Adding new labels to IFAs and adviser services in the RDR will only cloud consumer clarity and confidence, the Investment Management Association (IMA) warns.
In a letter addressed to FSA RDR chief Amanda Bowe, the IMA notes reservations about the proposal for ‘primary advice’ and urges the regulator to reconsider the proposal.
The IMA has provided a response to the three main areas of the RDR discussion paper which impact its members.
It welcomes the FSA's desire for high professional standards, but is sceptical about labelling advisers according to the type of advice and service they offer.
“This could actually have an adverse affect and cause confusion in a market where consumers already have a wide range of options available to them,” the IMA says.
“All advisers should be required to gain and maintain high professional standards through appropriate and ongoing qualifications.”
The IMA disapproves of the term ‘general’, saying it is “meaningless and could sound pejorative”.
It has also weighed in to the debate about grandfathering, calling for an appropriate transitional period for experienced advisers to obtain the needed qualifications.
On the question of tied advisers, the IMA believes firms should be allowed to promote their own products.
“There is nothing wrong with ‘assisted purchase’, provided it is clear to consumers what is being offered,” the letter reads.
The association applauded the FSA for reviewing remuneration transparency, but wants distinctions to be made between initial and trail commission.
"It's no secret that commission-driven mis-selling exists in the retail advice market and that professional standards are not consistent,” IMA authorised funds and taxation director Julie Patterson says.
“Simply adding to the complexity of labels will not tackle this.
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