Re-evaluation test for adviser market

The FCA’s Retail Investments team has collaborated with The Chartered Insurance Institute (CII) to create a re-evaluation test of the knowledge required to practise as a retail investment adviser. The CII will make the ‘Regulated Retail Investment Adviser Re-Evaluation’ available from 1 October 2018. This is part of the FCA’s drive to raise the standards and competence of Financial Advisers.

The level 4 Diploma became the standard when the Retail Distribution Review (RDR) came into force at the start of 2013. Advisers complete a minimum of 35 hours continuous professional development each year with the aim of maintaining and updating their knowledge. Only a few large firms test their adviser’s knowledge yearly as part of their Statement of Professional Standing.

The CII believes that advisers having a good level of knowledge is the foundation to giving sound financial advice. This is particularly the case with the more technical aspects of financial advice.

Sian Fisher, CEO of the Chartered Insurance Institute stated: “It is critical to consumer confidence that advisers maintain the comprehensive and up-to-date knowledge that supports excellent advice. This initiative between the CII and the FCA has been a great opportunity for us to harness our expertise to assist professionals in evaluating how well their CPD has consolidated and developed their previous learning, particularly as the market and its regulation has evolved. CPD is vital for maintaining knowledge and this initiative provides advisers with the opportunity to demonstrate how they have successfully fulfilled the required 35 hours CPD on successful completion of the test.”


Why has this re-evaluation test been developed?
At the request of the FCA the CII was asked to produce a re-evaluation test that could be formally tested to demonstrate Level 4 knowledge had been maintained.

Why has the FCA collaborated with the CII?
The CII is the largest Accredited Body (AB) having approximately 2/3rds of the total financial advisers as members and SPS holders.

When will the re-evaluation test become available?
1 October

How many questions is the test?
100 MCQ, see syllabus on the website for more detail

How long is the test?
2 Hours

Who is eligible to take this?
Anybody that wants to.

Where can I take this test?
This test is formally invigilated, so to achieve that the test will be taken at CII exam centres.

How can I book to take this test?
You can book this test exactly the same way as you do CII examinations, via the website or by calling CII customer services.

What study material is available to support me?
As a PFS / CII member you get access, free of charge, to all of the R0 study text manuals online, simply log on to the PFS / CII website and go to the ‘Knowledge’ section.

Are the other AB’s going to offer alternative tests?
The FCA have made the other AB’s aware of this initiative and will work with them if they choose to set up their own test.

Who is responsible for setting the questions?
The CII. The questions are from their R01-5 question bank; part of the Level 4 Diploma in Regulated Financial Planning.

Is this mandatory?

Will firms meet FCA requirements by passing this test?
There is a pass mark of 65%. Passing the assessment will be a true test of the broad knowledge needed by a holistic financial adviser

What are the 100 questions based on?
The test will contain 100 questions across areas of the CII’s R01-5 syllabi, prioritised by the potential for impact on the suitability of advice. The areas are as follows:

R01 - Financial Services, Regulation & Ethics

R02 - Investment Principles and Risk

R03 - Personal Taxation

R04 - Pensions and Retirement Planning

R05 - Financial protection

Does this count towards 35 hours of CPD? If yes, how many hours?
The successful passing of this assessment would count as 35 hours of structured learning if it was supported by an identified learning need and a reflective statement. If a pass is not achieved, then you can use the learning towards the test as part of your CPD submission.

Can I take this test every year to demonstrate my knowledge has been maintained?

Are there implications for firms who choose to complete CPD in another way? (i.e. if test isn’t mandatory)

Is this the only way to demonstrate competence?
No. This is one way to test technical knowledge independently.

Is there a cost involved to firms?
The CII fee to take this test is £110 for PFS / CII members and £150 for non members

Will there be a cost to the FCA?

Will the test be updated/changed on a regular basis and if so how often?
Yes. As the question bank in R01-5 change so will the test.

Will the FCA monitor the results in terms of industry passes and fails?
The CII have agreed in principle to share the outcome of the overall results and the key areas of strengths and weaknesses. If a firm asked its employees to take the test as a way of demonstrating competency to the FCA then the firm would need to send them the results. No individual / personal results will be sent from the CII to the FCA.