Frequently Asked Questions
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Chartered title for firms
Q1. Is Chartered status simply the award of a title for a firm to use?
A: No, Chartered status brings with it a number of serious obligations. Chartered titles are jealously guarded by professional bodies and are not awarded lightly. A Chartered title is not simply recognition for staff having passed examinations and when extended to firms it carries additional significance.
The Chartered title is a public declaration that the advice given by a firm:
– is of the highest quality;
– is based solely on the researched needs of the consumer;
– is provided by someone not exceeding their level of competency.
It also signifies that a firm’s staff, where members of the CII, are governed by a Code of Ethics and Conduct and that disciplinary sanctions are applied to those who transgress.
A Chartered title is therefore a commitment to an overall standard of excellence and professionalism.
Q2. Can a sole trader who holds a CII Chartered title apply for Corporate status?
A: An unincorporated sole trader does not need to apply at all. By definition he or she is a Chartered title holder.
Q3. Can both limited liability companies and partnerships obtain Chartered status?
A: Yes
Q4. Is this offer open to networks?
A: No because a network is a collection of individual firms and it is at that level that we must look for compliance with any application..
Q.5 What is the definition of an executive director?
A: Directors to be considered in the 50% calculation are all those registered at Companies House, unless they have been specifically appointed on a non-executive basis.
If directors run the company on a day to day basis and employees are accustomed to act in accordance with their instructions, they are deemed to be executive directors. In the case of a limited liability company all the directors are executive unless they have been appointed in a non-executive capacity.
Non-executive directors have no executive role i.e. they do not run the business on a day to day basis. Their role is to bring a different perspective to the board and make a creative contribution to the board by providing objective criticism. Non-executive directors are appointed to that position (they will have a letter of appointment designating them as such).
Q6. Not every employee in a firm has to be Chartered in their own right. Is this not misleading to the consumer?
A: Our rules are designed to be consistent with those of other professional bodies.
All professional firms operate with a variety of disciplines and with staff at various levels of experience. A Chartered accountancy firm, for example, may have accounting technicians, part-qualified accountants and fully qualified chartered accountants. Each individual is assigned work within their level of competence and is supervised by a fully qualified accountant.
This is exactly the same for Chartered insurance broking and financial planning firms. Our Code of Ethics and Conduct and Chartered rules require that individuals only operate within their levels of expertise and that the firm is overseen by a Board, at least 50% of whose members are of Chartered status. Further, one of the directors is a designated ‘Responsible Member’, part of whose responsibilities is to oversee that the CII Code of Ethics and Conduct and Chartered rules are adhered to by all staff members.
Q7. If at least half of a firm’s executive directors or partners in a partnership have to hold a Chartered title is there a minimum number of directors/partners a firm has to have?
A: No, but at least one director or partner must hold the CII Chartered title for which corporate status is requested and that director or partner must be the Responsible Member.
Q8. Can executive directors/partners use other professional qualifications to qualify and if so what qualifications are acceptable?
A: The CII will recognise Chartered titles from other awarding bodies as comparable to the CII’s individual Chartered title providing the title held is directly relevant to the individual’s principle area of work and the awarding Chartered body concerned has a Code of Conduct (or Code of Ethics and Conduct) comparable to that of the CII. Directly relevant to the individual’s principle area of work means that a firm’s accountant who is a Chartered Accountant may be counted towards the 50% requirement, provided that the accountant is only acting in this capacity (accountant) for the company and does not advise clients, either as a broker in a firm of Chartered Insurance Brokers or a Financial Planner in a firm of Chartered Financial Planners. A listing of the Chartered titles which the CII will automatically recognise as equivalent can be found at Comparable Third Party Titles – other organisations will be considered on application.
Q9. Can a single firm hold more than one corporate Chartered title?
A: In accordance with the Bye-laws of the CII it is only permissible for a company or partnership to describe itself using the plural of a single chartered title.
Q10. Will there be a charter marque that firms can use on their marketing material?
A: Yes, there is both a marque and a form of words that can be used on company stationery, company signage, web, etc. Full brand guidelines details can be found online at cii.co.uk/chartered
Q11. What responsibilities and obligations attach to the nominated ‘Responsible Member’?
A: 1. The Responsible Member for a firm is the focal point for all matters concerning the use of the corporate descriptor “Chartered Insurance Brokers/Chartered Financial Planners. Guidelines, rules and regulations will be issued from time to time, and it is their responsibility to ensure their firm’s Board is fully aware of those requirements. They personally will be expected to take all reasonable steps to ensure their Board meets its obligations and must notify the CII at the earliest opportunity where there are circumstances preventing compliance.
2. If a firm falls below the requirements for Chartered Insurance Brokers/Chartered Financial Planners status (including, but not limited to, the minimum requirements for the number of individual Chartered Insurance Brokers/Chartered Financial Planners or equivalent on their Board, or the number of customer facing staff that are CII members), they must notify the CII immediately. The firm’s authorisation to continue to use a Chartered title may be at risk, irrespective of the reasons for non-compliance.
In the event of any non-compliance, we will work with the Responsible Member to overcome short term difficulties, agreeing the remedial action they need to take, together with the proposed timescale. It is not possible to define any such “period of grace” but we will take into account the circumstances of each case and will be fair both to the Chartered title-holding company and other CII stakeholders. The CII will not, however, sanction longer term default.
3. Paragraph 1.5 of the Code of Ethics and Conduct requires that members “Act only within the limits of personal competence and any limits of authorisation”. Responsible Members are expected to take all reasonable steps to ensure their Board is aware of its obligations in this regard and to notify the CII where a reasonable view is that the breaches are anything other than “one-off” exceptions in respect of which corrective action has been taken to prevent any reoccurrence.
4. Each year the Responsible Member will receive a renewal reminder. It is their responsibility to submit the firm’s application for renewal and to ensure the information provided is complete and accurate, to the best of their knowledge. This includes:
- Having made due enquiry, certifying that staff members notified to the CII under this scheme have complied with any CPD obligations that apply. Their personal CPD must also be up to date.
- They must also sign a declaration that they have no reason to believe any individual in their firm has committed a breach of the CII’s Code of Ethics and Conduct. Where they become aware of any such breach mid-term they must notify the CII immediately and not wait until renewal (see Code of Ethics and Conduct paragraph 5.11).
Q12. Are firms to be audited/inspected by the CII?
A: There are no current provisions relating to audit and or inspections. However the scheme is based on such provisions and requirements as may be introduced by the CII from time to time. The CII reserves the right to introduce such provisions in relation to the audit or other analogous procedures, of chartered title holders as it sees fit.
However, firms will submit an annual return confirming their compliance with the eligibility criteria (number of Chartered title holders; 90% customer-facing staff as members; etc). The CII will also monitor any complaints received from the public, etc.
Q13. How will the CII handle consumer complaints against a Chartered firm? What redress will the CII provide to the consumer if a complaint against a Chartered firm or member is upheld?
A: As the CII is not the industry regulator, consumer complaints e.g. regarding policy coverage or the performance of an investment product will be dealt with by the existing mechanisms of the sector’s complaints bodies and regulators such as by reference to the FSA or FOS. In every case however reference must be made to the firm concerned in the first instance. In so far as a complaint concerns an individual members behaviour however, a breach of the CII’s Code of Ethics and Conduct will be dealt with by reference to the CII’s Disciplinary Procedures (see Guide to Member Complaints on the “Contact Us” section of the web site cii.co.uk/cii/about/contactus
Q14. What happens if one of my staff is subject to disciplinary proceedings of the CII or other professional, statutory or regulatory body?
A: In the case of CII disciplinary action they will be notified by us. It is important that they take this seriously and that they attend any disciplinary hearing. The disciplinary panel has a variety of remedies at its disposal.
You should be aware that the disciplinary panel can withdraw individual Chartered status and recommend to the CII the withdrawal of corporate Chartered status, where the circumstances of the case warrant this.
Where another professional, statutory or regulatory body applies sanctions to an individual member of staff, full details including the nature of the offence committed and details of the sanction applied must be notified to the CII immediately. The CII will then consider whether the offence prejudices your firm’s licence to use the corporate Chartered title.
Q15. If 90% of customer facing staff have to be members of the CII is this not simply a way for the CII to get more members and increase its revenue? Surely companies already have their own internal standards to maintain?
A: No, this is about ensuring a common standard across the market which can be relied upon by anyone who transacts with the firm holding the title. The fact that all staff are required to comply with a code of ethics and conduct reinforces ethical practice. The pricing model was developed in consultation with the industry through the CII’s faculties and societies.
Q16. How do I decide which of my staff should be included within the requirement that 90% of customer-facing staff should be members?
A: The 90% rule is a practical guide on membership requirements. By requiring, as a minimum, only 90% of customer-facing staff to be members, it enables firms to exclude staff whose customer-facing activities are peripheral to the firm’s business activities. It also provides a degree of protection in respect of natural fluctuations in staff numbers, which could otherwise lead to a contravention of the membership requirement.
For guidance, we would expect all staff acting in an advisory capacity to be members. Beyond that, any member of staff that has customer contact should be included, such as para-planners, account-handlers and personal assistants who regularly liaise with clients. Typically, however, this would not include accountancy personnel, receptionists or the like, though it remains at the firm’s discretion as to whether to include these.
Q17. What do I do if my board falls below 50% Chartered members or my staff membership falls below 90%?
A: You must notify us straight away should either of these eventualities arise (do not wait for renewal). In turn, we will agree a realistic timescale for you to return to compliance with the rules. If you do not achieve compliance within that timescale, your license to use the corporate Chartered status may be withdrawn and corresponding use of the title must cease immediately.
Q.18 What if the 50% requirement is not met because there are some directors who are retired or ‘silent’ partners?
A: Providing that retired or silent partners are genuinely non executive (i.e. have no day to day say in running the business) they may be excluded from the 50% calculation.
Q.19 What if we do not have audited accounts?
A: In effectively licensing our trade mark (Chartered Financial Planner or Chartered Insurance Broker) to a firm we are endorsing the activities of that entity and hence there is a small risk to the reputation of the CII. The requirement for the production of annual accounts is a general one and it is intended to provide some corroborative evidence of professional standards applied by the firm. Clearly it is good practice for all firms to produce accounts to an appropriate standard, although not all are required (small limited liability companies for example) to be audited. However more specifically we require the information to provide the CII with corroborating data on the identities of the partners/executive directors and the average numbers of employees within the business. We need to be as sure as we can that a firm conforms with the application conditions by undertaking such corroborating checks of the other data provided as may be available. As a corollary we also need to demonstrate that we have applied as much due diligence to the application process as is proportionate in the circumstances. This is not only for our benefit. It is also for those who have gone through the process, been granted chartered status and have the right to expect us to look after their interests in protecting “the brand”.
Whilst 12 months accounts are a minimum we will consider accounts submitted in other forms when audited accounts are not a statutory or regulatory requirement. Please note however that this may delay the application process.
If audited accounts are not a statutory/regulatory requirement for a small company we will accept accounts prepared by their own accountant for submission to Companies House. The accountant however will need to be a qualified by a recognised accountancy body.
We do accept applications from newly formed firms where no accounts are available, providing the company is authorized by the FSA and subject to an undertaking that the first year's accounts are submitted as soon as produced.
Q.20 I have a number of part time staff, do they all have to become members?
A: Yes, if they are customer facing.
Q.21 Your guidelines state that other chartered titles are comparable to the CII’s chartered title so why haven’t I been given the equal number of credits for chartered title with the CII?
A: Because it is comparable in terms of professionalism and a commitment to a code of ethics and conduct. There may also be no overlap of syllabus.
Q22. What will the cost be?
A: There is tiered fee structure based on headcount. The fees have been kept at a level which reflects the costs to the CII in administering the scheme and also recognises the commitment made by firms in supporting CII/PFS membership/qualifications to-date. The pricing model was developed in consultation with the industry through the CII’s Professional Standards Board, faculties and societies. In any event the CII is a not for profit organization and so any surplus which did arise by definition is reinvested into the Institute and the services, products and examinations it develops.
Q.23 Can I pay by credit card?
A: Yes, but not over the telephone, you can complete the details on the application form.
Q.24 Why is the rationale behind the current pricing levels?
A: The pricing model was developed in consultation with the industry through the CII’s Professional Standards Board, faculties and societies. The fee has been set to cover the administration costs associated with the scheme. The work includes verifying applicant’s details, confirming eligibility, producing and issuing certificates and enforcing the scheme’s rules. There is also a wealth of supporting literature, a dedicated website and a “live” online directory.
We will also be heavily promoting the scheme in the coming months and years to the public to raise awareness and to showcase that title-holders are the leaders in their field.
The CII is a not-for-profit organisation and so any surplus which did arise by definition is reinvested into the CII and the services, products and examinations it develops.
We are confident that corporate Chartered status will deliver superb value to those firms which attain it. They will distinguish themselves from the bulk of the market and become part of an elite tier of advisers. Their status will be recognised by customers and fellow professionals and the effect will be to boost both their professional standing and their potential for commercial success.
Q.25 Should self employed consultants be included?
A: No because they are not on the staff and by definition are transient in nature being able to be turned on and off by a business at will by its executives.
Q.26 In the collateral for corporate Chartered status the CII refers to ‘professionalism’ and ‘professional firms’. What does it mean by these terms?
A: What constitutes professionalism, both for an individual and for a firm? This is a question we are increasingly being asked and a matter on which understanding is essential if we are to ensure that our professionalism will be securely rooted and able to flourish.
The CII has analysed how other professions (such as accountancy and the law) define and express professionalism. Where appropriate, we have incorporated these views into our own approach, enabling us to assemble a list of characteristics that articulate professionalism in insurance broking and financial planning.
It should be noted that, while the CII is a professional body that monitors and, where necessary, disciplines its members (the CII can and does publicise the withdrawal of Chartered titles from members), we do not police or regulate all the areas mentioned below. In some instances, these are the responsibility of the FSA or other bodies. But we believe that all professionals should comply with these requirements, irrespective of how they are governed.
Individual
- Members offer professional judgment, objective advice and act in the interests of the client
- Members observe a code of conduct or practice that describes the desired standards of behaviour
- High entry standards in the form of examinations that are not easy to pass and require an initial lengthy period of study
- The requirement to maintain a high degree of competence and expertise involving continual professional development
- Effective regulation in the form of an independent body responsible for setting disciplinary procedures and monitoring behaviour
- Members are subject to an objective form of censure and are accountable to the profession for any breach of expected technical and ethical standards
- The nature of censure is sufficiently punitive to encourage members to maintain standards in line with requirements. This typically includes being “named and shamed” and potentially barred from the profession.
Corporate
- A management with the experience and expertise to ensure the business model is sustainable and to implement the model effectively
- Corporate governance and systems that exert appropriate levels of control over the running of the business including risk management, maintaining adequate capital, record-keeping, training and competency programmes
- A culture that encourages the fair treatment of customers
- Encouragement of professional standards for employees through support for technical training and the development and encouragement of appropriate behaviour.
Q 27. What plans do the CII have to raise the profile of Chartered status?
A: The CII is committed to raising the standing of the profession of corporate Chartered status in the eyes of the public. We are investing considerable resource to achieve this aim and will develop our approach in conjunction with the Faculty of Insurance Broking or Personal Finance Society, as appropriate.
The individual Chartered Insurance Broker title has been in existence for some years. The arrival of the corporate Chartered Insurance Brokers title will accelerate the drive for recognised professionalism. We will work to increase the profile of professional insurance broking and inform consumers of the value of the qualifications held by Chartered Insurance Brokers and their commitment to ethical business practice.
The profession of Chartered Financial Planners is young and developing. We will work to increase the profile of professional financial planning, both within and outside the industry so that all parties understand the professional achievement and commitment to high standards of practice involved in attaining Chartered status.
As you will appreciate, changes of this nature, in particular influencing consumer understanding takes time. That said, we look forward to the challenges ahead and remain confident that our goal will be achieved.
Chartered title for individuals
Q1. What does an individual have to do to be eligible for the title?
A. To be awarded Chartered Financial Planner status, an individual will have to:
- Carry on business as a provider of financial planning advice to individuals or corporate entities
- Have five years’ experience in the industry (not necessarily postqualification) of a kind satisfactory to the Institute
- Be a member of the Chartered Insurance Institute (CII)
- Gain CII approved financial qualifications equivalent to first degree level
- Follow the CII’s Code of Ethics and Conduct
- Be able to demonstrate at least three years of Continuing Professional Development (CPD) and commit to an ongoing programme of continuing professional development.
Q2. Which CII approved financial qualifications are suitable?
A. An individual will need to hold the Financial Planning Certificate (or equivalent) and a minimum of 290 qualification credits which must include:
Six Advanced Financial Planning Certificate level units; or from 2007, completion of the Advanced Diploma in Financial Planning
Q3. What, if any, other qualifications/exams will the CII recognise as part of an individuals qualifying portfolio?
A. The CII already has an extensive accreditation procedure, details of which can be obtained from Customer Service.
Q4. How is Chartered status going to link with the new financial planning qualifications framework?
A. Chartered status is the pinnacle for the financial planning professional. The CII's new financial planning framework will support this professional progression by providing the essential learning and qualification to first degree level which is a requirement before Chartered status can be awarded. The new framework will also provide, via Personal Finance Society membership designations, ‘stopping off’ points to allow planners to demonstrate their levels of competence and that they are ‘fit for purpose’.
Q5. Can someone who meets the qualifying criteria just start using the title?
A. No, they must apply to the CII first and be given approval.
Q6. Who awards the title - the CII or the Personal Finance Society?
A. The Chartered Insurance Institute is the only body able to issue the Chartered Financial Planner title.
Q7. What rules govern the use of a Chartered title?
A. The CII must uphold the rules of its Charter. Holders of the title must comply with the CII's CPD requirements and abide by the Code of Ethics and Conduct.
Q8. Is there a CPD requirement prior to applying for the title?
A. Upon application we may ask to see evidence of three years’ CPD before accepting an application for a Chartered title.
Q9. What will the CPD requirement be once the title has been awarded?
A. The CII’s new CPD scheme introduced in October 2005 requires CPD to be achieved each year. The nature of the CPD will, to a large extent, depend on its relevance to each Chartered title holder.
Q10. How will you police holders of a title to ensure they abide by the rules?
A. Each month, the CII will select a random number of members to submit their CPD logs to monitor activity. A disciplinary process exists to deal with cases against members and a new complaints facility was introduced in October 2005 to allow members of the public to register a complaint against a CII member. The CII also works closely with the relevant regulatory and supervisory bodies.
Q11. How much will it cost someone to apply for and maintain the title?
A. There will be a one-off registration fee of £140 when applying for the title plus an annual membership fee of £140. The annual membership fee replaces any existing membership fee paid. The new fee will be effective from the next renewal for existing members.
Q12. At present you allow financial advisers to use their insurance and financial planning designations, can someone who qualifies for two Chartered titles use both as well?
A. No. CII members will be able to apply for one title only. This title should reflect the majority of the work that they carry out. The qualifications criteria will also need to be met.
Q13. Will the CII charge a fee to existing Chartered title holders to transfer to the new title?
A. The standard fee to change a Chartered title is £50.
Q14. What has the CII had to do to get the title approved?
A. As a Chartered body the CII had to gain approval for the title from the Privy Council. It is a condition of the Privy Council that an individual must be able to demonstrate relevant qualifications to first degree level before a Chartered title can be awarded.
Another key consideration for the Privy Council was that the CII already awards three Chartered titles. Chartered Insurance Broker, Chartered Insurance Practitioner and Chartered Insurer are regarded as the highest and most prestigious level of professional achievement for people working within the insurance industry. The addition of Chartered Financial Planner completes the range of Chartered titles needed to cover all the areas of financial services within which CII members work.
The CII has a Code of Ethics and Conduct and a robust disciplinary process already in place as part of the governance of the existing Chartered titles.
Q15. Does the initiative have the support of the market/market bodies, regulator and consumer groups?
A. All groups recognise the need to raise levels of consumer confidence in the financial services sector and to encourage consumers to manage their finances and make long term financial provision for themselves. Discussions are taking place with industry bodies and organisations and all contacted have voiced their support for this initiative.
Q16. Consumers just want a good deal from their financial products, how is Chartered status going to help?
A. The establishment of Chartered Financial Planner status introduces a new, internationally recognisable benchmark of quality and ethical practice for financial services professionals. This will re-assure consumers as for the first time financial services will be elevated in the public eye to the same standing as other Chartered professions, such as accountants, engineers and surveyors. Chartered status represents a sea change for the industry creating, for the first time, a financial planning profession. All holders abide by a Code of Ethics and Conduct and the CII has the sanction of a disciplinary process against members should this be necessary. This represents the first step in an evolving process. The CII will work with industry practitioners to ensure that the standards and practices associated with a professional body are established and maintained within financial services.
Q17. How can I show to the public I hold the title?
A. You can show the title on your business cards as long as the name is not shortened or abbreviated. The CII has also produced a Chartered Title Directory which it updates in February and August each year. The Directory includes the names of all those who hold a CII Chartered title and is available here
