CII responds to the Financial Services Authority's proposals for enhancing the professionalism under the Retail Distribution Review

17 December 2009

The Financial Services Authority (FSA) today published proposal for enhancing professionalism of investment advisers under the Retail Distribution Review (RDR).

The Chartered Insurance Institute (CII) has responded to the FSA's consultation paper and while it is disappointed not to see plans for an independent professional standards body, it welcomes the additional clarity on other issues such as work based qualifications and the legacy qualifications list.

Commenting on the proposals Dr Scott, chief executive of the CII said:

"In its own words the RDR is seeking to rebuilt people's trust and confidence in the retail investment market by raising standards of professionalism. We've seen that there's a clear appetite amongst consumers for robust and independently verified professional standards in the financial services industry.

"Today's announcement by the FSA is not surprising but we do feel it misses an opportunity to help restore the public's trust and confidence. In our view, an independent body, separate from both the industry and the regulator would be better placed to help rebuild public faith in the financial services industry.

"We'll look closely at the issue for standards required for professional bodies themselves. We feel it is vital that these are robust and sufficient to withstand commercial pressures, anything less than this could reduce public confidence in the professional framework.

"The tightening of what constitutes the benchmark qualification to QCF Level 4 diploma is welcome and helpful. However, some questions still remain to ensure that the market has clarity and certainty of what is expected.

"The proposals provide useful guidance about the legacy qualifications list, providing advisers with some clarity about what action needs to be taken. We are pleased that the work we have done to ensure relevant existing and past qualifications has been recognised.

"We have submitted our proposals to the FSA about work based assessments and we will take a close look at what the FSA has set out. We are seeing a huge uplift in numbers of advisers who are already well on the way to the new benchmark qualification consistent with the FSA's ‘no regrets' policy. Ultimately the public will be the judge of whether these proposals will help rebuild trust and confidence in the market."

The CII will review the published proposals in greater depth and respond in more detail in the New Year.

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