Accuracy
Karen Barrett, chief executive and founder of Unbiased, also said that the profiles with incorrect chartered firm status quoted in the reports “is actually 0.2% of our subscriber base”.
She added that the firm takes “the accuracy of the professional qualifications on profiles extremely seriously” and communicates “regularly not only with our subscribers but also the CII”.
Barrett said that the firm were “already in the process of updating profiles” following a Chartered Institute for Securities and Investments (CISI) and CII accreditation check last month.
“We have an ongoing relationship with the CII and have long been in discussion with them to automate the validation process,” she added. “Any requests they may have for us to update profiles is a natural part of that relationship.
“We are already educating professionals during the sign-up process on the difference between firm and individual accreditations given the similarity of the chartered badges and nomenclature.
“We are also putting into place additional measures like the in-account prompts to advisers to update the accreditations listed in their profiles. In most instances, the inaccuracy is a genuine error and down to a lack of understanding of the individual and firm accreditations rather than intent to mislead,” Barrett said.
IA contacted the Financial Conduct Authority (FCA) to see what the regulator will be doing to stop firms claiming chartered status when they do not have the accreditation. The FCA did not reply in time for publication.
