A single professional standards board with 'substantial powers' to punish malpractice should be introduced in the RDR, the CII Group urges.
The board would act as the arbiter of ethical standards for practitioners, promote continuing professional development as well as punishing offenders.
In its fifth and final position paper in response to the FSA Retail Distribution Review (RDR) discussion paper, the CII outlines how the board would operate in conjunction with strengthened professional bodies as custodians of standards, similar to other professional sectors.
The new framework would include:
- A single structure of professional standards for all retail financial services market customer-facing staff, comprising a mix of educational and technical standards related to defined sector job functions;
- A single, independent professional standards board to create, oversee and develop these standards including an independent disciplinary function.
- New complaints handling functions to deal with professional malpractice issues, reporting to the professional standards board;
- Powers of the professional standards board to impose meaningful sanctions to deal with serious breaches of professional standards arising from either complaints or disciplinary processes.
CII Group chief executive Sandy Scott said: "The public must benefit from the RDR or there is little point to it. Similarly, our ideas for a new professional framework will be of little value unless the public believe that the professional standards board and the professional bodies we are proposing will act in the public interest to prevent – and if necessary to punish – professional malpractice.
"There will be a cost to establishing a professional framework of the kind we are advocating. But I firmly believe that this will be insignificant compared with the far greater industry and public cost of mis-selling or other public failings which have tarnished the reputation of retail financial services in recent years.
"The prize is a more confident and trusted industry as viewed by the profession and customers, and ultimately an expanding market and increasing numbers of consumers with access to quality advice."
This is the final position paper the CII Group will produce before publishing its submission paper to the FSA on 10 December 2007.
The new CII Position Paper 'Building trust and confidence in retail financial services: a new professional framework' is available to download at www.thepfs.org/positionpaper as well as previous papers on 'A professional body for financial services ?', 'Alphabet soup – simplifying qualifications', 'Managing the transition', and 'Managing conflicts of interest'.
The CII is a professional organisation for insurance and financial services maintaining the professional, ethical and technical standards of the industry.
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