18 July 2011
The Financial Services Consumer Panel has expressed concern over the Treasury Committee's recommendation of a 12 month delay to the Retail Distribution Review (RDR). The Panel believes that consumers deserve higher professional standards from their adviser and may continue to suffer detriment from poorly qualified advisers.
However, the Panel has welcomed the Treasury Committee's endorsement of the objectives of the RDR and its acknowledgement of the importance of a stronger professional ethos amongst financial advisers.
Kay Blair, Vice Chair of the Consumer Panel, commented:
"The Treasury Committee has recognised the vital importance of the RDR to consumers. The provision of unbiased financial advice from properly qualified advisers has been a key aim of the Panel. We were disappointed that the Report calls for the FSA to extend the deadline for adviser qualification as the industry has already had several years' notice of the introduction of the minimum Level 4 qualification.
While we acknowledge the cost in terms of time and fees that some advisers will incur in achieving the minimum qualification level, there can be no justification for the FSA to back away from this important requirement at this late stage. MPs would be rightly outraged if their constituents were treated by doctors with 'A' level qualifications or advised by poorly qualified lawyers. There should not be a double standard when it comes to financial advice.
Four years have already passed since the FSA set out the overall objectives for the RDR. Further delay will only risk harm to consumers as the effects of poor financial advice - and the burden of opaque fees and costs - can last a lifetime.
We know that many in the profession have already welcomed the raising of standards and have reached the appropriate level of qualification well within the original timescales. According to figures from the FSA, referenced by the Treasury Committee, in March 2010, nearly half of all advisers were already appropriately qualified with the majority of the remainder expected to qualify by the 2012 deadline."
Notes to editors
- The Consumer Panel's position on the RDR can be viewed on our website.
- The FSA's views and figures on adviser qualification levels can be viewed on the FSA website.
- The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA Board on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
- The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work is available on our website.
- From the 1st April 2011 there are fifteen members of the Panel as listed below. Panel members are appointed to serve a maximum of two terms of three years. Further information on individual members.