Melissa Collett explains why Corporate Chartered status is more important than ever in the digital age
In our digital age, consumers are becoming more knowledgeable about the goods and services they buy, and as a result are expecting higher standards from companies across all industries. Consumers look for indicators to help them identify companies who strive for better consumer outcomes. This is why Corporate Chartered status is becoming more important than ever.
Corporate Chartered status demonstrates that a firm has made a commitment to a published code of ethics, to provide knowledgeable advice backed up by qualifications and continuing professional development (CPD), and to seek good customer outcomes. As part of our recent consultation, a number of consultees said how important it was to ensure that Corporate Chartered firms continue to meet these requirements. That is why the Corporate Chartered status is governed by a contract which requires compliance with a set of Corporate Chartered status rules (the ‘rules’). These aim to protect the reputation of the professional body, the Corporate Chartered status mark (which includes the logo containing the title itself), and the profession as a whole.
It is important to understand that the PFS/CII is not a regulator, and as such cannot impose regulatory style sanctions on firms that are in breach of the rules. This means that we cannot impose fines, remove permissions or act on matters that are regulatory in nature, nor is it a substitute for the courts, for example in relation to potential claims of negligence. Any matters that fall within these categories should be pursued with the competent authority, such as the regulator, or where appropriate, the Financial Ombudsman Service or the courts, who have the jurisdiction to consider such matters.
Instead of a regulatory relationship, we have a contractual relationship with Corporate Chartered firms. Firms that currently hold Corporate Chartered status are required to comply with the rules at all times during their annual membership period, and failure to comply with the rules could lead to the withdrawal of Corporate Chartered status. If this happens, it is important that any determination made by the CII is followed within any specified time-frames, to prevent the misuse of the Corporate Chartered status. The above sanction can be considered as a ‘worst case scenario’, for example when a Corporate Chartered firm breaches a fundamental principle of our Code of Ethics or fails to inform us of a regulatory sanction.
However, despite us having the discretion to impose sanctions for breach of the rules, we want to be able to work collaboratively with Corporate Chartered firms to adopt more of a ‘prevention is better than cure’ approach to breaches of the rules, especially if that ‘cure’ results in the removal of a firm’s Corporate Chartered status.
We encourage Corporate Chartered firms to be open and transparent with us if a firm believes they are in breach (or may potentially be in breach) of the rules. By engaging with us at the earliest stage possible, we can work together to provide guidance and support to ensure that a potential breach can be remedied and prevented from re-occurring. This can avoid issues of non-disclosure of a potential breach from arising, which can sometimes make cases more difficult both for the firm and the PFS/CII.
Our motto of ‘Standards, Professionalism, Trust’ remains at the heart of the work we do. If the standards and professionalism of our members and Corporate Chartered firms are clear, then we are collectively one step closer to securing public trust in the profession. However, we cannot maintain these standards without the cooperation of Corporate Chartered firms. The Corporate Chartered mark is a sign of a valuable commitment, and the PFS/CII, with help from Corporate Chartered firms, will always seek to protect the value of the Corporate Chartered brand.
For more information on Corporate Chartered status, including complete editions of the current rules and guidance, please visit www.cii.co.uk/membership/join-us/chartered/corporate-chartered/
Melissa Collett is professional standards director at the CII