ISO 22222

1. Introduction
2. Overview
3. Global adoption
4. Benefits
5. Auditing
6. Choosing a registrar
7. Route to registration
8. Costs
9. Contributing editor

BS ISO 22222:2005 Personal Financial Planning requirements for personal financial planners has been created with the objective of achieving and promoting consumer confidence by providing an internationally agreed benchmark for a high global standard of personal financial advice.

This standard specifies requirements and provides a framework that applies to the ethical behaviour, competencies and experience of a professional personal financial planner regardless of their employment status. The core six steps of the personal financial planning process are:

• Establishing and defining the client and personal financial planner relationship
• Gathering client data and determining goals and expectations
• Analysing and evaluating the client's financial status
• Developing and presenting the financial plan
• Implementing the financial planning recommendations
• Monitoring the financial plan and the financial planning relationship

To support the high level benchmark of best practice sits the requirements of:

• Ethical behaviour and financial planning
• Information security, client confidentiality and data protection
• Risk management
• Continual improvement

By adhering to the requirements of ISO 22222, personal financial planners are able to demonstrate commitment and dedication to continual improvement and ensure that client satisfaction is at the core of the business culture.

Launched in March 2006, ISO 22222 is the only international standard for personal financial planners.  Although the UK was instrumental in creating the standard there were in fact 17 other countries that contributed to its design.  The UK committee was represented by some of the leading financial organisations including the Financial Services Authority (FSA), The Chartered Insurance Institute (CII), The Institute of Financial Planning (IFP), The Financial Services Skills Council (FSSC), United Kingdom Social Investment Forum (UKSIF) and The Association of Independence Financial Advisers (AIFA) and the consumer group Which?

Like most ISO standards, its creation was demand led.  Concerns had been raised by consumers that when seeking financial advice they were uncertain over whether they could trust their financial planner and add to this the vast number of differentiating products, providers and financial planners to choose from, they were often confused about where to turn for advice on financial planning for their futures.

The ISO committee was clear from the outset that on the basis that the ISO be appropriately understood, implemented, awarded and monitored their objective of setting an internationally agreed benchmark that reaches over and above the current regulatory requirements would be achieved. 

In order to meet or exceed such a high international benchmark and to achieve the ISO award financial planners must demonstrate through a variety of methods including case studies and on the job observation; experience, knowledge, understanding, application and skill.  But most importantly they must do this whilst demonstrating and applying day to day the 10 key ethical principles, which are:

• Behaving with integrity
• Putting client’s interests first
• Exercising due care and diligence
• Working within regulatory and legislative frameworks
• Carefully managing conflicting interests
• Communicating in a clear and appropriate manner
• Providing suitable and objective recommendations
• Protecting client confidentiality
• Making all material disclosures
• Demonstrating and maintaining appropriate competence

In May 2011 TC68 and The International Standards Organization held a workshop dedicated to quality standards within the financial and banking sectors. Despite being a slow burn ISO 22222 is gaining much momentum and international interest.  There is still much work to do but it is clear that the United Kingdom are  very much leading the way in ISO 22222 certification service and in initiating change within the financial services market place both in the UK and worldwide.

The key benefits of achieving certification are:

• It gives planners an exemption to the Chartered Insurance Institutes (CII) AF5 – Financial Planning Process Module
• Inclusion onto the Which? consumer referral database
• It demonstrates a commitment of adherence to a high level of professionalism
• By displaying the sign of an international standard it communicates credibility and confidence to your prospective and existing clients, suppliers, stakeholders and employees
• It promotes opportunities to become a ‘preferred supplier’, giving you the edge over your competitors, thus improving sales and marketing opportunities
• It improves performance by improving communication and morale company-wide
• It promotes the use of simplified and effective documentation
• It promotes a best practice standard of service
• It promotes awareness of quality and professionalism, internally and externally resulting in better public/professional awareness and image
• It reduces risk, thus providing a potential reduction in insurance costs
• Helps to exceed current regulatory requirements, thus satisfying the governing bodies

In addition to the benefits awarded to the financial planners, the consumer also benefits from dealing with financial planners that have achieved the ISO award; we believe these are as follows:

• A value-added service
• Improved transparency of services provided
• Improved confidence and trust in their financial planners
• Comfort in knowing that due to third-party accreditation by a professional certification body the services provided shall continue to be reviewed, improved and benchmarked
• Easy access to evidence of qualifications, experience, competency and regulatory adherence

There is a view amongst consumers that accredited independent third-party certification provides the most reliable method of conformity assessment and thus protection. Therefore, in preparing BS 9222 (the UK’s supporting guideline to ISO 22222), the members of SVS/6 (the UK committee) have not only took into account the need to promote a uniform approach to the provision of independent third-party certification but have also prepared this British Standard in a manner that it believes will facilitate and support the assessment process, whether first-party, second-party or independent third-party, applied.

Consumers can then have total confidence in seeking the services of personal financial planners who can demonstrate that they work to BS ISO 22222 and particularly where they have undergone conformity assessment by independent third-party certification bodies which have been accredited as complying with the requirements set out in ISO/IEC 17024

Despite accredited 3rd party certification proving to be the most reliable and robust source of certification services, there are only a small handful of certification bodies certifying to this standard.

Standards International is currently the only dedicated certification body worldwide offering services to ISO 22222.  They are both UKAS accredited and pioneering best practice in financial planning in the world.

There are various phases to registration and they differ depending on the certification body so it will be important to select a scheme that is right for you and one that helps you to achieve the full range of benefits. Most schemes will include:

Application - The first step in the certification process is to complete and submit an eligibility application form once received your details shall be reviewed to establish if you meet the schemes eligibility criteria.

Training and Gap Analysis - If you are found to be eligible and successful you shall be invited to attend a Training and Gap Analysis Workshop. The objective for this stage is to help the financial planner fully understand the requirements of the standard as well as identify any weaknesses that may exist within their own practice and working processes. Any gaps identified shall be discussed with the planner in depth and presented to them in a report which will highlight any recommendations to enable them to fully understand what is required.

Implementation - To comply with ISO 22222 prior to the assessment.

The planner may be required to make some changes to their documentation, internal processes and procedures so that they comply with the requirements of ISO 22222. Rest assured this is a worthwhile investment in time as once written, their procedures will provide a blueprint to which they and their teams can follow. If for any reason the planner needs help with the implementation of the new procedures the certification body usually has a panel of Approved Associate Consultants (AAC’s) who will have been trained to certification body standards and will be available to assist you.

Assessment - Assessment to ISO 22222 requires financial planners to demonstrate best practice at each stage of the financial planning process and shall include but is not limited to:

• Client file checks
• Reviews of client testimonials and feedback
• Role plays
• Case Studies
• On the job observation

On satisfactory approval by both the assessor and the certification body validation team the planner shall be awarded the international quality standard for Financial Planners, ISO 22222:2005.

The certification journey is proving invaluable to all those planners that take part in it and it really does give them the opportunity to structure and build a sustainable business for the future.  

Annual Quality Review Audit - Once the financial planner has been successfully certified to the standard they will then be assessed annually to ensure you continue to comply with ISO 22222 and that you are continually improving your processes and service to clients.  The annual quality review audit programme breaks down each core element of the standard allowing the planner and the assessor to pay particular attention to the requirements of each area.

Costs vary depending on your specific set up, available resources; number of gaps identified and of course your chosen method of certification.

The time cost cannot be calculated until the above are known, however, accredited 3rd part certification can cost between £475 and £1,375 plus local taxes per individual with the ongoing cost of certification being between £375 and £675 plus local taxes per individual.

Some certification bodies commit to a client charter which will include additional benefits and discounts on other related services.

Michelle Hoskin
Business Development Director, Standards International

Michelle Hoskin saw that the future road map for financial services would not be an easy one. However, she believed that by changing your mindset, differentiating yourself from your competitors, and striving for continual improvement, the future would be bright. Michelle has worked within the financial services sector for nearly 15 years.  Through her dedication and enthusiasm she has become a recognised specialist in the market of financial services and understands the complexities of running a financial planning business in today’s demanding world.

Michelle has written articles for the financial press, including Real Adviser, Financial Solutions and New Model Adviser.  She has also been a speaker at events such as the PFS conference, Money Marketing Live and Adviser 2008 and has travelled extensively to raise awareness of quality standards and the importance of best practice in financial planning.