The Financial Services Authority (FSA) has this week started to award formal approval to several accredited professional bodies.
This is an important part of the regulatory changes being introduced to the retail financial services sector by the end of next year, as part of the Retail Distribution Review (RDR) initiative.
The professionalism requirements of the RDR will result in all financial advisers having to meet higher minimum standards in terms of professional qualifications and ongoing continuing professional development.
All financial advisers will have to work with an accredited professional body to obtain a Statement of Professional Standing ahead of the 31st December 2012 deadline.
This is an annually renewable certificate, designed to demonstrate to investors that the adviser has met minimum exam standards, maintained their knowledge through continuing professional development and upheld a code of ethics.
Ahead of the deadline at the end of next year, your financial adviser will need to complete three things. He or she will need to 1) pass examinations to obtain a Level 4 qualification, 2) complete ‘gap filling’ activity to update their continuing professional development records, and 3) obtain a statement of professional standing.
We should not underestimate this challenge. For many financial advisers, these new professionalism standards are far in excess of anything previously required. The qualification requirements alone involve moving from a tough GCSE exam to the first year of a University degree course.
Now that professional bodies have started to receive approval from the FSA, all investors should ask their financial adviser for a progress report so they have the confidence that their IFA or tied adviser will be able to continue looking after their interests from the end of next year.
Here at Informed Choice, we have introduced an earlier deadline of June 2012 for all of our Financial Planners to meet the new professionalism standards. We see no sense in waiting until the last minute to put in place new higher standards that will ultimately benefit our clients.
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