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Aifa doubts effectiveness of professional statements

Aifa has questioned whether the FSA can justify the cost of the proposed statements of professional standing, saying they are unlikely to achieve their objective of restoring consumer confidence.

In June, the FSA published its consultation paper on the RDR and professionalism, which proposed a requirement for advisers to hold an SPS proving that they have met the new professional standards.

The regulator plans to accredit professional bodies to award the statements.

Aifa’s response last week says the statements will be difficult to police, given the number of accredited bodies that are expected to be set up. It says the certificate is estimated to cost firms between £60 and £175 per adviser and they will need to be renewed regularly.

It also argues that consumers will rely more on personal recommendations and less on qualifications to judge an adviser’s skill and competence.

Policy director Andrew Strange says: “Aifa supports the principles behind the proposed SPSs for advisers but we doubt whether they will meet their stated objective to further increase customer confidence in the profession or whether the additional cost to advisers can be justified.”

But Personal Finance Society chief executive Fay Goddard says: “The SPS is clear evidence that somebody is authorised by the FSA and qualified to the minimum QCF level four benchmark. Because the certificates will be issued by accredited bodies it also means advisers have been subject to a level of oversight by an independent third party.”

She adds that consumers can check the FSA register to verify an adviser is authorised but that does not provide any information about adviser competence.
She says: “The SPS is a step in the right direction towards the professional ethos we are trying to get to, which can only restore consumer confidence.”

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