Andrew Strange: AIFA.

At the same time, advisers trade body AIFA has greeted the publication of Delivering the RDR: professionalism, including its applicability to pure protection as largely positive for its members.

The FSA says the list of qualifications provides the certainty advisers need to prepare for the implementation of Retail Distribution Review (RDR) requirements. The FSA emphasises that qualifications and ongoing study form part of the FSA’s plan to enhance the reputation of the retail investment market by instilling greater professionalism and ethics. Increasing customers’ trust and confidence in the sector is vital for its future, it stresses..

The regulator is consulting on whether advisers will also be required to hold a so-called Statement of Professional Standing confirming that they:

• are qualified to give advice;
• have kept their knowledge up-to-date; and
• subscribe to a code of ethics.

Accreditation

The statements will be issued by FSA-accredited professional bodies. To be accredited, the bodies will have to promote professional excellence, and prove their ability to apply a consistently high standard of checks on advisers. Setting the same requirements for all bodies will help deliver a uniformity of standards across the industry.

Sheila Nicoll: trust.

Professionalism

FSA director of conduct policy Sheila Nicoll told ModernSelling.com: ‘Enhancing trust between customer and adviser is absolutely vital for the future prosperity of the retail investment market. The professionalism element of the Retail Distribution Review, in conjunction with adviser charging rules, will help this process.’

She added: ‘From January 2013, customers will be in a position to know that anyone registered with the FSA to give retail investment advice is fully qualified to do so, and any recommendations will be made solely in the interests of the customer.

‘Professional bodies will offer support to members and encourage them to strive for professional excellence. This will drive up standards across the market, making it an attractive career proposition for a new generation of advisers.’

Click to view the Professionalism Consultation paper on the FSA website.

AIFA response

Commenting on the FSA’s publication today of Delivering the RDR: professionalism, including its applicability to pure protection director of policy advice at AIFA (Association of Independent Financial Advisres) Andrew Strange said: ‘FSA’s move away from a Professional Standards Board is a positive move for the IFA profession..’
He added: ‘Advisers were rightly concerned by the possibility of double jeopardy with the creation of a new regulator. Professionalism is vitally important, but a PSB, independent or otherwise, was not the solution.

‘AIFA has been an advocate of practicing certificates for advisers. The proposed Statements of Professional Standing are a version of these. However, it remains to be seen who could act in the role of accrediting body – FSA states that FSA-authorised firms are unlikely to be acceptable, but it is less clear where this leaves unauthorised service providers for instance.

He continued: ‘The reduction in number from the original 85,000 advisers to just 48,000 advisers is cause for concern and deserves immediate clarification by FSA. AIFA continues to analyse the data, but a level playing field for all those offering investment advice is crucial to the success of the RDR. It also could call into question aspects of previous CBAs.’

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