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Following consultation with its members, the CISI has broadly welcomed the FSA’s latest consultation paper (CP 09/31) on the Retail Distribution Review (RDR).
In its response, the CISI said it was “particularly pleased” that the FSA proposes to deliver higher professional standards through ‘recognised’ professional bodies. Membership of a professional body will be considered by the FSA as a ‘safe harbour’ for firms on the technical competence of their advisers.
However, the CISI is concerned about lack of detail in a number of areas, such as the mechanics of the relationship, particularly information sharing, between the FSA and professional bodies.
In this respect, the CISI is disappointed that the FSA has chosen not to develop an independent Professional Standards Board, proposed in an earlier consultation paper, to monitor and enforce industry standards. The FSA intends, instead, to perform the governance function itself.
On qualifications, the Institute believes that a level 4 requirement set for advisers by the FSA should be only a step towards graduate-level qualifications (level 6) for new advisers, as favoured by the sector.
The CISI is running 16 UK roadshows to gauge members’ views on the RDR and help them get to grips with its requirements.
CISI Managing Director Ruth Martin said: “We strongly support the journey towards consistently high professional standards across the retail advice and wealth management sector, a view in line with members attending the CISI roadshows.”
Feedback from the first nine roadshows revealed 87% of attendees believe the RDR will help build and restore trust in the sector.
The CISI has welcomed additional proposals to place practitioners on a level with other professionals, such as a commitment to higher qualifications, CPD and ethics and guidance for identifying ‘top up’ CPD.
