A professional financial advisory association for troubling times

Like many sectors, wealth management and financial advice must work hard to keep up with the times. How many shock situations have happened lately on the social and geopolitical scene in Europe that affect investments, pension funds, savings? Off the back of Covid-19 pandemic has come global supply chain collapse, war, inflation, depreciation and the lingering effects of Brexit, to say nothing of ever-tightening regulation. It makes for a perfect storm that will be a huge challenge for any business to weather.

 

Given all this, it’s no surprise that financial advisory services are in high demand, with overworked advisors and planners expected to meet increasingly higher bars. Let’s look at the skillset that makes a qualified financial planner.

 

The qualities of the financial planner

 

The complexity of financial planning today requires perfect dexterity in recommending products and solutions, a high degree of empathy, an ability to present information in an accessible format and exceptional listening skills. Added to this is an unfailing mastery of the regulatory framework in the broadest sense, including MiFID II, AML and many others. The advisor’s role is to have command of their subject, understand their customer’s particular needs and reducing what can be an overwhelming amount of information into an easy and informed choice.

 

Defining the scope of the job and training advisors and planners who are perfectly equipped to do it is a task of growing importance. Thankfully, there is an institution in Europe which looks after the standardisation of financial advice services and the certification of advisors according to a single, unified European criterion.

A unique European framework for training and certification of financial advisors and planners

 

EFPA Europe is more than just a professional association of financial advisors and planners, however. It also acts as a think-tank for the financial advice industry, and a certification body dedicated to standardising requirements and levelling the playing field for financial advisers and planners across Europe. Its members are financial advice practitioners who hold some level of EFPA certification.

 

Today EFPA Europe operates in 12 countries and certifies financial advisors and planners across the entire value chain, from retail banking to private wealth management firms. EFPA is recognised by the European Securities and Markets Authority (ESMA) and by the local regulators in each EFPA country. In this sense, it is quite unique.

 

EFPA membership is characterised by the annual follow-up on advisors’ qualifications: those who want to prevent their certification from expiring must commit to following a Continuous Professional Development (CPD) programme. A EFPA-certified professional thus is guaranteed to be at the cusp of cutting-edge knowledge and practices for the rest of his or her working life.

 

The importance of cultivating financial knowledge and professionalising financial advice

 

Helping investors and individuals navigate through the complexities of the financial world and build sustainable investment practices is critical to the wellbeing of modern European society. Recent evolution of the financial industry has been phenomenal and has even become asymptotic since the global financial crisis of 2008. A real in-depth transformation is happening. Managing such major changes makes adequate continuing education crucial. Fortunately, nowadays the individual approach to financial advice is making way to teamwork, with multidisciplinary skills that make it easier to provide customers with holistic and appropriate solutions.

 

Twenty years ago, anybody in any European country could call themselves a financial advisor and advise clients on wealth management. Thankfully this has changed: today the financial advisory profession in Europe is thoroughly regulated. Perhaps too regulated, according to some, given the paperwork it’s necessary to complete to offer or receive advisory services. But all of it comes for the greater good of the customer.

 

And since complexity is now the rule and no longer the exception, advising your client without the appropriate knowledge and competencies framework represents a significant reputational risk for the advisor as well as for his employer.

 

ESMA’s guidelines on knowledge and competences have strengthened the need for professional certification. Only a recognised diploma can guarantee a certain level of professional skills.

 

EFPA Europe’s mission

 

EFPA Europe exists as a non-for-profit umbrella association at European level, acting as the leading professional standards-setting body for financial advisors and planners in Europe, building public confidence and trust in the profession. EFPA influences the market behaviour of its certificate holders, guiding them in knowledge, skills, lifelong learning, behaviour and ethics.

 

EFPA achieves this by collaborating with regulators to help further unify standards and requirements and ensure that best practices and policies are adopted at a pan-European level. There is still a long way to go, but continuing expansion into new countries and closer collaboration with local regulators will, hopefully, lead to a ripple effect, as the benefits become more apparent to both certificate holders and participants in the financial sector at large.

 

EFPA strives to provide continuous education to increase the relative lack of financial culture and knowledge that exists amongst Europeans in general, especially on issues related to ESG and sustainability. Transferring clients’ sustainability preferences in pursuit of the fight against climate change and for greater decarbonisation and biodiversity, is particularly important. And although its focus is on core certification levels, EFPA also pledges to continue participating in financial education programmes, that also includes ESG training, presented in adequate and effective formats.

 

Flagship EFPA certifications

 

A deeply European syllabus focused on the essentials and client-centricity make EFPA training practical and practicable, according to its certificate holders.

 

The highest-level EFPA professional diploma is the European Financial Planner® (EFP) certificate (EQF 6) with a syllabus covering all aspects of financial planning and wealth management for the corporate world as well as private banking. The first step on the road towards EFP is the EFA (European Financial Advisor®) qualification, focused mainly on investment and private banking. Individuals who have successfully obtained the EFA and become EFPA members can feel supported by the EFPA network as they progress further in their career.

 

Up to date with new regulations

 

In line with the ESMA Guidelines on the assessment of knowledge and competences, EFPA has created two additional diplomas to cover more basic advisory services, as identified by ESMA guidelines: European Investment Practitioner® (EIP) and European Investment Assistant® (EIA). These certifications are not related to the process of obtaining EFP or EFA, require less training and are designed to meet the needs of professionals who, at whatever stage of their career, aspire to a more straightforward way of gaining a higher level of certification.

 

EFPA has also launched the EFPA ESG Advisor Certificate, which has proved very popular. ESG is a new field that is still evolving, and investors who ignore its importance would be making a grave error, according to EFPA representatives. Given today’s chaotic energy markets, taking ESG into account will help advisors to stay current and keep their advice relevant.

 

Providing these different levels of certification, all of which comply with ESMA standards, has proven an effective model. In little more than 20 years of existence, the EFPA name has become a trademark in countries such as Spain, Italy and the Czech Republic. As well as holding qualifications, EFPA professionals abide by a strict code of ethics which is accepted upon certification and provides an important additional reassurance to their clients.

 

Finally, online training, examinations and continued professional development allows also professionals from third countries to become certified and effectively join the EFPA professional community.

 

The value of certification to different financial sector participants

 

The employer benefits from the certainty that his employees are perfectly aligned with ESMA guidelines on knowledge and competences, elements increasingly controlled by external audit and regulations.

 

To the employee or advisor, EFPA certification represents the best insurance against the risk of obsolescence (through EFPA CPDs), which has never been greater in the financial industry.

 

For accredited course providers, the EFPA label is a seal of recognition of the quality of their training programmes and ensures quality monitoring over time.

 

A modern, continuing education

 

In an ever-more-demanding and restrictive world, continuing education must be flexible and practical and help instead of hinder. As it is the only authentically cross-border financial certification provider within the EU, EFPA’s vision is to work with the right partners to provide efficient and accessible CPD that achieves adequate standards and increases the level of training and competencies across the board.

 

Future plans

 

EFPA will continue to support professionals in continuously updating their knowledge and skills and make itself available to assist its members to best fulfil their obligations and remain at the forefront of financial advice to private clients.

 

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To learn more about EFPA Europe, please visit:

efpa-eu.org/

Inquiries:

info@efpa-eu.org

Follow on LinkedIn:

www.linkedin.com/company/efpa-europe