Sesame has slammed the FSA’s cost-benefit analysis of the RDR, insisting the regulator has “seriously underestimated” the cost per adviser of obtaining a QCF level four qualification.
The FSA’s cost-benefit analysis puts the cost of higher qualifications at £2,500 per adviser.
In its response to the latest RDR consultation paper, Sesame says the figure might cover exam fees and study material but fails to reflect the time-cost of studying.
It says: “Most firms will need to put in 300 to 400 hours studying to pass these exams. It is very difficult for an adviser running, or working in, a small business to take time away from servicing clients in order to study for exams, not least when the trading climate is difficult.”
Sesame says only a work-based assessment scheme will provide an adequate alternative to exams rather than an oral equivalent of the written exams.
The network believes the FSA’s estimate that 20 per cent of advisers will leave the investment sector is too optimistic and that the CBA does not address the issue of orphaned clients after 2012.
An FSA spokesman says: “Adviser study hours are a consideration as part of our cost-benefit analysis but there are too many variables to put an exact figure on the time that each adviser will have to spend studying.
“The estimate of £2,500 was provided by Deloitte, which we commissioned to conduct independent research into the cost of the proposals. We have no reason to doubt that figure.”