The Estonian Banking Association, the Association of Commercial Banks of Latvia and the Association of Lithuanian Banks are establishing a licensing body for individuals involved in providing investment advice and/ or mediating life insurance products with a savings element. The new entity will be called the Baltic Financial Advisors Association (BFAA). Besides setting industry standards for proficiency requirements, BFAA will publish study materials, provide a computerized testing platform, certify individuals in a way that is acceptable to the supervisory authorities across the Baltics and provide periodical knowledge updates in three languages.
The savings and investments balances of Baltic residents have grown significantly over the last years. In the second quarter of the year 2015, compared to the second quarter of the previous year, deposits grew by EUR 1.5 billion or by 16.6 per cent in Lithuania. Household deposits in Estonia and Latvia grew correspondingly by EUR 452 million and 505 million or by 8.3 and 10.1 per cent*. It is therefore important that people continue receiving good financial advice from financial institutions. It is the time to think about a licensing system to set a quality standard that is in line with the best practice in the European Union. There are over 1000 individuals who may need to be licensed.
A member of the Management Board of BFAA Mr Rasmus Pikkani: “The members of the Estonian Banking Association have strongly supported this initiative. We believe the Baltic approach to sharing infrastructure will help to provide a common approach to financial advice to a wider circle of customers. We hope that employees will also be motivated by this opportunity to pass an exam that is created according to international standards. We went through a thorough process to make sure all industry participants can benefit from this infrastructure and we took the best practice from existing organizations in other countries. We are in the process of finalizing our rules and regulations at the moment and we will make them public on the BFAA website shortly.”
BFAA will sign agreements with financial institutions interested in licensing their employees. These institutions will sign up to common standards. BFAA plans to start the examinations during next year.