RDR: FSA undecided on simplified advice qualifications
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The FSA says it remains concerned about allowing lower qualification standards for simplified advice but is working with the industry to explore a streamlined qualification.
In its RDR policy statement, published today, the regulator says the majority of bancassurers and providers are against QCF Level 4 for simplified advice as they believe the training costs would not make the model viable.
However, the majority of IFA respondents and the Financial Services Consumer Panel support the same professional standards for simplified and full advice with IFAs concerned that lower qualifications for simplified advice would give bancassurers a competitive advantage and lead to consumer detriment.
The FSA says there may be an argument for streamlining, rather than lowering, the qualification requirements if advisers are only focused on specific areas. “We remain actively engaged on this issue,” says the regulator.
The FSA says: “We remain concerned that allowing a lower qualification standard for simplified advice would undermine our aim to increase the professionalism of the sector and could be confusing to consumers. We appreciate that there may be an argument in terms of proportionality and the content of the full standards, which may include detailed knowledge that would not be required in a simplified advice process.”
Meanwhile, the FSA has decided to retain basic advice for stakeholder products with commission payments still allowed. Advisers will have to disclose that restricted advice is being given.
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Readers' comments (1)
John Blackmore | 27 Mar 2010 1:15 pm
The FSA still don't get it. Q level 4 is at best a half way stage with Q level 6 being required of IFAs as a miniumum. Looked at less sympathetically Q level 4 is the worst possible solution. Too difficult and unnecessary for those who sell simple products and yet not demanding enough for those who perport to give complex advice.
A lower level Qualification combined with Product Regulation and restrictions on what can and what can not be sold is required and it is required quickly - before 30 to 40% are forced to retire.
Let the high charging complex fee based Advisers go off and get Q level 6. Their market is perhaps 10% pf the the total. Something has to be done to protect the 90% main market from the banks.
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