The role of accredited bodies
The FSA/FCA have confirmed that accredited bodies must check that 100% of advisers who use their services hold appropriate qualifications, including any qualification gap-fill, where required. The accredited body will be able to rely on a previous confirmation from another accredited body that an appropriate qualification is held (this includes qualification gap-fill). The FSA/FCA have decided against raising the 10% CPD sample check requirement at this early stage, primarily because they recognise this is a new regime and needs time to evolve. However, they recognise that accredited bodies are free to exceed the FSA/FCA requirements if they so choose.
The FSA/FCA also encourages accredited bodies to recognise CPD activity from a range of providers, including Firms’ own in-house schemes. Competition would not be encouraged if accredited bodies only regarded their own CPD activity as suitable for meeting requirements. This is an example of the type of possible issue the FSA/FCE will seek to monitor as part of their ongoing oversight of the accredited bodies. This cannot be an issue with the IFS School of Finance as they do not offer any formal training. Therefore there is no conflict of interest.
The FSA/FCA encourage firms to facilitate the accredited bodies’ role in recording returns from advisers and in assessing CPD, such as through confirming the relevance of particular CPD activity for the adviser’s specific role. This will include a Firm’s ability to propose a ‘default’ accredited body for their advisers to facilitate easier reporting. But the FSA/FCA is reluctant to allow Firms to mandate only one accredited body for all of their advisers as they believe individuals should be allowed to make their own choice.
The purpose of the accredited body criteria, audit requirement and the FSA/FCA oversight is to achieve a consistent approach while their role becomes embedded. The FSA/FCA will monitor standards across accredited bodies, Firms and advisers to assess the effectiveness of the implementation. This monitoring will include responding, where appropriate, to issues raised about accredited bodies from advisers and Firms.
The FSA/FCA believes that the accredited bodies are better placed to issue the SPS than themselves. A key criterion that accredited bodies must meet is to contribute to raising professional standards in the retail investment advice markets and promoting the profession.
The FSA/FCA believe that issuing the SPS is a key part of this objective, and supports the development of a credible retail investment advice profession to a greater extent than would be the case if the regulator were seen to carry out this function. From a practical viewpoint, accredited bodies will also regularly contact individual advisers and will have operational capability to manage this process effectively.
There will need to be direct contact from each individual – New Leaf will provide the information necessary to enable this to happen.
The FSA/FCA will not require accredited bodies to publish their own register of advisers, although they expect many will choose to do so, consistent with the criteria that they must act in the public interest and develop the profession further. Any such register must make it clear that the Register holds the only record of the adviser’s approved person status.