The retail distribution review is likely to call for a clear graded segmentation of advice from financial planner through to transactional-based advisers and down to a simplified advice service, according to the FSA.
Speaking last week at a conference on the future of UK regulation conference, FSA director of retail policy Dan Waters said the RDR professionalism committee has put forward proposals for the adviser community to offer a wider range of services with advisers clearly defined depending on skills and qualifications.
Waters said there was an emerging consensus that higher standards of behaviour and competence are needed and such a move would improve the professionalism of the sector.
He said this segmentation of advice would then sit above a generic advice service that looks set to be created on the back of the current Thoresen review.
He said under the proposals there would be a role for FSA regulation but the industry is also likely to play a key part by developing and implementing a standards’ framework through its own professional bodies.
He said the segmentation of the advice model implies a higher minimum standard of professionalism, particularly at the more affluent end of the market and more rigorous continuing development for all advisers.
Waters said: “In line with the thinking of other industry groups, this group has suggested that a wider range of services may be more appropriate in today’s world, with advisers differently skilled but suitably qualified according to the services supplied.
“This would start with fully fledged financial planners offering advice typically to the higher end of the market where complex portfolio advice is needed, to advisers operating at a more transactional level for consumers who have more focused and possibly less comprehensive portfolio requirements, through to those advising on simpler products through some kind of simplified advisory process.”