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.