Preamble

This Core Competence Framework for the €uropean Financial Advisor™ provides the specifications for a competent advisor across Europe. This is a standard framework and there will be national variations that take account of differing laws and regulations. The underpinning knowledge requirements detailed in Areas of Competence 1-7 are combined in Area of Competence 8, which tests the advisor’s ability to assess client needs and plan client finances.

The framework ends with summary of performance requirements for financial advisors, detailing the outcomes of effective performance and the behaviours that underpin them.

These overarching requirements are supplemented further by the requirement to adhere to a recognised Code of Conduct or Ethics, such as the €FPA Code of Ethics or an equivalent Code of Ethics. The €FPA Code of Ethics is shown in the Appendix as an example of a suitable, recognised code.

The definition of competence adopted for the purposes of this framework is as follows:

Knowledge + Skills + Attitudes

The qualification requirements are presented in the form of learning outcomes in core areas of competence, whereby learning outcomes integrate knowledge, skills and attitudes; the last being further confirmed by the adoption of Code of Ethics.

Prior to the development of this framework, research was conducted across Europe about what is understood by financial advice, the products and services offered by advisors and the clients they advise. This research is available on the website (www.eu-efa.eu) at www.eu-efa.eu/doc/research.pdf

A more comprehensive description of the knowledge requirements within this framework can be found at ww.eu-efa.eu/?q=competence

The diagnostic tool linked to the framework can be found at www.eu-efa.eu/?q=tool

A glossary is available on the website at www.eu-efa.eu/doc/glossary.pdf . This defines key terms used within the framework and where an idea is described in very broad terms (e.g. real estate investments) the glossary provides suggested content (e.g. unimproved land investments, improved real estate, new and used residential lots, residential property, etc).

The taxonomic designation learning outcomes used in the Core Competence Framework are as follows:

Taxonomic designation: Knowledge and Understanding

Knowledge includes those behaviours and test situations, which emphasise the memory and retention. Remembering includes recognition and recall of ideas, material or phenomena. The objects of knowledge can be various, such as knowledge of terminology, specific facts, conventions, classifications and categories, criteria, methodologies, principles, theories and structures.

Understanding refers to a type of intellectual capacity such that the individual knows what is being communicated. The individual can make use of the material or idea being communicated without necessarily relating it to other material or seeing its fullest implications. Comprehension includes the ability to translate mathematical verbal material into symbolic statements and vice versa (so called translation), the reordering, rearrangement or a theoretical view on (case) material (so called interpretation), and the extensions of tendencies beyond the given data in order to determine implications, consequences or effects (so called extrapolation).

Taxonomic designation: Analysis

Analysis refers to the breakdown of any communication into its constituent element such that the relative hierarchy of ideas is made clear and the relations between the ideas are made explicit. Analysis includes the evaluation of elements, like ability to recognise unstated assumptions, or the ability to distinguish facts from ideas or opinions.

• Synthesis refers to the fusion of elements and parts so as to form a whole. This involves the process of working with pieces, parts, elements, etc. and arranging and combining them in such a manner as to constitute a pattern or structure which was unclear or not explicit before. The objective of synthesis can be the production of a proposed set of operations, a plan, and a set of abstract relations or a unique communication.
• Evaluation refers to the judgements of materials and methods for given purposes. The judgements concern the extent to which materials and methods satisfy both internal criteria, like consistency and logical accuracy, and external criteria, like functionality or honesty. Evaluation includes the use of standards of appraisal.

Taxonomic designation: Application

Application refers to the use of abstractions in particular and concrete situations. The particular and concrete situations could be anything from a case study to a social event. The abstractions may take the form of general ideas, rules of procedures, or generalised methods. The abstractions may also take the form of technical principles, ideas and theories, which must be both remembered and applied.

The intention of the project is to have the competence framework levelled and included within the European Qualifications Framework at qualification Levels 4 and 5.

EQF Level 4:

Knowledge: factual and theoretical knowledge in broad contexts within a field of work or study
Skills: a range of cognitive and practical skills required to generate solutions to specific problems in a field of work or study
Competence: exercise self-management within the guidelines of work or study contexts that are usually predictable, but are subject to change; supervise the routine work of others, taking some responsibility for the evaluation and improvement or study activities.

EQF Level 5:

Knowledge: comprehensive, specialised, factual and theoretical knowledge within a field of work or study and an awareness of the boundaries of that knowledge
Skills: a comprehensive range of cognitive and practical skills required to develop creative solutions to abstract problems
Competence: exercise management and supervision in contexts so work or study activities where there is unpredictable change; review and develop performance of self and others.

This Core Competence Framework represents the European Standard from the €uropean Financial Planning Association –national variances are anticipated and reflected in the overall €uropean Financial Advisor qualification standards applied by the various national €FPA Affiliates.