by Susan Edmunds
IFA Chief Executive Fred Dodds
The Code Working Group has revealed its initial proposals for the new code of conduct for financial advisers.
One of the aspects it covers is competence, knowledge and skill.
The proposals note that the financial advice provider and any financial adviser or nominated representative involved in giving the financial advice must have, in aggregate:
Working group chairman Angus Dale-Jones said, if financial advisers and nominated representatives did not have those qualifications, the financial advice provider they worked for would have to be able to show that it had the processes and systems set up to fill any gaps in their knowledge.
“If you’re running a business model where you’re not relying on people with that level of expertise, you’re then backfilling with processes and systems to deal with the requirement to make sure the competency is displayed to that equivalent. That’s a big job.”
What it involved would depend on what was being delivered.
“If you’re relying on someone to be the smiling face of an implemented system then there’s clearly not too many variances and it’s a more straightforward job but if you see it as a shortcut so the team doesn’t have to get qualifications, it’s not. It’s more complicated."
IFA chief executive Fred Dodds said he expected to see big adviser groups offering to “fill in the gaps” for advisers who did not have level five certificates.
He said many RFAs had stuck with that designation because they did not want to go through the hurdles to be AFAs. “Why would they bother to go anywhere else if there is somewhere someone can look after them? That could be an unintended consequence.”
They could then be stuck and unable to move to another provider that did not have those processes, he said.
But Dodds said there was no excuse for people not to do the level five certificate. “It’s time for advisers to answer the question; have I decided to have a career in financial services? If the answer is yes they should go and do level five.”
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Try this definition from Wikipedia:"In the social sciences, unintended consequences (sometimes unanticipated consequences or unforeseen consequences) are outcomes that are not the ones foreseen and intended by a purposeful action. The term was popularised in the twentieth century by American sociologist Robert K. Merton."
Policy analysis seems to have a different dictionary than normal usage.
A "necessary casualty of war" would be a more apt description of the probable flight to the big end of town.