The RDR will apply to all advisors in the retail investment market, regardless of the type of firm they work for. Product providers, banks, trade and professional bodies, independent financial advisers and wealth managers will all be affected.
Essentially, through the RDR, the FSA has raised the level of benchmark qualification for retail advisers from the present OfQual Level 3 to a minimum OfQual Level 4. For many advisors this will mean completing a new qualification which contains four core areas as required by the FSA:
- regulation and ethics
- investments principles and risk
- taxation
- planning
New entrants
If you have yet to work in the retail investment market or do not hold any retail investment qualifications you still fall under the RDR, but you are not subject to the 2012 deadline. However, the FSA intend to implement back stop dates for new entrants. You will need to take one of the new Ofqual level 4 qualifications. Click here for information on 7city's RDR compliant training options.
Current advisors
If you were deemed competent at or before 30th June 2009, you will need to hold a transitional qualification and take CPD top-up (gap-fill) in order to become RDR compliant. You will be able to reach RDR compliancy by filling the gaps between the qualification standards of your current qualification and that of the new OfQual level 4. This step change process is referred to as “CPD top-up”, or “gap filling”. More info>>
Training managers and compliance
You have responsibility for ensuring that the staff you manage meet the RDR requirements and achieve a qualification of Ofqual level 4. Keeping track of qualifications and CPD hours completed will play a crucial role in demonstrating RDR compliance.
As always, training and education will play a critical role. This needs to include the development and examination of ethical standards, which will make up approximately 20% of the exam content and which the FSA plans to formalise for the first time in the UK through the RDR. It is worth noting that ethical standards are not just a focus for those in the retail market. In the consultation paper, CP10/12 “Competence and ethics,” the RDR states that ethics should be a major consideration throughout the industry.
Ongoing CPD requirements for everyone
Over and above the qualifications, and separate to CPD top-up (gap fill), all advisers involved with the RDR will be required to take part in further ongoing Continued Professional Development (CPD). The FSA has introduced compulsory CPD to assist advisers in maintaining ongoing competence.
Ultimately, investment advisers who have met the RDR requirements will earn a Statement of Professional Standing, confirming that he or she is qualified to give professional and trustworthy advice, has up to date industry knowledge and subscribes to a code of ethics. The Statement of Professional Standing will be issued by FSA-accredited 3rd party professional bodies and provide independent verification that advisers are meeting and maintaining the new professional standards.