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Filling the gaps in qualifications for RDR will be taxing

The RDR is giving advisers plenty of things to mull over, not least of which is meeting its competency standards

The Financial Services Authority’s Retail Distribution Review seems to have taken a long time coming, but the clock is ticking.

If you are an independent adviser firm I am sure the RDR and how to comply with it is high on your list of things to do in 2012.

For those who do not know where to start the FSA has recently issued a helpful guide for firms titled ’RDR is your firm on track?’.

It can be downloaded from the FSA’s site at pubs/other/rdr-guide.pdf.

Clearly, many advisers will need to adjust their business models. They will need to make decisions over whether to offer independent or restricted advice and how they amend business models to take account of fee-based charging models.

Advisers will also have to consider which accredited bodies will provide them with Statements of Professional Standing and whether their continuing professional development programmes are appropriate.

Although such areas should not be too time-consuming decisions need to be made.

The area which may become more of a time challenge, unless something is done now, is any gap-filling that may be required to meet Level 4 examination standards by the end of 2012.

The two main issues are:

  • Are advisers assessed as competent as at June 30 2009 on target to meet an increased level of qualifications by December 31 2012, including, where applicable, completing their gap fill?
  • Are other advisers, such as new entrants, on track to complete their qualifications and gap fill? Their deadline will be 30 months from starting the activity of advice or within 30 months from January 1 2011.

Advisers should not underestimate the work involved in obtaining Level 4 qualifications – they are more challenging than the previous Level 3 standard and a study plan needs to be put in place to achieve them.

If my experience of past exam deadlines is anything to go by there will be a mass rush in December.

Mortgage advisers, under the Mortgage Market Review’s revised proposals, appear to have got off the Level 4 qualification requirement.

The MMR proposal is limited to requiring all sellers, including those who do not give advice, to hold a Level 3 qualification.

But when it comes to it, how many mortgage advisers will plan ahead, second guess the future and take a Level 4 qualification while it remains their choice and they can do it without a looming deadline?



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