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Call for RDR qualification clarity on EIS and ETFs

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Threesixty is calling for the FSA to clarify whether specific types of enterprise investment scheme investments and exchange traded funds are retail investment products or securities, so advisers know which QCF level four qualifications they require.

The support services provider says advisers are confused about how to classify some EIS and ETF investments. If a product is classified as a retail investment, advisers at QCF level four can complete the required study through gap-fill but if classed as a security, they would face another QCF level four exam.

Managing director Phil Young (pictured) says it is unclear if recommending an investment directly into a share of an individual EIS, recommending a portfolio service buying and selling EIS or recommending a collection of EIS within a fund wrapper require the securities qualifications.

He says there is also uncertainty over ETFs as baskets of shares tracking indices and markets, ETFs as baskets of derivatives, exchange traded commodities where the underlying asset is a physical commodity and exchange traded notes.

He says: “At this late stage, the only pragmatic resolution is to include these products within the RIP definition where possible. Triggering further examination requirements with an end of 2012 deadline is unfair.”

An FSA spokeswoman says the regulator has no plans to publish further clarification.

She says: “A firm is responsible for determining whether the characteristics of any product they are selling to retail customers meets those set out for retail investment products.”

Bloomsbury Financial Planning partner Jason Butler says: “If IFAs want to call themselves whole of market financial planners, they need to complete all the exams up to QCF level four, including securities.”

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Readers' comments (1)

  • I think we can add Investment Trusts onto that list as well.They are companies whose shares are listed on the exchange, and are daily traded.... so, are they 'securities' or are they investment funds....or both?

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