Financial services education. An Irish perspective
| Published date | 06 May 2014 |
| DOI | https://doi.org/10.1108/JFRC-10-2013-0037 |
| Pages | 78-95 |
| Date | 06 May 2014 |
| Author | Richard Brophy |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation |
Financial services education
An Irish perspective
Richard Brophy
Brophy & Company, Dublin, Ireland
Abstract
Purpose – The purpose of this paper is to chart the development of nancial services education from
its origins in the insurance industry to the current offering for people who wish to work in the life and
non-life insurance industry. Financial services education within Ireland has evolved over time.
Originally perceived to be an outpost of the British Insurance Institute, it is the responsibility of a
variety of institutes that operate in the nancial sectors, covering a range which includes insurance,
banking and credit unions. Where tertiary education was optional, it is now a requirement of the
regulator that people working in this sector have achieved at least this standard. Additionally, specialist
qualications for those working in the industry are being developed with academic involvement, as the
institutes work to provide professional qualications.
Design/methodology/approach – To compare and contrast the Irish regulatory requirements, an
analysis of other European Union (EU) national requirements was conducted, illustrating differences in
education and current certication requirements.
Findings – Educational requirements in Ireland go a long way in terms of ensuring that workers in
nancial services are adequately skilled in terms of academic, professional, ethical and continuous
professional development (CPD). The Irish system covers a lot of aspects of nancial services minimum
competency code that is implemented in other EU jurisdictions, and in some cases, it has a unique
approach in CPD.
Practical implications – Serves as a comparable study of minimum competency requirements of EU
for nancial services employees and highlights differences in requirements across borders.
Originality/value – This is a unique study of minimum competency code that has been implemented
by nancial regulators across EU member states and its impact in the industry in terms of raising the
requirements of people involved in the sector.
Keywords Ethics, Regulation, Europe, Educational development, Academic
Paper type General Review
1. Introduction
Warren (2008) compared electrical products to nancial services in terms of the different
legal statutes used, and asked why consumers feel safe when they buy a tangible item
with cash but feel they are left at the mercy of creditors when they sign up for routine
nancial products in the form of credit cards and mortgages. It was once said that,
“Insurance is sold and not bought”, when insurance agents sold simple products to
people face to face. However, insurance has progressed over time from basic cover to
more sophisticated protection products, and the buyers are now much more active in
deciding what they need (O’Loughlin and O’Brien, 2011). These changes mean that those
who work to introduce clients to insurance products also need to be much better
educated in relation to the products on offer.
On another side of this argument, some insurance products move from complex
contracts to a commodity-based service. In a very short time, direct writing has gained
a considerable market share in the UK, as personal line products are targeted at
The current issue and full text archive of this journal is available at
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JFRC
22,2
78
Journal of Financial Regulation and
Compliance
Vol. 22 No. 2, 2014
pp. 78-95
© Emerald Group Publishing Limited
1358-1988
DOI 10.1108/JFRC-10-2013-0037
price-conscious consumers for whom cost is generally the deciding factor (King et al.,
1997). In the current environment, brokers, as well as insurers in general, need to create
benet and value for their customers to be successful. Insurers’ strategies and market
research have become very sharply focused on the identication, creation and delivery
of value to customers (Maas, 2010).
This complexity creates problems that the consumer may encounter when obtaining
nancial products. Financial regulation has shifted its focus from ensuring the solvency
of nancial institutions to ensuring consumer protection, and this has involved the
imposition of rules and regulations on regulated entities to ensure both nancial
stability and customer satisfaction (Briault, 1999). Llewellyn (1999) summarised the
purposes of nancial services regulation as follows:
• to sustain systemic stability;
• to maintain the safety and soundness of nancial institutions; and
• to protect the consumer.
The Irish nancial services market is unique in having a single nancial regulator for all
nancial services, the Central Bank. There are two bodies that concentrate on consumer
protection providing public information, namely, the Financial Services Ombudsman
and the National Consumer Agency (Brophy, 2012).
As regulation moves from ensuring the solvency of a nancial provider to ensuring
consumer protection, the regulators are also looking at other ways to enhance consumer
protection by examining the transactional processes involved in the purchase of
nancial products. Thus, the Central Bank (Irish Financial Regulator) has also
established a minimum competency code for all people involved in advising consumers
(Financial Regulator, 2006).
The nancial services industry is made up of well-dened sectors such as insurance,
banking, investment and credit union providers, for each of which those involved need
to obtain qualications to work. Beyond these minimum requirements, there are
advanced qualications that can be obtained by industry practitioners. The
strengthening of links between industry, educational institutions and the public sector
needs to be prioritised, both to improve the availability of skills and expertise and to
position Ireland as an international provider of educational services. A centre for
advanced study in nance is a current government priority (Department of the
Taoiseach, 2011).
Besides the prerequisites to work in the nancial services industry in an advisory
capacity, there are also other aspects to the advisor that have been highlighted in the
literature, such as the study of behavioural economics and its effect on the selling of
nancial products. Tapia and Yermo (2007) illustrated that bias in decision-making can
be a result of the fact that many participants are easily swayed by the way in which
saving and investment questions are presented/framed for them. Other aspects of
selling can result in information overload on the part of the consumer.
Now that there is tertiary educational requirement for those working in the nancial
industry, this paper charts the development of insurance and nancial services
education in Ireland against the backdrop of the changing regulatory environment.
Developments in Ireland are compared with the establishment of minimum competency
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