The removal of detailed rules on training and competence could lead to a fall in professional standards and a lowering of the quality of advice, according to the Securities & Investment Institute (SII).
The SII says it is “disappointed” the Financial Services Authority (FSA) has decided to proceed with its proposals to remove the specific training and competence requirements to take an examination for the wholesale market.
It states that prior consultation on the FSA’s proposal demonstrated “widespread industry concern” any change in policy could lead to a fall in professional standards of competence and a lowering of the quality of advice given to consumers, most of who save through wholesale collective investment vehicles.
A typical response to the FSA's consultation paper was: “I find it incredible that with other professions raising their standards, we are sending the completely reverse message.”
The SII shares this concern and, as a result, welcomes:
- The FSA’s statement of support for its expectation “firms and individuals will continue to see an important continuing role for examinations and qualifications”;
- The decision to coordinate the implementation with the introductive of the Markets in Financial Instruments Directive (MiFID) and consequently to delay the original proposal;
- The commitment by the FSA to give “careful thoughts” to creating a “safe harbour” for appropriate examinations; and
- The commitment to undertake a wide training and competence review.
The SII also criticises the FSA for deferring its decision on the approved person’s regime until MiFID is implemented, saying it has “lost the opportunity to endorse a successful structure which is the envy of many of our overseas competitors”.
(To read more about the FSA’s removal of training and competence rules and to find out how retail firms could be affected, see FSA may remove T&C rules for retail firms)
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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