The interim report showed that a remarkable clarity has emerged in FSA thinking although we will have to wait until October to see the final picture. However, there appears to be a desire to clearly delineate advice and sales which will provide a greater clarity of structure for the current intermediary community which is determined to offer real advice for their clients.
As the FSA points out, there are many potential obstacles towards creating a simpler retail distribution regime, not least designating the part of the current sales regime which might legally be construed as advice and they have articulated three basic challenges to the industry in keeping, it says, with its preference for market-led change.
The question now is how to respond to these challenges.
It was good to see that the FSA recognised that professionalism is not just about achieving higher minimum qualifications but aspiring to excellence and their commitment to the proposed benchmark qualification for the advisory level – diploma – at level four which is anchored in the Qualifications and Curriculum Authority qualifications framework.
CII qualifications for professional advisers are already compliant with the QCA framework.
There is now a real challenge in creating a new framework for professionalism that includes addressing issues such as the alphabet soup. That is why the Edinburgh Declaration from four of the main professional bodies is a good example of what the FSA is looking for, namely a market-led solution.
We must not lose sight of the fact that the ultimate objective for the RDR is an outcome that raises levels of consumer trust and confidence in the provision of financial advice.
The interim report is a huge encouragement to continue to work toward creating a better and trusted profession. October will be here before we know it so the heat is on.
Tim Eadon is chief executive of the Personal Finance Society