Firms will be obliged to inform the FSA if any of their advisers fall below its competence or ethical standards from July, as the regulator also confirms all retail investment intermediaries must carry a Statement of Professional Standing (SPS).
The rule was originally due to be introduced this month but the FSA says the weight of responses it received on the issue has prompted its decision to back-date it.
It is part of the FSA's Policy Statement on professionalism, out this morning.
The regulator has also confirmed retail investment advisers will need to hold a Statement of Professional Standing (SPS) if they want to give independent or restricted advice after January 2013.
The statement will provide customers with evidence that the adviser subscribes to a code of ethics, is qualified, and has kept their knowledge up to date.
It will be issued by FSA accredited bodies which satisfy the following criteria:
- they act in the public interest and further the development of the profession;
- they carry out effective verification services;
- they have appropriate systems and controls in place and provide evidence to us of continuing effectiveness; and
- they cooperate with the FSA on an ongoing basis.
Today's policy paper also sets out a requirement for investment advisers to complete at least 35 hours of CPD each year, at least 21 hours of which must be structured.
When the RDR comes into force in January 2013, the FSA will start collecting information about individual advisers, such as the qualifications they hold and which accredited body they use.
However, in preparation for 2013, the first of the professionalism rules will come into force in July 2011, the FSA confirms.
Sheila Nicoll, the FSA's director of conduct policy, says: "Rebuilding trust between customer and adviser is absolutely vital for the future prosperity of the retail investment market.
"In conjunction with the adviser charging rules announced earlier last year, today's policy statement gives advisers the certainty they need to plan ahead for the RDR, whether that involves establishing a new business model based on adviser charging, working towards new qualifications, or filling gaps with CPD. Now is the time to prepare.
"When advisers open for business in January 2013, a Statement of Professional Standing will be a vital indicator for customers that the person they are dealing with is subscribing to a code of ethics, has up-to-date knowledge, and is appropriately qualified."
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