The Edinburgh Declaration sees the CII, the IFP, the Securities & Investment Institute and the Chartered Institute of Bankers in Scotland agree a statement of principles for professionalism ahead of this month’s FSA interim retail distribution review statement.
They have called for a single independent professional standards board to create, oversee and develop high standards, with the power to expel advisers from the industry. The bodies have also pledged to simplify the complexities surrounding the number of adviser qualifications.
But some industry commentators are sceptical about the declaration. Ifs School of Finance chief executive Gavin Shreeve says the FSA should govern a future standards board to maintain independence and credibility and to stop it becoming “an instrument of the industry”.
Shreeve says: “If you are going to have a standards board that has teeth, it has to be through some form of statutory status. The FSA is a statutory body and it could set up the standards board as an arm of regulation within the FSA.”
Sifa managing director Ian Muirhead says there is a need for a code of conduct that goes beyond FSA rules but this declaration will “dilute” the term professional.
Muirhead says: “I am concerned that the organisations behind this are trying to address too broad a church. Applying the word professional in any way to all financial advisers dilutes the impact of the professional proposition.”
Tenet chief executive Simon Hudson says: “I think it is very cosy for four organisations with self-interests to be the ones putting this together.
“There is no inclusion of any consumer body, nothing representing the IFAs, no Aifa and nothing from the regulator. It needs to be a very broad church.”