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RFAs backing call for one law for all

The PAA wants one set of standards for all financial advisers - but it says it has the backing of its RFA members.

Wednesday, July 29th 2015, 6:00AM 2 Comments

by Susan Edmunds

In its submission to the Financial Advisers Act issues paper, the PAA says the Code of Professional Conduct, currently only for authorised financial advisers, should apply across the industry.

That would mean RFAs would have to achieve a level five qualification and undertake ongoing professional development, as well as meet higher conduct standards.

But PAA compliance expert Angus Dale-Jones said it would be a benefit to all advisers.

He said it would strengthen the system and the Code Committee could then be given the discretion to tailor the standards to different advice situations.

He said it would offer more flexibility than the hard-line delineation set down by regulation.

The PAA's membership is mostly RFAs, who would be most affected by such a change.

But Dale-Jones said a recent survey of members showed support for the idea.

Two-thirds of PAA's RFA members supported a single competence standard across the industry. More than 70% liked the idea of a single conduct standard.

A quarter of respondents said the QFE regime what the aspect of the FAA regime they most wanted to see changed.

Dale-Jones said the way changes were implemented would be important.

"It has to be dealt with carefully. If you're trying to boost the reputation of advisers and advice and promote the value that advisers add, there is a give and a take."

The Code of Conduct could also protect advisers, he said.

He said RFAs were exposed under the current legislation because no one had defined what was expected by the requirement that they act with care, diligence and skill.

A code that laid out a set of standards would give RFAs comfort that they were doing what they were required to do. "It's more a clarification of standards rather than raising them," Dale-Jones said.

The PAA also wants the Code Committee to be given the ability to prescribe safe harbours in certain circumstances. That could include offering a guide to how advisers could be deemed to have assessed the suitability of their advice.

At present,  many advisers put a lot of work into making sure they can show they have assessed suitability.

Dale-Jones said if the Code Committee prescribed a series of steps that advisers would need to tick off to have satisfied the suitability requirement in less complex advice situations, it would reduce the regulatory burden.

A code that offered a set of standards would give RFAs comfort that they were doing what they were required to do.

The PAA also wants only published and roboadvice to be counted as class advice, and better use of the FSPR so that clients can compare advisers more easily.

It will submit on the question of commissions after its summit on advice accessibility later this week, and on the role of professional associations in a couple of months' time.

Tags: Financial Advisers Act PAA registered financial advisers

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Comments from our readers

On 29 July 2015 at 10:08 am Referee said:
A large number of RFA's had already accepted and operated under the Code's standards, so I for one totally agree.
On 30 July 2015 at 10:42 am P Jones said:
A single standard is sensible but this is the old trick with polls and employed by all political parties crusaders and other zealots.

Ask a benign question, get the result you want and then twist the outcome to be applicable to some topic slightly different.

Does anyone really believe that 70% of RFAs want to sign up to becoming AFAs yet this is Dales-Jones' conclusion as reported.

Its about time the PAA members woke up to the fact that their executive is not acting in their best interests and we are becoming pawns in a turf war by the insurance coys to kneecap Partners Life while our executive pursue their own private agendas without our mandate over churning, coy trips, commission envy etc.

Be very aware or the PAA membership will be sold down the river and forced out or be made into afas while the banks, travel agents and credit card coys continue to sell their travel insurance where apparently the majority of the public complaints arise
P Jones

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