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Law firm warns of Employment law problems over RDR

Adviser firms risk falling foul of employment law if they are not clear about what will happen to advisers who fail to achieve the new QCF level four qualification, a law firm has warned.

Dundas & Wilson financial services team partner Patrick Brandt says advisers need to have a clear idea of what will happen to them and how their employment terms may change if they do not reach the new retail distribution review minimum qualification.

He says: “Clear expectations will be crucial if employers need to act on the basis of an employee failing to meet the standards expected. A proactive approach in terms of making employees clearly aware in advance of the consequences of failing to pass such exams will obviously put the employer in a good position legally and in terms of employee relations if it needs to ultimately dismiss an employee for failing to meet the requirements.”

Brandt believes employers also need to clearly set out the alternative assessment route as an option for advisers.

He says: “If an employer and employee part ways, that employee could then go to the employment tribunal on the grounds of unfair dismissal.

“It could be argued they would have a case as they were not given the adequate opportunity to pass, including the option of taking the alternative assessment.”


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Ergo, in turn sole traders should have the same rights against the FSA. Oops sorry I forgot they do not have any rights or representation.

  2. Let’s see what happens when the first man, or woman, is put out of work simply because on principle they refuse to accept retrospective regulation that they feel is unfair and unreasonable.

  3. OOPS, I forgot to mention the EU firm which said it is going to be busy opening branches in the UK, most of their advisers can speak a bit of English but will not need any advanced qualifications. And another firm which is opening up in Calais and will send its salespeople in by Eurostar, what a farce!


    EU investment advisers passported into the UK will be able to provide investment advice to UK customers under the more relaxed MiFID regime, and without level 4. But UK advisers without level 4 will be out of a job!

    Whilst we are on the subject then of EU law super-equivalence i.e. the above is not permitted, which is why the FSA are unable to apply their proposed rules to inwardly passporting firms, as this would bring the FSA into direct contravention of Article 31 of the L1 Directive (2004/39/EC). NB: Firms passport into the UK from the EU just as UK firms can passport into EU states via the UK. This two way traffic is the corner stone of EU law and the principle of trading harmony.

    This is why the FSA have confirmed they will not be applying the RDR rules to firm’s exercising Article 31 rights in their draft notification to the EC (ref CP09/18 Ann B pars 26 and 51).

    So there we have it – A right EU/fsa mess up and the FSA may even find RDR is in breach of EU law. I do hope they have done their homework?

  5. What a pitiful and sorrowful state of affairs, I hope that all who promulgate RDR in its current format will eventually have the sycophantic smugness wiped off their faces!

  6. To Simon ~ when did the FSA ever do its homework? If the FSA thinks something’s a good idea, they spend tens of thousands of pounds (of our money) on some outside consultation exercise to get the “evidence” they want to back up what they’ve already decided and from that point on its full steam ahead regardless of what anyone else may think. Should anyone or any body dare to stand in the way…….

    But that may soon be about to change, now that we have Regulatory Legal standing up in court for our interests ~ rather more forcefully than AIFA’s ever done.

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