Investment advisers will need to meet enhanced standards of professionalism under new proposals by the Financial Services Authority (FSA), as it plans to "rebuild people's trust and confidence" in the investment market.
Under the Retail Distribution Review (RDR), the FSA is proposing to create a new "in-house governance structure" by ensuring advisers achieve new, higher level qualifications, as well as adhering to common ethical standards and meeting enhanced standards of continuing professional development.
By the end of 2012 the FSA states that advisers, whether independent or restricted, will need to demonstrate greater knowledge and skills, and meet enhanced standards in dealing with clients.
At the same time, the FSA is also asking professional bodies that are registered with and overseen by the FSA, to play a greater role in helping their members meet the proposed professionalism requirements.
Commenting, Sheila Nicoll, director of conduct policy at the FSA said: "Raising professional standards is a core strand of our reforms of the retail investment market. Through this, people will come to expect the same level of professionalism from investment advisers as they do from other professions.
"We will closely supervise the necessary improvement in standards that we are seeking to bring about which, along with the other aspects of the RDR, will come into force from the beginning of 2013.
"We have always said that the RDR's proposals are an opportunity for firms to modernise their practices and to put the interests of their customers first."
Welcoming the proposals, the Investment Management Association (IMA) is now calling on the FSA to make consumers aware of the proposed improvements to investment advice.
Victoria Nye, director of education and training at the IMA said: "The next step is to ensure that the investing public is aware of the framework and appreciate that it has their interests at heart.
"In the absence of an Independent Professional Standards Board, the FSA, with the professional bodies, must focus on communicating the positive impact of the changes to consumers so as to facilitate their decision to use a professional adviser."
© Fair Investment Company Ltd