It’s not a merger but it is a step forward for the Chartered adviser bodies and the Financial Planning profession and it’s long overdue.

Today three of the main professional bodies in the Financial Planning / Paraplanning / Wealth Management areas announced the Chartered Body Alliance, a new initiative to: “bring three leading financial services professional bodies together in a joint effort to promote the very highest standards across the sector and to embark on a range of joint initiatives aimed at achieving this ambition.”

It will be some time before we see the fruits but it makes a lot of sense for the three bodies involved, the Chartered Insurance Institute (including the Personal Finance Society), the Chartered Institute for Securities & Investment and the Chartered Banker Institute to collaborate rather than compete constantly as rivals.

This is an important initiative but it will require enthusiasm and stamina from the three bodies to keep things move ahead and to avoid running out of steam. It must result in action rather than words.

Importantly, the bodies say: “The Alliance will be... aimed at raising the level of professionalism and trust in the financial services sector.” These have long been identified as areas of weakness for all advisers so the whole advisory sector could benefit if this alliance works.

Realistically, I don’t expect the bodies to suddenly stop competing for members or service improvements, and in many ways a little competition is a good thing, but it cannot make sense for several similar bodies to spend so much time and energy on providing often similar services.

There’s a need for change because the professional body sector has changed. Many planners, for example, will be members of both the PFS and CISI but since the demise of the Institute of Financial Planning back in November 2015, things haven’t quite been the same. Many say that Financial Planning has lost some of its ‘mojo’ and direction, despite the new investment by the CISI and hard work by many leading figures.

In truth, the IFP had run out of steam by the time it merged with the CISI and ultimately it had to choose a bigger partner. That made sense because the IFP simply didn’t have the membership numbers and resources to compete properly with the PFS.

There is a strong argument that collaboration could lead to a stronger Financial Planning profession as the organisations play to their strengths rather than trying to do everything their rivals do.

There are many possibilities but it will take compromise by all the bodies to move things forward. One area of co-operation could be in qualifications, events and CPD. Members who belong to two or more professional bodies often find it a costly and time consuming exercise. Some effort to alleviate this would be good.

Ultimately, however, the public are probably completely baffled about the distinction between Chartered Financial Planner and Certified Financial Planner and that needs to be corrected so there must be a consumer focus too. There are few signs the consumer understands what the professional bodies do although there is some understanding of the value of the ‘Chartered’ title.

In the long run, if collaboration means greater consumer understanding of the benefits of holistic Financial Planning and some long term benefits for planners and paraplanners the profession will have taken a small but significant step forward. Unity could well be the answer the profession is looking for.

Kevin O’Donnell is editor of Financial Planning Today and a financial journalist with over 20 years of experience

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