Higher professional standards

In developing their proposals for Higher Professional Standards, the FSA have been supported by a Professional Standards committee comprising the major professional bodies (such as the CII and IFP) along with the Financial Services Skills Council (FSSC).

The FSA have reconfirmed the minimum qualification requirement of QCA level 4 for all financial advisers as well as reinforcing the previous commitment that Grandfathering rights would not be allowed.

The FSSC will now be responsible for working with the industry around the current qualification framework and manage the transition from the current industry qualifications.

Encouragingly the FSA have acknowledged that they see this as a starting point and will be looking at how the minimum standard for qualifications can subsequently be moved up to QCA level 6 (Degree equivalent).

Professional Standards Board

The FSA also confirmed that they will be setting up a Professional Standards Board (PSB) independent of the financial services industry, which will initially be responsible for creating a code of conduct for financial advisers and subsequently to work with the FSA to take over elements of the monitoring and supervision of the industry. The general intention is for the PSB to take over responsibility for the professional conduct of individual Financial Advisers which will leave the FSA to focus at the 'firm' level.

Within the proposals it is expected that an annually renewable certificate to practice will become a requirement for all individuals providing advice as is common in many other professions.

In addition it is expected that the PSB will set common standards for professional bodies, such as the CII, and make membership of such bodies compulsory for all Financial Advisers.

Critically in this area, the FSA have confirmed that they see all requirements applying equally to all Financial Advisers, whether operating as an Independent adviser or Sales adviser.

What are the implications for advisors?