The development and implementation of The Retail Distribution Review (RDR) by the Financial Services Authority (FSA) is a key part of the Government’s consumer protection strategy. The RDR development programme was launched in June 2006 by the Financial Services Authority (FSA) with the intention of putting in place measures which will enhance consumer confidence in the retail investment market.
When RDR becomes active on 31st December 2012, consumers needing help and advice with their retirement and investment planning, should feel that they can have confidence and trust in the new RDR regulated retail investment market.
One significant area of change for businesses offering help and advice is that their advisers are required to meet new standards of professionalism from the end of 2012.
In the run-up to the implementation of the RDR, the FSA is reporting that firms may have advisers who are not yet adequately qualified for the post RDR era. Some may not yet have even embarked on the learning and training journeys that will ensure that they comply with RDR requirements by gaining the appropriate Statement of Professional Standing (SPS).
Indeed, a recent article in the financial press suggested that less than 40% of advisers had obtained an SPS.
Both advisers within IFS (Professional Connections) have an SPS, and indeed have had them for over 12 months. Moreover, both Paul and Gavin are Chartered Financial Planners
The FSA are now reinforcing the qualification requirement and reminding businesses and advisers about routes to gaining the SPS, including gap-fill, where existing qualifications will not satisfy the new RDR requirements.
The FSA have approved eight nationally accredited bodies who are the experts to be contacted to help identify and verify the gap-fill and qualification requirements, and to issue the SPS – including any deadline for submissions. The FSA provides information on their website about gaining RDR accreditation and continuing professional development, another key feature of adviser professionalism in the post-RDR era.
Advisers who already hold certain qualifications published in the FSA handbook must also carry out qualification gap-fill to meet the appropriate RDR requirements and the new standards, such as in ethics and investment risk. A variety of gap-fill opportunities are available, including e-learning packages, educational conferences, seminars and workshops. The FSA also reminds advisers that it is essential that any gap-fill activity carried out is capable of being independently verified by an accredited body.
As part of your own due diligence, it is prudent to check whether advisers and firms you have relationships with are on target to meet the increased level of qualifications by 31st December 2012:
Do your existing advisers have the appropriate Statement of Professional Standing?
Does the firm you work with and refer clients to have advisers who are not yet SPS ready?
Is it actively enabling them to achieve this status within FSA deadlines?
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