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RDR CP: FSA sets out possible code of ethics

The FSA’s RDR consultation paper puts forward a possible draft code of ethics for advisers.

The FSA says the code could form part of the FSA handbook, depending on the outcome of the Professional Standards Board consultation. It is likely to be published for consumers as a statement of standards they can expect from advisers.

The possible draft code published in today’s CP is as follows:

1. To act honestly and fairly at all times when dealing with clients and to act in the best interests of each client.

2. To act with integrity in fulfilling the responsibilities of your appointment and seek to avoid any acts, omissions or business practices which damage the reputation of your organisation and the financial services industry.

3. To observe applicable law, regulations and professional conduct standards when carrying out financial service activities.

4. To observe the standards of market integrity, good practice and conduct required or expected of participants in markets when engaging in any form of market dealings.

5. To be alert to and manage fairly and effectively and to the best of your ability any relevant conflict of interest.

6. To attain and actively manage a level of professional competence appropriate to your responsibilities and commit to continued learning to ensure the currency of your knowledge, skills and expertise.

7. To decline any engagement for which you are not competent unless you have access to such advice and assistance as will enable you to carry out the work competently.

8. To uphold the highest personal and professional standards.


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 25th June 2009 at 5:01 pm

    RDR CP: FSA sets out possible code of ethics
    This list appears to be based on the implicit assumption on the part of the FSA that the vast majority of independent advisers don’t already adhere sincerely to these principles. Where is its evidence to support any need to spell out a list of principles that the vast majority of IFA’s might well claim they already observe and have observed for years? Do we really need telling what we already know about how to run a quality business? Of course we do ~ the FSA always knows best and really we’re all just a bunch of spivs and cowboys.

  2. Not as explicit as I’d like
    Julian, while I hope that you and most are ethical, I’d personally like it to be clarified that acting honestly includes not lying to customers and potential customers. Consider my first experience with an IFA firm:

    1. Contract saying advised service, 0.5% charge.
    2. Illustration produced showed 1% charge (default 1% AMC with 0.5% commission increased to 1.5%).
    3. When I asked for advice and details of the reasons I was told that the service was execution only.
    4. When I asked for the compliance officer to review the handling I received an email from a principal copied to the compliance officer saying not to contact the firm again, while my employer received one saying that I didn’t want to use the pension plan.

    I’ve since had better experiences, so I’m no longer as unimpressed with IFAs as I was after that encounter.

    Those who conduct themselves properly aren’t the problem that the FSA has to address.

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