Professional bodies accredited by the FSA to check advisers' qualifications and CPD will not have the power to regulate individuals, the watchdog says.
In its latest consultation paper on professionalism CP10/14, the FSA proposes giving trade bodies the authority to monitor advisers' professional standards, and award a Statement of Professional Standing (SPS) to individuals who meet the criteria.
The SPS, which will detail advisers' qualifications, CPD, standards of ethics, and a link to the FSA register for consumers, will be mandatory for advisers to be able to practice.
However, manager of the FSA's professional standards policy team, Katharine Leaman, says the extension of powers awarded to accredited bodies will not include the authority to regulate firms.
"We are not delegating any regulatory responsibility to any body accredited by the FSA. The FSA's job as a regulator carries on.
"The role of professional bodies is added value and to nip issues in the bud. Their role is to highlight issues to the FSA in the case of a potential breach."
She says advisers will be expected to self-certify to their accredited body, which will periodically take samples to check the information is valid and notify advisers of potential breaches in the requirements.
Leaman says: "We don't expect to have advisers sending off loads of documentation".
Under the proposals, membership of a professional body is not compulsory but to get the mandatory SPS advisers will need to join as a member or pay to become a "subscriber" to the body's accreditation services.
"I don't suppose the bodies will do it for free," says Leaman.
"But advisers will get a document, a bit of paper to put on the wall to help consumers understand, to show them the adviser is qualified, up-to-date, and is maintaining a good standard of ethics."
Leaman says accrediting bodies will check adviser attendance at CPD sessions and that they have identified learning needs.
"Usually certificates are given at the end of CPD learning, and advisers will need to present these to an awarding body if they are asked to do so in a sample."
She says the FSA does not want CPD "turning into a paper trail".
Where an accredited body withdraws an individual's SPS, the body should inform the adviser's firm, the FSA states.
It continues: "Firms are required to disclose to the FSA anything relating to the firm of which we would reasonably expect notice. This will include withdrawal of an adviser's SPS."
However, advisers are already voicing concern about the proposals.
Commenting on SPS on IFAonline, Tony Silver says: "We already have alphabet soup the public don't understand and don't care about. Yet more bits of paper filling is exactly that."
Consultation on today's paper will close on 24 September 2010 and the FSA will use responses to finalise its rules, due to be published in a Policy Statement in December 2010.
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