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FSA confirms advisers will need statement of professional standing

The FSA has today confirmed that retail investment advisers will need to hold a statement of professional standing if they want to give independent or restricted advice from January 2013.

In its final rules on professionalism, published today, the FSA says the statement will provide customers with evidence that the adviser subscribes to a code of ethics, is qualified and has kept their knowledge up to date.

The SPS will be issued by FSA accredited bodies which satisfy certain criteria, including that they act in the public interest and further the development of the profession, carry out effective verification services, have appropriate systems and controls in place and provide evidence of continuing effectiveness and cooperate with the FSA on an ongoing basis.

The policy paper also sets out a requirement for investment advisers to complete at least 35 hours of continuing professional development each year, at least 21 hours of which must be structured.

This could involve courses, lectures, seminars or workshops. All CPD has to focus on demonstrable change to improve advisers’ skills and knowledge. FSA research shows that over 70 per cent of advisers are already achieving this amount of CPD.

The FSA says when the RDR comes into force in January 2013, it will start collecting information about individual advisers, such as the qualifications they hold and which accredited body they use. 

FSA director of conduct policy Sheila Nicoll says: “Rebuilding trust between customer and adviser is absolutely vital for the future prosperity of the retail investment market.

“In conjunction with the adviser charging rules announced earlier last year, today’s policy statement gives advisers the certainty they need to plan ahead for the RDR, whether that involves establishing a new business model based on adviser charging, working towards new qualifications, or filling gaps with CPD. Now is the time to prepare. 

“When advisers open for business in January 2013, a statement of professional standing will be a vital indicator for customers that the person they are dealing with is subscribing to a code of ethics, has up-to-date knowledge and is appropriately qualified.”



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There are 33 comments at the moment, we would love to hear your opinion too.

  1. Fine if they removed some cost and work elsewhere, ie introduced the long stop to reduce report length, complexity and cost.

    All they do is add work, therefore adding time and cost.

    How much do they ultimately think the client can afford?

    Great ideas if the client has bottomless pockets.

    Have they heard of the word ‘budget’?

  2. And I wonder how much this will cost us!!!!!!!!!

  3. Will this apply to bank staff and more importantly will the FSA make its saff have a statement of professional standing as they sure dont have now

  4. Richard Blackshaw 20th January 2011 at 10:54 am

    Oh dear……looks like the FSA have run out of things to do!

    Roll on retirement – as I said to my kids who, thankfully are now well paid, happy, hardworking tradesmen – dont even think about coming into the finanacial services industry as you will be constantly hounded by the regulator, will have sleepless nights with worry sometimes, will see your business income dictated to by the regulator and they will also put a strain on your family life and well being…..the only good side is clients as they will either like you or they wont.

    I have a question to ask anyone who is coming into this industry…..why would you even consider it. Drive a train or something else, it pays more and you can leave your worry at work.

  5. The FSA are intent on adding more and more to the existing layers of regulation. This will protect them from any attempt to break up this Quango. It will also help to further justify their role in the city and the ever increasing staff plus saly increases they have managed to put in place over the past eighteen months.

    When we out here have to carry on paying increased costs, dealing with more regulation and trying to be positive about this wonderful industry.

    The FSA have said that thier intention is to bring our industry in line with Accountants and Solicitors. I have friend and clients who are both of the jobs mentioned. Their costs and fess are not as high as the ones we have to cope with. I have mentioned what our regulator is up to more than once and the reaction I get is that if they had to do the same they would pack thier jobs in.

    We are getting to the point where the joke is now becoming a pantomime.

  6. Sheila Nicholl has missed the point. Advisers do not have to ‘rebuild trust’ with ‘customers’ because that is the whole basis that the IFA works on. The loss of ‘trust’ is in the clearly failed regulator whose only real agenda is to take more and more money out of the pocket of consumers through increasing costs of the IFA to provide for the regulators expense accounts and office parties – let’s not forget the company cars!!

  7. Seems like a sensible idea to me.

    I look forward to the day when people stop moaning about RDR and just accept that it is happening!! All this time moaning could be used to get ready for the new post RDR world.

    We want to be recognised as giving a professional service, therefore raising standards can only be a good thing.

    “establishing a new business model based on adviser charging, working towards new qualifications, or filling gaps with CPD” – fairly standard things that we still have almost 2 years to get implemented (plus the amount of time we’ve already known about RDR)

  8. The comment ‘Sheila Nicoll says: “Rebuilding trust between customer and adviser is absolutely vital’

    When did we lose the trust of our customers? I haven’t and I would think that most of the IFA community haven’t.

    My customers have lost trust in Banks, large financial institutions, and their Regulators, so why do they not look to sort out these problems rather than pretending to ‘fix a problem’ with the IFA community.

    These comments that are used to justify their actions are unhelpful, antagonistic, and just plain wrong.

    They just don’t get it!

  9. How much to be a member of a “professional Standing” body and what will be the fees each year.
    Will the additional FSA costs to collate all this info and who will be paid to audit it all.
    To set up a new organisation to keep copies of our Certificates and CPD for approx £200pa is an additional expens the CONSUMER should not have to expect their fees to be contributing to in addition to everything else!

  10. The FSA seem to be making up for their past misgivings and are trying to justify their own existance.

    “Rebuilding trust between customer and adviser”? – Well I already have great trust with my clients and so have the majority of IFA’s. Perhaps the FSA should have kept a closer eye on the advice given by our Banks where the ethos is all about sales rather than advice? But it is me who once again will be hit in the pocket as 21 years experience seems to count for very little these days!

  11. Andrew, stop moaning about us moaning.

    We moan for good reasons, because the FSA has lost its reason.

    Those of us that have little respect for the majority of the ‘professional bodies’, because they clamour for our hard-earned coin and rejoice in their ascent up the ladder, do not wish to be associated with them or have them sit in judegement when, like the majority of the FSA/FOS employees, have never advised a client in their lives.

    I note that the FSA is going large on gap-filling. Proof, if needed, that ongoing CPD represents the way forward. Not kow-towing to jumped up bodies and buying acceditation.

  12. In the same week that the sham that Barclays calls advice is plastered across the press bringing shame to our profession…

    A Bank acts like this 12,000 clients, a bad apple IFA in the same week, 12 clients, where should the focus be?


    What a sick joke!

  13. Alan,

    I moan at your moaning for your own sake – RDR is happening and your moans will go unheard. I am simply saving you the time you could be putting to good use.

    CPD as sufficient gap-filling?! Give me a break. For example, how many of us only go to a breakfast seminar if we know the breakfast will be good? If we are brutally honest, there’s not a great deal to be had at these events.

    Pay £600 and sit the IFS Diploma. It’s Level 4 acredited and can be done within 9 months and requires a few hours a week study.

    The FSA may have lost its reason, but they haven’t lost the power to implement the RDR whether you like it or not.

  14. It is the FSA thats broken and needs re-building not consumer trust in the IFA. Come on lets have the proof where is the evidence for your assertions ??

    This is another example of how easy it is to spend other people’s money on yet more that does not need fixing.

    Ongoing CPD – Surely at last they have not worked out the value of CPD (like every other trade and profession did years ago when raising admisson standards) ??? Apply that to RDR existing adviser qualification requirements and ‘hey presto’ we’re starting to get somewhere. NOW for sensible commission proposals ???

  15. Steven Farrall (Adviser Alliance) 20th January 2011 at 12:13 pm

    Ah, the well know Great Loyalty Oath Crusade again. See Catch22 for explanation and risible result.


  16. Steven Farrall (Adviser Alliance) 20th January 2011 at 12:21 pm

    ““When advisers open for business in January 2013, a statement of professional standing will be a vital indicator for customers that the person they are dealing with is subscribing to a code of ethics, has up-to-date knowledge and is appropriately qualified.””

    No it won’t. All it will demonstrate that the adviser has ticked another FSA box.

    Talk about stupidity.

    How about a simple “my yes is my yes and my know is my no” That pretty well covers all situations.

    Are you qualified? Yes.
    Ah, that’s all very well, but do you actually know what you are doing? Yes.
    Will you stitch me up? No.
    The FSA? Are they completely bonkers? yes.
    Aren’t they the outfit whose arcane rules precipitated major banking failures? Yes.
    Have you lost your clients any money – other than from normal market fluctuations? No.
    And the FSA still thinks that they are able and have the credibility to judge you? Yes.
    So they are completely bonkers then? Yes.

  17. The basis of my business is Trust and understanding with my clients. I do not need to rebuild something that is already in place, this is why my clients come back to me year after year and trust is evident by the nuber of referrals our firm get from existing clients.
    Why don’t the FSA concentrate on the Barclays Bank and similar institutions who obviously are sticking 2 fingers up at the regulators.

  18. Consumer trust needs re-building does it ???

    2010 FSA Annual Consumer Confidence Survey

    98% (yes you heard right – 98%) of IFA clients were confident the advice received was appropriate-confidence had risen by 17% over the year.

    BUT since when did evidence ever matter to FSA (even if it was commissioned by them)

  19. Cost IFAs? Correction – it will cost consumers. Let’s cut out the euphamisms.

  20. If anyone needs to rebuild trust it is the greedy self serving failure of a regulator that sits in Canary towers scoffing £680,000 pounds worth of biscuits while the financial system collapses round about them.
    So stop spewing crap Ms Nicoll and start by putting your own house in order.

  21. “Sheila Nicoll says: “Rebuilding trust between customer and adviser is absolutely vital for the future prosperity of the retail investment market.”

    I wasn’t aware that I had lost the trust of my clients. However, my clients will soon lose their adviser.


    If you don’t like it leave the industry, I’ve been in the industry for 20 years and will be here in another 20 years, I have the Diploma already and just need one more paper to be Chartered.

    Many IFAs are under-qualified, under-skilled and inadequately supervised, which has led to massive customer detriment because the FSA hasn’t reviewed them. If the RDR gets rid of these IFAs, the whole industry benefits and there’s more customers for the rest of us.

    If you can’t stand the heat, get out of the kitchen now rather than wait until 2013

  23. Anonymous@1.54
    No YOU will NOT be here in another 20 years.
    If you need to wait until the RDR gets rid of advisers before there will be more clients for you to choose from, then you are not as good as you think you are or clients would be beating a path to your door now.

  24. It seems as though the FSA are giving one last sweetener to all of those “professional bodies” that supported this latest ridiculous escapade by the FSA; I was going to cancel my subscription in protest after getting past the required qualifications, but now it seems as though they are forcing us to maintain our membership.

  25. Anonymous | 20 Jan 2011 1:54 pm


    Not one for usually posting messages on these sites as I feel it pointless. Having said that I was absolutely f*&%*%^ pissed at the remark that you posted. Oh how I would hate for someone with your attitude to get into a position of decision making any time soon! You have, in 9 lines, showed more disrespect to your profession and peers than the FSA have in all that the RDR represents.
    Just for the record chummy, I have level 4 and have done so for some time. Was I underskilled or inadequate before I had it? No! Nothing has changed in the way I conduct my business and upskill my knowledge. Just because IFA’s who have years of experience and vaults of knowledge don’t have a pass in various examination means that they are not ‘qualified’ to do a 1st class job, and most definately a better one than you!
    If I may give you some steerage for the future …. be very careful of want you say and wish for as it just may happen one day and take a very large lump out of your arse!

  26. Sheila Nicoll says: “Rebuilding trust between customer and adviser is absolutely vital” – utter bo….ks!

    Ms Nicoll, actually READ the stats: IFAs have easily the lion’s share of the pensions market, very few complaints comparatively AND a lower uphold rate on complaints. That doesn’t sound like we need to re-build trust.

    On the other hand, your employer’s poor performance has cost the industry millions, allowed miss-selling on a huge scale by banks (for which you thought a light regulation touch was appropriate) and direct insurers.

    You didn’t see coming some of the accident waiting to happen scandals which you could only regulate retrospectively with flawed models.

    It’s YOUR employer, along with the banks and direct insurers, which caused the loss in public confidence, so get the beam out of your eye before you concentrate on the mote in our eyes.

    Having said that, I agree with structured CPD (have done it for more than 30 years), provided it’s not simply the back-slapping “good chaps” drinking G&T and eating breakfasts which many product providers wrongly call CPD.

  27. The FSA’s requirements, like a cancer grow inexorably until the terminal decline of its victim. Like a bully the more you capitulate (AIFA take note) the more the bully wants and takes.

    You might well ask are they not happy with 500 hours of level 4, CPD, electronic returns every six months, file checks, unlimited liability, no stautue of limitations, £20K capital, TSC, PI and a myriad of other requirements and god knows what else.

  28. The vast majority of IFA’s are joke complete dinosaurs terrified of change, mostly stuffy old men who know little or nothing about the industry, regulation or products other than the 2 or 3 they recommend. The bottom line is most IFA’s advise for commission not the customer and don’t even try to say its different. Not clever enough to pass an exam on your own profession – PATHETIC!

  29. I agree with the STOP MOANING comment and T&C Man

    The exams are easy for the advisers who know their chosen areas of expertise – giving first class advice.

    JB’s comments and threat of violence says a lot about him – lets’ face it, we’ve all seen customers who’ve had unsuitable advice from other IFAs, any IFA who hasn’t seen it doesn’t know the difference between good and bad advice or hasn’t seen enough customers….

  30. JB – I do have a “position of decision making” and have had for most of the 20 years I’ve been in the Industry.
    I earn a very good living, something that I will continue to do as I have dealt with many changes and will continue to do so.
    Alternatively, I could just live off my investments (as could most of us who’ve done well over the last 20 years) but I prefer to ensure that lots of people receive first class quality advice from someone who knows what they’re doing – I hope you join us in 2013 and that the FSA doesn’t make your business model unsustainable.

  31. Total tosh ! As several people here have already stated, IFAs haven’t lost the trust of their customers. Customers don’t deal with people they don’t trust. We are the one group that customers DO trust. They don’t trust the banks, they don’t trust politicians and they don’t trust the FSA to protect them.

    I would like the FSA to provide one shred of evidence to show that people who use IFAs don’t actually trust them !

  32. Bill,

    Trust is such an over used word.

    Are you saying that all of those who have been missold over the years endownments, pensions, keydata products, rubbish bank rubbish etc did not trust their “adviser” before transacting?

    They made the classic mistake of trusting that “ever such a nice man in a suit” and actually believing what they were told. It is the sad fact of life and if by forcing our profession to become better qualified it stops 1, 10, 100, or even 1000 rubbish advisers from deciding to go off somewhere else to ply their trade then good riddance to them. I know that some rubbish will still slip under the bar but that happens in the accountancy/ lawyer world too but at a much lower level.

  33. Well done FSA (rare statement)!

    These measures will mean that very soon, the UK Financial Planning profession will be one that is looked up to, respected and envied around the globe.

    Clearly these measures are way over due and will immediately elevate us higher than some other professions.

    Those who think this is extra work and that consumers will pay: yes it is, and yes they will. So what? Get on with it or just get lost.

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