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IoM regulator decides against grandfathering

The Isle of Man’s regulator has announced it does not intend to allow grandfathering as part of its own RDR implementation.

The Financial Services Commission has written to practitioners on the Island confirming it expects advisers to hold QCF level four qualifications from January 1 2014, and does not intend to allow grandfathering.

The letter says: “At this stage, the FSC does not consider ‘grandfathering’ of individuals who do not obtain the level four qualification to be appropriate.”

FSC deputy director of funds and investment services Sean Flanagan says: “Consumer protection is important and financial products have become much more complex. It is not good enough to say qualifications are unnecessary. The bar has not been set very high through RDR and just as one expects other industries to achieve a minimum level of technical competency, it is our view this should apply to financial advisers.”

While consultation on the reforms continues, trade bodies and professional bodies have agreed the text of the letter and so this is likely to be the regulator’s final position.

The Isle of Man has always intended to implement its own RDR a year after the UK and the 2014 deadline was not arrived at as a result of the Treasury select committee’s RDR report which called for the implementation in the UK be delayed a year beyond the current deadline of January 1 2013.

The letter says the Commission does not intend to ban commission payments. From January 1, 2012, advisers on the Island will be required to fully disclose charges, costs, marketing allowances, also known as soft commission, and commission to clients.

The letter was sent to IFAs, stockbrokers, banks undertaking investment business and investment and wealth managers on Friday.

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. 1,000 year of democracy and all they can do is ape an unelected, unaccountable UK regulator! This is a shameful day for the IOM.

  2. Absolutely right – a little more time than here in the UK to get up to a basic level of proven knowledge, whilst leaving advisers and clients a choice as to the method of paying for advice.

  3. “…Consumer protection is important and financial products have become much more complex…”.

    Erm, not they have not. Standard Big Lie technique. ‘Products’ are still essentially very simple. What’s got more complex is all the pointless regulatory bureaucratic rules.

  4. Exams to achieve “proven knowledge” inlcude qustions where a multimillionaire has come to you the adviser with questions about her investments and pensions, and in 20-30 minutes flat you prepare the advice. This illustrates that advice can be given quickly and cheaply.

  5. Seems like an enlightened and intelligent way of doing things. Perhaps I should transfer our investment business to IOM authorisation and passport back in. Hell, Port Erin is nearer than London.

  6. Top bod at FSA picks up the telephone and calls his former colleague at FSC and says:

    “Help us out my mate, we can’t have our trousers falling round our ankles in Canary Wharf, make an annoucement that you won’t allow grandfathering”

    “Will do Hector”.

  7. At least they haven’t banned commission. Clients should have the choice. Who is HS to say a client can’t choose how his avdiver is remunerated?

  8. Have to say this appears to be a cogent and well thought out strategy.

    IFA’s have long been a quasi unregulated problem child driven by commission selling, it strikes me that anyone violently opposing what has been suggested does not want to progress as a profession or develop themselves in a professional manner.

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