All investment advisers must complete at least 35 hours of CPD each year, 21 hours of which must be structured. All CPD must be measurable and consider learning outcomes. The FSA has adjusted its proposed requirements so that the same amount of time must be spent by advisers on maintaining their knowledge regardless of whether they work full or part-time.
It has also reduced the minimum length of time for structured CPD activity to 30 minutes from an hour. The FSA confirms that distance and e-learning can include activities such as computer-based training and web-based seminars. Data and supervision. The FSA is proceeding with requirements for firms to supply it with data about individual advisers' professional standards from end and to alert it to issues arising with their advisers from July This will allow the FSA to build a longer-term view of advisers as they move between firms and to identify the highest risk advisers.
Following feedback, the FSA has decided to set out in its Handbook the four circumstances when alerts should be made by firms. A new individual adviser supervisory function, operating closely with firm supervisors, will manage and filter such data, and the FSA intends to alert both firms and accredited bodies to issues it identifies with individual advisers. The FSA's intended consultation on wider RDR data requirements due in the first quarter of is likely to include further data requirements to support its professionalism policy.
At the moment, the cost of advice is often obscured in the price of the product and people are not aware how much their investment advice is really costing them. We have banned commission payments from product providers to advisers. Advisers will have to clearly explain to the customer upfront how much advice will cost and how the customer will pay for it. This will ensure that the advice advisers give will be in the best interests of the customer, not driven by how much commission they could earn.
Advisers will be qualified to a higher professional standard We are making sure that advisers are competent by raising the minimum professional standard and by making sure that advisers undertake regular training to keep their knowledge of the products in the market up to date. Advisers will need to subscribe to a code of ethics, hold an appropriate qualification, carry out at least 35 hours of continuing professional development a year and hold a Statement of Professional Standing SPS from an accredited body.
This means they might only offer products from one company, or just one type of product. Linda Woodall, head of investment intermediaries, FSA said: "The changes will improve customer confidence - we want people to feel that they are getting a service from their financial adviser that is relevant to their circumstances and in their best interests.
Customers will now know how much advice is costing them, the service that they are receiving and be reassured that their adviser is qualified. Here are five questions for consumers to ask their adviser: 1. How much will your advice cost me and how is this calculated? Can you explain the different ways that I can pay for advice? Can you explain what products you can advise me on and any areas you can't help me with?
How often will you review my investments? Can you show me proof that you are qualified to give advice? Back to Index. Free access. It includes details about the definition of a "platform service", adviser charging, independent advice, payments from product providers to platforms, cash rebates and re-registration.
The instrument comes into force on 31 December Defining a platform. The FSA is introducing a definition for a "platform service", but it does not include a description of its primary or core functions. The FSA confirms that the definition does not include product providers such as life companies, the activities of authorised fund managers or self-invested personal pension SIPP operators.
Adviser charging. The FSA is amending the Conduct of Business sourcebook COBS to ensure platforms face the same requirements as product providers if they facilitate payment of adviser charges. The requirement means that the firm facilitating the payment of the adviser charge must be satisfied that the client has agreed to the payment of the adviser charge and how this should be carried out. Independent advice.
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