VALUATION COUNCIL SHAKES UP VALUER QUALIFICATION AND REGULATION PARADIGM

04/21/2011 13:10

As the new chair of the Valuation Council, I am grateful for the opportunity to represent the interests of multidisciplinary valuers around the region. I look forward to working with RICS to address some of our industry’s most pressing issues, including accountability for appraisal work performed and harmonizing the diverse interests in valuation. In addition, I am eager to help move our profession forward with the important work of the Council that involves debating and advising on valuation standards, education and best technical practices. This work not only impacts valuers in our region, but also valuers around the world. We are all curious about what the global valuation profession will look like in the not so distant future, so let me try to share with you some predictions. Together RICS and its Americas’ Valuation Council are working on some breakthrough programs that could very well shape the future of our profession. For the First Time, Valuers will be Held Accountable for their Work. You may have heard about a new RICS program, now in effect in the UK, to ensure that our valuation members are in compliance with, and adhering to valuation standards in the course of our work. The RICS’ Valuer Registration Program will be up and running in Europe and Asia by year-end and should be phased in to other parts of the world next year. In the aftermath of the financial crisis in the U.S., we need a program that raises regulators’ and consumers’ confidence in the valuation services that we are providing. Since real property valuers are licensed by the states, the issue of greater governmental regulation of valuers would impact primarily the business valuation, machinery and technical specialties, and personal property disciplines. In response to increased scrutiny and regulators’ skepticism about self-governance of professional societies, the proposed RICS Valuer Registration Program will involve a dedicated staff of professionals who will annually monitor the type and quality of members’ work and their compliance with RICS standards. For those found to be lacking in compliance, we would work with them to help bring them back into compliance. This program will raise the credibility of valuers and assure both regulators and clients that RICS registered valuers represent the best qualified and standards-compliant professionals in the field. Details of the RICS Valuer Registration Program for the Americas region are still being developed. We expect to present a draft version of the program to regulators, such as the Office of the Chief Accountant of the SEC, the IRS, the FASB, bank regulators and the PCAOB. Following that, there will be a revised version responsive to the comments from the regulators that will be presented to employers and individual valuers for comment. Questions that we need these groups and members of our industry to answer include: • Can we get national regulators to promote, or at least recognize, the program? • How will employers, banks, professional bodies and other stakeholders back a program like this? • Can we get the majority of valuation firms and individual valuers to support the program? As we move the Valuer Registration Program forward, we appreciate receiving feedback from you about this program. We’re Building a Solid Framework Today for a Better Profession Tomorrow. In addition to exploring a regulation program, the Valuation Council is progressing with other important initiatives. The Council’s Standards Board, led by David Snook FRICS FASA has been diligently replying to Requests for Comments on draft standards from the International Valuation Standards Council, the Appraisal Foundation and others. Brian Glanville FRICS CRE MAI and Vice Chair of the Council is coordinating several projects with the Council’s Board members, including vetting valuer education and growing RICS membership. There is particular focus on creating a new pathway to RICS accreditation for entry-level valuers to follow. RICS is currently testing a new route to membership for less-experienced professionals. Having this pathway would enhance “brand loyalty” to RICS and provide benefits to our future generation of valuers. Ultimately, we want a clearly defined pathway for students and valuers-in-training to become qualified. The Council’s Education Committee is examining multi-disciplined valuation curriculums that may be used by universities and other training programs. From the time valuers reach the end of the pathway—reaching competency and ethical practice—we want them to gain the MRICS qualification to demonstrate their professional achievement. An RICS qualification is the only designation that is recognized in every part of the world; committed to following and enforcing the highest standards of practice. We Need Your Ideas and Support. While we can’t foresee specific economic and market-driven circumstances that will impact the valuation profession, we can take steps to secure the skills and knowledge that are required for providing the best possible service. In the next few years that I am Chair of the Valuation Council, I want to raise the bar for success in the valuation profession, move towards a unification of standards setters and recognize the global nature of our profession. With factors for success including a legitimate self-governance system, comprehensive standards, a larger and more broadly based membership and top-notch education, we will be growing the integrity of our profession and will be recognized for our professionalism. RICS is taking the lead on these important activities and is looking for feedback on how to carry them out. We encourage you to communicate your ideas by emailing them to ricsamericas@rics.org where they can be considered and made part of our growth. Please get involved and help to bring these new initiatives to fruition. --Bruce B. Bingham FRICS FASA Bruce B. Bingham FRICS FASA Executive Director - Valuation, Capstone Advisory Group, LLC - Mr. Bingham has over twenty years of experience in the areas of business valuation and financial feasibility, as well as business planning, investigative due-diligence, and litigation consulting. He has served as an expert witness in numerous Federal and state civil and bankruptcy trials and in arbitrations. Mr. Bingham has extensive experience valuing and representing companies in strategic planning, solvency matters, transactions, accounting-related matters, fraud and disaster-based damages and diminution in value, divorce and tax matters. Prior to joining Capstone, Mr. Bingham was Senior Managing Director of Trenwith Valuation LLC, and until June, 2004 was the National Practice Director of Valuation Services for BDO Seidman, LLP. Before BDO, Mr. Bingham was the Principal in Charge of KPMG Peat Marwick LLP’s New York Appraisal/Valuation practice. He has directed over one thousand engagements involving private equity, intangible assets and intellectual property, divisions of public entities, companies entering or emerging from bankruptcy, allocating acquired assets and providing advice to boards of directors. Mr. Bingham is an elected Fellow of the College of Fellows of the American Society of Appraisers (FASA), specializing in business valuation, and a Fellow (FRICS) with the Royal Institution of Chartered Surveyors, of which he is the current chair of the RICS – American Valuation Council. Mr. Bingham is a former board member of ASA, past Chairman of the ASA Business Valuation Committee and a founding member of the AICPA Business Valuation and Appraisal Sub-committee. He is also a retired brigadier general, U.S. Army.