New British Standard for Personal Financial Advice
BS ISO 22222:2005 Personal financial planning. Requirements for personal financial planners

The long awaited best practice standard has taken The International Standards Organisation (ISO) and the British Standards Institution (BSI) seven years to develop. The major trade and professional bodies, such as the FSA, Institute of Financial Services, AIFA, The CII and the consumer group Which? have played a pivotal role in the development of the standard. ISO 22222 is aimed at increasing client confidence by providing an internationally agreed benchmark for a high global standard of service. The standard covers the ethical behaviour, competence and experience required of a financial planner. This also enhances the transparency and efficiency of the process for personal financial planning.

The British Standards Institution (BSI) has recently launched a new standard in the UK for personal financial planning. The standard will raise service levels for consumers and set a benchmark for practitioners beyond the current regulatory requirements allowing them to differentiate themselves in the marketplace.

The standard will specify the ethical behaviour, competence and experience required of a financial planner and enhance the transparency and efficiency of the process. BS ISO 22222 Personal financial planning – Requirements for personal financial planners, codifies best practice in financial planning across the world and will help to increase consumer confidence. This was achieved with the help and guidance of Standards International.

With 14% of the population having purchased products through Financial Advisers, they are the single most important channel for distributing financial products in the UK. Furthermore, life and pensions products account for 50% of the UK savings and investments market making the UK by far the largest market for these products in Europe. However, one of the major issues reported by consumers when seeking financial advice is uncertainty over whether they can trust their financial advisers. And, with the vast amount of investment schemes and financial planners for customers to choose from, they are often confused about where to turn for advice on planning for retirement or how best to invest their savings.

BS ISO 22222 specifies the requirements for performance, assessment methods and continued competency which a planner can achieve by following training programmes and maintaining a record of these. The standard also provides a framework that covers all aspects of the personal financial planner’s ethical behaviour and specifies the requirements, content and length of experience they must have. It is applicable to all financial planners regardless of their employment status.

The standard defines the six steps of the personal financial planning process to provide clarity for the professional and increase transparency for the consumer:

1. Establishing client/planner relations – including a written record of the scope of the relationship, the planners qualifications and experience, and full disclosure about conformity to the standard;
2. Determining goals and gathering data – such as household asset liability and cash flow, statements, legal documents, economic assumptions, immediate needs and others;
3. Evaluating the client’s financial status – written outline for client of strengths and vulnerabilities, compared with goals, plans and restrictions;
4. Developing and presenting the financial plan – a written list of suitable and usable recommendations relative to the outcomes of the previous steps of the process;
5. Implementing recommendations – planner can assist directly or indirectly with implementation and provide documentation where necessary;
6. Monitoring the plan recommendations - provide documentation as to the status of each recommendation e.g. acceptance, modification, completion.

Keith Churchouse said, ‘I am delighted with this accolade and will further provide further confidence to clients that they are receiving high quality advice and service from both our main company, Churchouse Financial Planning in Guildford High Street and associated offerings, such as www.advicemadesimple.com. We look forward to maintaining this quality standard.’

Please note that this is for guidance only and we recommend that you seek further advice from an Independent Financial Adviser before proceeding further.  The Financial Services Authority does not regulate taxation advice.