UAE’s financial advice industry is giving out a clarion call to adopt industry-recognised and standardised qualifications for financial advisers in the face of imminent regulations and demand from discerning customers.
“Absolute need” is the term used by key industry players while talking about the requirement for qualification for advisers.
Navin Nihalani, founder and chief executive of Compass Insurance Brokers, said that there is an absolute dearth of quality advisers and it’s time the industry implemented standardisation of qualifications.
“There is absolute need for having qualified advisers now that the regulators too are moving towards this direction,” said Krishnan Ramachandran, chief executive officer, Barjeel Geojit Financial Services.
While Taru Singhal, head of IFA distribution Middle East, Zurich International Life, said: “The advice industry is not any different to any other and industry recognised qualifications set a standard by which advisers have to abide. You would not expect a lawyer, doctor or accountant to practise without the right qualifications.”
And Ashok Sardana, managing director of Continental Insurance Brokers, is of the view that it should be mandatory for all advisers to be qualified to some level to provide advice as they are dealing with people’s life savings and retirement funds, and therefore firms cannot have non-qualified advisers advising people.
Continued education
The industry is calling for a continued education programme as a majority of advisers are mere sales people with little product knowledge. These ‘unqualified’ people often indulge in mis-selling of investment products.
A few adviser firms have started collaborating with institutions such as the Chartered Institute for Securities and Investment (Cisi) and Sharjah-based Emirates Institute for Banking and Financial Studies (EIBFS).
Nihalani said his company has started working with Cisi to prepare advisers with the required certificates and courses, with a minimum qualification required to be part of the team.
People need good quality financial advice and the future looks positive for the firms that can demonstrate the value they can add to meet customer needs. The industry is continuously evolving and so are the people associated with it.
The market is also evolving as is the way customers want to interact with financial service providers. Only a specialisation can help advisers focus on key areas in the clients’ financial plan.
Poaching prospects
The industry is finding it difficult to attract new ‘resourceful’ staff and retain them in the wake of uncertainty and volatility in the investments markets.
To make matters worse, there is an element of reputation that took a beating when consultancy Insight Discovery said in its Middle East Investment Panorama report that advisers from banks and independent financial advisers have one of the worst reputations in the UAE when it comes to professions.
“Some companies, who have already engaged less experienced and ‘differently-qualified’ employees, face the challenge of redundancy and the only way out is poaching, making use of the relaxed labour rules and sponsorship regulations in the country. Those who have been rendered redundant for want of the required qualifications should be encouraged to upgrade their skills.
Zurich’s Singhal suggests that financial advisers should be encouraged to upgrade their qualification and keep learning, like they say “by investment in knowledge is the best investment you will make”.
This will not only show to customers that they have suitable qualifications to do their roles but should also increase the level of professionalism in the industry. Regulators, providers and advisers all have a role to play in the evolution of the market in the UAE.
“The draft regulation issued by the Insurance Authority suggests that there will be a register for individual advisors. This will be regulated and reviewed based on the customer outcomes. That means advisors will need to take a longer-term view on their career options and do everything possible to be successful which includes investing in themselves for ongoing profession development and looking after their customers,” he said.
“One should be able to count on an adviser to give the right advice. There has to be a career path for these advisers. So that in the long run, they can grow, build a long-term relationship with their clients, build a steady stream of income a wide client base,” said Sardana of Continental Insurance Brokers.
