Instead, Cummings says advisers should be encouraged to reach QCF Level 4 and beyond with regulatory incentives such as lower FSA fees, lower capital adequacy and less intrusive supervision.
Aifa says if the FSA will not back down on mandatory retrospective qualifications it will seek a judicial review of the RDR process. The trade body believes the current proposals could represent a restraint of trade.
Cummings believes that given strong commercial incentives firms will be eager to gain extra qualifications. He warns the current “arbitrary cliff edge” of 2012 could lead to many good firms being forced to leave the industry. His argument is very persuasive.
He says a consensus have developed amongst the vast majority of advisers about the need to increase professionalism, but that the move towards higher standards is being undermined by the FSA’s strict deadlines.
Cummings says the IFA sector has already gone further than other parts of the industry in embracing professionalism- pointing to the 35 per cent of advisers who are already at QCF Level 4 equivalent or higher.
His view on the move towards professionalism seems to be backed up by research from Personal Finance Society’s latest RDR submission which suggests two-thirds of certificate level advisers are already on route to diploma level while 40 per cent of those at diploma level are considering advanced diploma.
This Aifa proposal demands a fair hearing from the FSA. The first question likely to be asked by the regulator is will regulatory incentives really increase levels of professionalism significantly?
So will they? If you are on the road to QCF Level 4 would these proposals keep you on that path?
How significant would these regulatory incentives have to be to encourage advisers to increase their qualifications?
Skandia is the first provider to come out in support of Aifa’s position. Will others follow?
Let me know your thoughts.