The FSA has assembled a small team to process warning ‘alerts' from firms about their individual advisers as it pushes ahead with its data and supervision plans.
From July, firms will be obliged to inform the FSA of any issues arising about their intermediaries as the regulator seeks to "build a picture" of individuals to feed its post-2012 supervisory work.
The FSA has set up what it calls an ‘individual adviser supervisory function', which will work closely with firm supervisors.
It says although many firms currently monitor their advisers, it is concerned they only have access to a "partial picture" of their employees.
FSA head of investment policy Peter Smith told IFAonline the regulator's existing "small" team may have to be revised depending on the number of alerts they receive.
"I can count the number of individuals [in the team] on one hand at the moment, but obviously we don't know quite how many notifications we will get from firms.
"Firms are already required to report problems with their individuals, so this, really, is simply a confirmation of existing requirements.
"But we want to build up a picture over time of individual advisers. For example, if an adviser moves from one firm to another, and both firms flag up issues about that individual, you can see how this would help us."
Meanwhile, Smith said the FSA would not seek to mandate the testing of advisers' knowledge gained through ongoing CPD after 2012.
He said andy CPD undertaken must be outcomes-focused and pointed out a number of providers already test their candidates on what they have learned.
"CPD must be outcomes-focused, but we are not saying all of it has to be tested," he said.
"Some CPD providers do provide some sort of testing, but we are not looking at mandating that."
THE FSA'S FOUR ADVISER 'ALERT' REQUIREMENTS
A firm must notify the FSA as soon as reasonably practicable after it becomes aware, or has information which reasonably suggests, that any of the following events has occurred or may have occurred in relation to any of its retail investment advisers, and the event is significant:
(1) a retail investment adviser, who has been assessed as competent for the purposes of TC 2.1.1R, is no longer considered competent for those purposes;
(2) a retail investment adviser has failed to attain an appropriate qualification within the time limit prescribed by TC 2.2A.1R(1);
(3) a retail investment adviser has failed to comply with a Statement of Principle in carrying out his controlled function;
(4) a retail investment adviser has performed an activity in TC Appendix 1 before having demonstrated the necessary competence for the purposes of TC 2.1.1R and without appropriate supervision.
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