The FCA is exploring having a framework where advisers offering simplified advice are only required to hold qualifications that relate to the single area or product upon which they advise.
The regulator said some firms will only want to advise on a single area or a certain product under the simplified regime.
For example, they may want to only provide advice on investing in a stocks and shares Isa.
Therefore the FCA wants to make sure the regulatory burden on these firms is proportionate, and “advisers have a competency framework that proportionately reflects this narrower scope of advice”.
To do this the regulator is looking at creating an initial and ongoing training and competency framework where advisers are only required to evidence competency standards applicable to the single area of advice or product upon which they advise.
But where simplified advice is given across multiple products, for example across investments and pensions, then advisers will have to follow the same framework which is already in place for holistic advice.
“This is to ensure that advisers possess the required technical competency appropriate to the different considerations each area of advice entails,” the FCA said.
“This might not reduce the regulatory requirements anticipated from the proposals outlined in CP22/24, however we think that this is necessary to maintain proportionate consumer protection, given the greater scope of advice proposed above.”
This morning, the City watchdog set out three proposals for reforming the advice guidance boundary, including a simplified advice option.
It said a new form of simplified advice would make it easier for firms to provide affordable personal recommendations to clients with more straightforward needs and smaller sums to invest.
amy.austin@ft.com
