The FSA should set a 2013 deadline for advisers to declare whether they intend to achieve the proposed minimum qualification, or leave the industry.
Adviser network Sesame says the June ‘sunset deadline’ would help remove those advisers “hanging on the coat tails” of others committed to achieving the benchmark, which is expected to be the QCA Level 4 qualification.
Sesame says advisers who do not achieve QCA Level 4 by this time should instead have attained the CII AF5 qualification as a sign of their commitment.
It says this should mean the majority of those leaving the industry in five years will be doing so because they are nearing retirement, therefore avoiding an unexpected exodus of IFAs and leaving a void affecting thousands of clients.
The proposals are set out by Paul Dawson, head of learning at Sesame, in the firm’s latest white paper on the proposals put forward in the Retail Distribution Review (RDR).
“It is vital for the profession as a whole to commit to pursue the appropriate standards at an appropriate pace,” it reads.
“It is not acceptable for advisers, who are not committed to the pursuit of higher standards, to hang on to the coat tails of other advisers who are making that commitment.”
The paper says the issue of professional standards is the one which “probably raises the most questions among the adviser population, because it is the one that is likely to have the greatest personal impact”.
It says the key factor for the FSA to consider is how to prevent an exodus of advisers disenchanted with RDR proposals for a minimum qualification across the board.
Dawson says: “The pursuit of commonly held standards risks an exodus of a considerable proportion of professionals [cutting] off access to financial advice for thousands of UK consumers”.
The paper points out that those advisers approaching retirement in the next decade or so may see “little point” in investing their time to achieve the benchmark.
It agrees with the regulator that it is vital these advisers remain in the industry for the time being and that, if they are not going to commit to the QCA Level 4 exam, they should be assessed in different “rigorous” ways.
It says senior advisers should either have to achieve the AF5 qualification, or convince the FSA that demonstrating TCF is enough to prove their value to consumers.
“While Sesame accepts that the application of TCF does not, in itself, represent the rigorous test of professional standards required, it does, nonetheless, provide regulatory reassurance over the professionalism of an advice business’s approach to managing consumer outcomes,” it reads.
“We do believe that TCF should therefore be taken into account as a method of safeguarding consumers’ interests, and building confidence in the advice profession, during what is likely to be a lengthy transitional period.”
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First mentioned in Cridland Report
Second acquisition of 2019
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