RDR CP: Aifa says charging and training rules should apply to basic advice

Aifa director general Chris Cummings is disappointed the basic adviser category is exempt from QCF level 4 qualifications and is not required to adhere to the FSA’s adviser charging rules.

He told Money Marketing: “If you are sitting in front of a client offering advice it is not for the client to try to second-guess what level of qualification you are, what level of professionalism you have or how you are going to get paid.

“Everything should operate on exactly the same benchmark system no matter what type of adviser you are. QCF level 4 and adviser charging should apply right down to the basic level.”

Cummings adds that more work is needed to ensure basic advice helps the millions of people who are currently under-advised.

He says: “Basic advice works for the people it works for but it is not the great leap forward to serving the majority of the population who are left under-advised at the moment.

“I think we need to do some more work around simplified advice. The FSA should look at similar models in Italy, France and Germany where they have the Mifid regime but seem to cope better with a more simplified sales process.”

Cummings is broadly supportive of most of the RDR’s proposals claiming they show the FSA has listened to the IFA community’s views.

He says the workplace assessments will stave off a mass exodus of advisers from the business.

He says: “If we had not been successful in getting workplace assessment written in I think the fallout could have been considerable.

“The fact that is now written in and that it seems to be a viable alternative, it will actually stem the flow considerably. What we have always wanted to have is many routes through the forest to get firms up to prove they are competent.

“This allows firms to prove they are at that level of competence without the need for individual advisers to sit through an examination.”

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