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FSA must be told if there are concerns over adviser ability

Firms must notify the FSA if they uncover issues with an adviser’s competence, including brea-ches of ethics rules.

Previously, firms were req-uired only to monitor their advisers’ behaviour. But a new rule proposed by the FSA in its quarterly consultation paper will also require firms to inform the regulator where there are issues with competence or ethics.

Firms will have to notify the FSA where an adviser has been assessed as competent but is no longer considered to be and where an adviser has failed to get an appropriate qualification within the time limits set out by the FSA.

Companies will also have to inform the FSA where an adviser has failed to comply with a statement of principle in carrying out his controlled function and where advisers have acted outside their area of competence without supervision. The FSA expects the rules to come into force next January and for it to apply to all firms employing approved persons that fall within the scope of the RDR.

It says: “This proposal has the benefits of emphasising the importance we are placing on competence and ethical behaviour of advisers, informing our supervisory activity and providing us with insights on competence and behaviour.”


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