The current strength of the retail investment market can largely be attributed to those firms that operate on an agreed fee basis, the Securities and Investment Institute (SII) argues.
In its response to the FSA’s Retail Distribution Review (RDR), the SII says the industry is witnessing significant growth because of the levels of professionalism in firms, and the fact most do not operate by an “undeclared and opaque commission structure”.
Ruth Martin, managing director of SII, said: “The retail investment management industry - private client stockbrokers, private banks, wealth managers - is seeing significant growth in client numbers and assets under management because firms in this industry seek a long term relationship with their clients and place great emphasis on building and establishing trust.
“Their charging structure is generally on a transparent and agreed fee basis rather than by an undeclared and opaque commission structure.”
The professional body also praised the FSA for its work to improve the industry.
Simon Culhane, SII chief executive, says: "The FSA wants a universal solution across the industry and we support the central aim in ensuring that whether a consumer visits an IFA, a bancassurer or a private client investment manager, the customer has access to a service that is: appropriate to the individual’s needs and delivered efficiently, with transparency of pricing, by a practitioner who adheres to high standards of integrity and ethics.”
In addition, the SII says there should be a new industry qualification standard, which it says should be called the Practising Certificate (PC), to reassure consumers the adviser possesses all the necessary skills.
It says the term ‘Practising Certificate' could become the common badge to identify advisers with a higher level of skill and competence.
However, the SII noted that many firms required their advisory staff to take the senior level SII Diploma or Masters in Wealth Management in addition to an SII benchmark qualification.
Finally, the SII called for increased cooperation between retail professional bodies.
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