Among the many damning assertions put forward by the Central Bank and Financial Regulator during its recent deconstruction of Ireland’s banking crisis was the need to better train financial services employees.

Sales staff and financial advisers, in particular, have been singled out for criticism. Pressurised short-term targets created mis-selling of financial products, and the correct credit controls were often bypassed in order to meet these.

Clearly, there’s a need to reform, and the high-level aim of the regulator is to create a fair and transparent financial market in a bid to improve Ireland’s international economic reputation.
Shockingly when you think about it, for the first time credit providers, intermediaries and brokers will be licensed and subject to specific consumer protection regulation, including new ‘responsible lending’ obligations.

They will likely be required to belong to a Regulator-approved independent dispute resolution scheme so that borrowers can pursue complaints free of change.

I previously worked for a number of years in a wealth management function for ANZ Bank in Australia, a role which required a formal qualification from the Securities Institute of Australia and ongoing professional development.

What struck me upon returning to Ireland was how far behind the on the regulatory side Irish financial services was compared to Australia. It wouldn’t be an exaggeration to say regulation and generally accepted best practice from my experience in the area of dispensing retail financial advice was at least 10 years behind the Australian model.

In one sense, regulatory crackdown is good news for financial advisors and sales staff. For a start, it means that there will be more professionalism, which engenders greater customer confidence and ongoing professional development means opportunities for career advancement are greater.

It’s also opens up new sources of revenue for them. By developing skills they were never required to acquire previously, this both broadens the type of client they have access to as well as creating a greater level of trust between customer and advisor due to increased levels of professionalism. And not before time.

In a nutshell, the regulator will require financial advisers and sales staff to undertake a minimum of 15-hours Continuing Professional Development (CPD) on an annual rather than three-yearly basis and will be phasing out ‘grandfathering arrangements’ (where experience counts in lieu of a recognized qualification).

As yet, it’s not clear exactly what this will involve. However, the work we’re doing with financial services organizations suggests a combination of accredited distance learning and workshop training programmes to address specific skill deficiencies.

It’s wise to take these very seriously. My experience in Australia suggests that organizations look to identify and address skills shortfalls through these tests. For example, some staff are more suited to more transactional type selling; others to long lead time intangible sales while others have a fear of cold calling or are more suited to low level tangible sales. There’s a possibility that you could be shifted to a new role if your skills are not up to scratch.

Expect these tests to be tough. They’re likely to examine your knowledge of a broad range of financial products, rather than your own niche area, before honing in-depth into your area of specialism.

My advice would be to identify areas where your knowledge is weak, and take proactive steps with you employer to address these before you’re forced to do so.

Inevitably, firms are going to give employees the opportunity to get up to speed with the regulator’s requirements. However, experience dictates that those who cannot make the grade will eventually fall by the wayside. There’s no time like the present to get ahead of the competition.

Greg O’Hanlon is a partner at GHI Consultancy Group, which provides online tests for financial services professionals.. For more information visit www.consultghi.com or email info@consultghi.com