The FSA has rejected Treasury select committee calls for the RDR to be delayed by 12 months but says it will continue to monitor industry progress towards higher qualifications carefully.
In its full response to the report, published today, the FSA says it is sticking to the January 1, 2013 deadline, citing research suggesting 91 per cent of advisers expect to meet the qualification deadline.
The regulator says it intends to publish guidance for possible exemptions for advisers who fail to meet the deadline for reasons such as ill-health. It also points MPs to a work-based assessment it has been consulting on. “We are told this should be particularly helpful to more experienced advisers,” it says.
The response says: “In light of the new research on adviser preparedness, and other mitigating factors, we believe it reasonable to continue with the existing timetable.
“We will, however, continue to review and assess the industry’s progress carefully.”
TSC members attacked the “arrogance” of the FSA when it released an embargoed response alongside the committee’s report rejecting its main findings. Last week, members of the committee hit out at what they called a “hollow” apology from FSA chief executive Hector Sants over the response.
The research suggests 50 per cent of advisers already hold an appropriate qualification while a further 39 per cent have started studying.
An FSA spokeswoman says 1000 advisers took part in the survey between July and August, including tied advisers and IFAs. She adds that participants knew the research was being carried out on behalf of the regulator but that no individual responses would be identifiable. The full survey is expected to be published this month.
Elsewhere in its response, the FSA says it recognises the risk that clients may be discouraged by advisers from moving pre-RDR investments where there is an ongoing income stream. “We will be closely monitoring this as part of our ongoing supervisory work and we will take action where we find evidence of unsuitable advice,” it says.
In response, the TSC says the FSA’s actions illustrate concerns about the accountability of the regulator that it will look to address in its inquiry into the new Financial Conduct Authority.
It says: “In particular we very much regret the FSA has not accepted our recommendations that the implementation of the RDR be delayed by 12 months, or that non-qualified advisers be able to operate with a system of proper supervision beyond the implementation date.
“We repeat our concern that the main purpose of the RDR, namely consumer benefit through better choice and competition, will not be served if its introduction leads to a substantial loss of advisers and firms.”