The Chartered Insurance Institute is demanding a professional body along the lines of the traditional professions to issue practising certificates and help bring about a step-change in industry standards.
It is also calling for a single set of standards, a new complaints system and harsher sanctions to build industry professionalism in its first response to the retail distribution review discussion paper.
Its paper, A Professional Body for Retail Financial Services?, outlines what it believes professionalism should look like in a post-RDR environment.
The CII wants a single framework of ethics and tiered technical or skills-based standards.
It says there should be a single, independent professional standards board for the retail financial services sector with a disciplinary function and substantial public interest representation.
A professional body would support the new framework by applying the standards to its members, overseeing new criteria for entry to the sector and issuing practising certificates.
The CII is also calling for a new complaint system which reports to the professional standards board and the professional body’s governing board, along with the introduction of meaningful sanctions to deal with serious breaches of the ethics code.
CII president Lord Hunt of the Wirral says the best way to restore consumer trust is to build professionalism across the industry so advisers match the attributes, capabilities and behaviours of professionals in other industries.
He says: “Professionalism is not simply about passing exams, important though this is. It is a declaration to the public at large that the advice given by an individual or firm is of the highest quality, based solely on the needs of the customer, provided by someone who is not exceeding his or her level of competence, governed by a code of ethics and subject to consistent monitoring, with effective discipline applied to those who transgress.”
CII chief executive Dr Sandy Scott says: “We will lead the debate and hope to develop a single framework of ethics for the sector. This paper sets out some ideas which we hope will meet the approval of our members and act as a basis for practical reform.”