When you step into the world of financial services, it’s easy to see how confusion can arise between the roles of a Conduct Regulator and a Professional Body. Let’s clear that up.
If you’re a financial services professional, you are (hopefully!) qualified and an active member of a professional body. These professional bodies bind their members to a strict code of conduct, ensuring that you act professionally, maintain high standards, and keep your knowledge up to date. You’ll be listed on their register, which shows your title, accreditation, and commitment to Continuous Professional Development (CPD). There are over 70 professional bodies and trade associations across the UK financial services sector, all working to elevate professionalism in the industry. I know this firsthand, having led the Transparency Taskforce’s Market Integrity Team, which audited the codes of conduct of these bodies to present a white paper to Parliament, aiming to inform best practices and raise standards across the board.
Now, the Conduct Regulator plays a different role. Created by statute, these regulators oversee specific areas of financial activity where there’s a perceived risk of misconduct. A prime example is the Financial Conduct Authority (FCA), set up under the Financial Services and Markets Act 2000. The FCA monitors individuals and firms that engage in activities like the manufacture and distribution of retail investment products, making sure they comply with the rules and standards set to protect consumers.
Here’s the key difference: Professional Bodies maintain professionalism, ensuring their members meet ongoing professional standards through examination and CPD, while Conduct Regulators oversee compliance, monitoring the conduct of financial services activities to prevent consumer harm.
What’s interesting is that being regulated by the FCA is sometimes seen as a badge of honour. But should it be? In reality, it means your activities carry a higher conduct risk, which could lead to serious consumer detriment if left unchecked. The true badge of professionalism comes from being a member of a respected professional body—one that upholds your competence and ethical standards.
So, when dealing with financial services professionals who aren’t engaging in FCA-regulated activities, how can you ensure they’re qualified, accredited, and committed to good conduct? The answer is simple—check their professional body register, not the FCA’s.
At the Academy of Life Planning, we’ve created a professional pathway for professional financial planners who aren’t FCA-registered financial advisers. But this pathway isn’t just for financial planners; it’s open to financial coaches, and even finfluencers. Why? Because generic financial advice is for everyone and can be delivered to groups, via online videos, or even through subscription services—meaning we can reach the underserved 92% of the population that FCA-registered financial advisers often overlook. And best of all, we can do this in an affordable and accessible way.
Take Martin Lewis, for example. He’s made it clear: “I am not a registered and regulated financial adviser.” Yet, he’s one of the most trusted voices in finance. How does he do it? He’s verified through his professionalism, not by the FCA.
This raises an important point about finfluencers. According to research by Barclays, 51% of people who turn to social media for investment advice don’t verify the credibility of the source. This leaves them vulnerable to scams and poor financial decisions. Finfluencers can be incredibly helpful, but if you want to make sure they’re giving sound advice, check if they’re accredited by a professional body. After all, you won’t find them on the FCA register unless they’re also involved in selling regulated products.
The good news is, with a little due diligence, you can verify their credentials and trust their advice, just like you would with a professional financial planner. And at the Academy, we’re making it easier than ever for professionals to get accredited, and for the public to access high-quality, reliable holistic wealth planning advice.
So, next time you’re looking for generic financial advice, whether it’s from a planner or a finfluencer, remember—professional bodies are your best friend in ensuring the advice you get is trustworthy and in your best interest.
If You’re a Finfluencer, Coach, or Planner Seeking Professional Registration and Accreditation, Here’s Your Path
Are you a finfluencer creating valuable content but not on the FCA register of product sellers? Do you want to enhance your credibility and take a step toward professional registration and accreditation? You’re in the right place.
At the Academy of Life Planning, we’re offering a pathway to professional recognition for finfluencers, financial coaches, and planners who don’t sell products but want to deliver trusted, high-quality financial guidance. This route allows you to be recognised for your expertise and gain the professional respect you deserve, without needing to wear the hat of a product salesperson.
Why not come along to our event, “Financial Planner Engagement: A Pathway to Professional Success Without Product Selling,” on Thursday, 24th October? We’ll be joined by industry leaders from the Chartered Institute for Securities & Investment (CISI) to discuss how you can become a Certified Financial Planner (CFP). As a CFP, you’ll be able to provide holistic financial planning advice that focuses on your clients’ life goals and wellbeing—without ever having to sell a financial product.
If you’re looking to elevate your career and serve your audience with even greater confidence and credibility, this is the perfect opportunity. You’ll also be part of a movement that champions financial education, empowerment, and accessibility, reaching the 92% of the mass market who are underserved by traditional financial advice.
Special Event: AoLP Partner Parade
Date: Thursday, 24th October
Time: 4:00 PM (GMT)
Venue: Zoom (Free Registration)
Register here: [REGISTRATION LINK]
Once registered, you’ll receive a confirmation email with details to join the event.
This is your chance to engage in a fulfilling career that aligns with your values, supports your clients, and offers you the professional respect you deserve. Let’s reshape the future of financial services—together. Join us on this journey toward professional success and purpose.
We look forward to seeing you there!
Question & Answers
Q: What’s the main difference between a Conduct Regulator and a Professional Body?
A: A Conduct Regulator, like the Financial Conduct Authority (FCA), focuses on regulating activities in financial markets to protect consumers and maintain market integrity. They ensure that firms and individuals follow rules to prevent misconduct.
A Professional Body, like the Personal Finance Society (PFS), is about maintaining professional standards. It helps its members stay up-to-date with industry knowledge, ethical practices, and professional development through training, CPD, and a code of conduct.
Q: Do I need to be regulated by the FCA to be considered a professional in financial services?
A: Not necessarily. Being regulated by the FCA is required if you’re involved in selling regulated financial products or conducting activities that fall within their scope. However, being part of a Professional Body, like the PFS, demonstrates your commitment to professionalism, even if your role doesn’t require FCA regulation. This is important for building trust and ensuring ethical standards are met in non-regulated financial activities like coaching or planning.
Q: What role does a Professional Body play if the FCA is already regulating the market?
A: The FCA ensures that financial services firms and individuals are complying with regulations and rules to protect consumers. Meanwhile, Professional Bodies ensure that individuals maintain high ethical and professional standards. The PFS, for example, offers CPD, ethical guidelines, and a professional network to help financial professionals grow and develop, beyond just compliance. While the FCA focuses on protecting consumers, a Professional Body focuses on developing the professional.
Q: Why is being a member of a Professional Body important if I’m already following FCA regulations?
A: While FCA regulations ensure you’re compliant with the law, being part of a Professional Body shows that you’re committed to ongoing development and ethical behaviour. It sets you apart by demonstrating that you adhere to higher standards of professionalism. It’s a way to enhance your reputation, build trust with clients, and showcase that you are continuously improving your skills and knowledge.
Q: How do I check if someone is a member of a Professional Body?
A: You can verify membership by checking the public registers provided by Professional Bodies such as the PFS. This ensures that the person has the relevant accreditations, titles, and Continuous Professional Development (CPD), showing they are committed to ethical and professional standards. It’s an easy way to ensure you’re working with a trusted financial professional.
Q: If I’m not involved in selling financial products, how can I build credibility as a financial professional?
A: Even if you’re not selling regulated products, being part of a Professional Body like the CISI or PFS helps you build credibility. It shows you’re committed to maintaining professional standards, developing your skills, and adhering to a code of ethics. This is essential for building trust with your clients and ensuring you provide the best possible service, whether you’re a financial planner, coach, or finfluencer.
Q: How does being regulated by the FCA differ from being part of a Professional Body?
A: Being regulated by the FCA means you’re following specific compliance rules to protect consumers, especially when selling financial products. Being part of a Professional Body goes beyond that—it focuses on your professional development, helping you stay ethical, competent, and client-focused through ongoing education and adherence to a code of conduct. In short, the FCA ensures you follow the law, while a Professional Body helps you grow as a trusted professional.
These Q&As are designed to clarify the different roles of Conduct Regulators and Professional Bodies, while highlighting the value of membership in a Professional Body for financial professionals.
Example: PFS Code of Conduct
The Personal Finance Society (PFS) Code of Conduct is designed to uphold the highest professional and ethical standards within the financial planning profession. As a professional body, the PFS expects its members to act with integrity, transparency, and in the best interests of their clients at all times. This commitment to excellence ensures that members are trusted and respected, both within the industry and by the public they serve.
The Code of Conduct covers several key principles, including:
- Acting with Integrity: Members must be honest, fair, and reliable in all their professional dealings.
- Maintaining Competence: Members are expected to continuously develop their knowledge and skills through CPD (Continuing Professional Development) to provide up-to-date and competent advice.
- Client Interests: The client’s needs must always come first. Members are required to provide advice that is clear, appropriate, and tailored to the individual.
- Avoiding Conflicts of Interest: Financial professionals should manage or avoid situations where their personal interests may conflict with their clients’ best interests.
- Maintaining Trust and Confidence: The public and clients need to be able to trust PFS members, which means members must demonstrate professionalism and respect confidentiality.
When it comes to enforcing these standards, the PFS has the power to investigate any complaints or allegations of poor conduct against its members. If a member is found to have breached the Code of Conduct, the PFS can take disciplinary action, which may include:
- Warnings or reprimands.
- Fines or additional training requirements.
- Suspension or expulsion from the society in more serious cases.
In extreme circumstances, the PFS holds the power to strike off members for gross misconduct or repeated breaches of the Code. This step is reserved for cases where a member’s behaviour is deemed harmful to the integrity of the profession or damaging to client trust. Being struck off means the individual can no longer represent themselves as a member of the PFS or benefit from the credibility that comes with membership.
The PFS Code of Conduct is not just about punishment; it’s about upholding the standards that benefit both the profession and the public. By adhering to these principles, members ensure they provide trusted, professional services, building stronger relationships with clients and enhancing the overall reputation of the financial planning community.
For financial professionals, being part of the PFS is more than just a membership—it’s a commitment to maintaining the highest ethical and professional standards. This ongoing commitment strengthens trust, builds lasting client relationships, and contributes to a better financial services industry for all.
By following the Code of Conduct, you’re not only protecting your clients but also your own professional reputation.
How Does This Differ From FCA Powers?
The Personal Finance Society (PFS) and the Financial Conduct Authority (FCA) both play crucial roles in maintaining standards within financial services, but their powers and focus are quite different.
The PFS is a professional body, meaning its primary role is to support, educate, and set standards for its members—financial professionals. The PFS Code of Conduct is designed to ensure its members act ethically and maintain professional competence through continuous development. The PFS has powers to investigate misconduct and, in serious cases, suspend or expel members, but these actions are largely focused on professionalism and upholding the standards within the financial planning profession.
On the other hand, the FCA is a statutory regulator created by the government. Its role is much broader, and its powers are more extensive. The FCA’s main responsibility is to regulate financial markets and protect consumers from harm. It oversees firms and individuals who sell regulated financial products, ensuring they comply with strict rules designed to maintain market integrity and consumer trust. This includes areas like:
- Ensuring firms treat customers fairly.
- Preventing market abuse.
- Enforcing rules around transparency and accountability in financial transactions.
The FCA’s powers go beyond suspending or striking off individuals; they can impose financial penalties, revoke licences, and in extreme cases, prosecute for criminal misconduct. While the PFS focuses on maintaining professional standards and helping its members succeed through good conduct, the FCA’s remit is to enforce compliance and protect consumers from malpractice. It regulates activities like selling investment products or providing specific financial advice, which carries a higher risk of consumer detriment.
To sum it up:
- The PFS ensures members maintain professionalism and competence, with powers to investigate and discipline members for misconduct within its professional framework.
- The FCA enforces regulatory compliance across the entire financial services market, with the power to penalise, revoke licences, and prosecute firms or individuals involved in misconduct or malpractice.
If you’re a financial professional, you’ll likely need to comply with both sets of standards—demonstrating your professional competence through the PFS while ensuring you follow the FCA’s regulations in any regulated financial activities you perform. By doing so, you maintain the highest ethical standards while keeping your clients safe and well-served.
The good news is that by following these standards, you’re building trust with your clients and enhancing your reputation as a reliable, ethical, and knowledgeable financial professional. That’s a win for you and the people you serve.
Questions & Answers
Q: What’s the difference between the PFS and FCA when it comes to my conduct as a financial professional?
A: The PFS (Personal Finance Society) focuses on maintaining your professionalism by providing you with a code of ethics, Continuous Professional Development (CPD) opportunities, and a supportive community. Its role is to help you stay competent, ethical, and client-focused throughout your career.
The FCA (Financial Conduct Authority), on the other hand, is a regulator. Its primary role is to ensure that financial markets operate fairly and protect consumers from harm. The FCA ensures that you comply with rules for selling products and services, while the PFS helps you grow as a trusted professional, going beyond just compliance.
Q: I can’t see how paying the PFS fee each year affects my conduct. Isn’t it just for the SPS?
A: It’s understandable to feel that way, but the PFS offers much more than just the SPS. Membership supports your ongoing professional development, gives you access to a strong network of peers, and reinforces your credibility with clients. The PFS also helps you stay on top of ethical issues and emerging trends through CPD, so you can offer the best possible advice. It’s about investing in your professional growth beyond just ticking boxes.
Q: If the FCA already regulates me, why should I bother with a professional body like the PFS?
A: The FCA ensures you meet regulatory standards, but the PFS helps you build and maintain your professional credibility. The FCA is there to make sure financial services are delivered safely, but the PFS helps you elevate your reputation by focusing on ethics, professionalism, and ongoing development. Being part of a professional body shows clients that you are committed to high standards and continual improvement.
Q: What’s the advantage of PFS membership if I’m not involved in selling regulated financial products?
A: Even if you don’t sell regulated products, being a member of the PFS offers significant benefits. It demonstrates your commitment to professionalism and ensures that you remain updated on best practices in financial planning, ethical standards, and personal development. This is key for building trust and credibility with clients, regardless of whether you’re offering product-specific advice.
Q: How do I benefit from CPD offered by the PFS?
A: CPD (Continuous Professional Development) through the PFS ensures you stay at the cutting edge of your field. It keeps you informed about new regulations, industry trends, and ethical considerations, helping you provide the best possible service to your clients. By engaging with CPD, you’re continuously improving your skills and knowledge, which not only benefits your clients but also enhances your career prospects.
Q: How can I check if a financial professional is a member of a professional body?
A: You can verify whether a financial professional is a member of a professional body like the PFS by checking the body’s membership register. This ensures they are bound by a code of ethics, have a commitment to ongoing education, and meet certain professional standards. It’s a great way to ensure you’re working with someone who prioritises professionalism and client interests.
By aligning with the M-Power Movement, the Academy of Life Planning demonstrates its unwavering commitment to financial empowerment. This partnership enhances our mission to provide comprehensive planning services, education, and tools, enabling individuals to take control of their financial futures. We believe in fostering a fairer society where financial knowledge is accessible to all, breaking down the barriers of traditional financial services. Together, we are redefining excellence and trust in the financial planning industry. Join us in this transformative journey.
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