Consultations

RDR review

Commenting after publication of the FSA's Retail Distribution Review Discussion Paper in June, CII Chief Executive Sandy Scott said the industry must improve professionalism to tackle the industry's reputational issues and instil a culture of trust for the consumer.

An independent report commissioned by the CII Group from Deloitte and Touche LLP, and submitted to the FSA as part of its review of retail distribution, shows CII/SMP members strongly advocate a framework to raise standards for the public benefit and encourage professionalism and trust across the intermediary sector. Around 90% of the CII Group membership responses to a survey believe the future prosperity of the financial services industry depends on achieving parity with other professions such as accountants and lawyers.

"Our members believe that - despite areas of best practice - the quality of financial advice and professional standards and competence must increase significantly," says CII director-general Sandy Scott. "The FSA's discussion paper is a valuable starting point for the debate on improving levels of professionalism throughout the industry.

"But the changes have to be more than just cosmetic if we are to improve the industry's reputation and regain public trust. For those individuals who have already gained the platinum-plated professional qualification of chartered status, we must make sure this achievement is not diluted. For members who need to upskill, we will provide every assistance and opportunity to help them do so. We look forward to engaging with our membership, consumer advice groups, other relevant stakeholders and the regulator on this issue in the coming months," Scott added.

Professionalism and Reputation

The CII/Deloitte report suggests adopting a 'tiered professionalism' approach to create the opportunity to raise existing standards while developing new standards for emerging sales and service models. Among many recommendations, the report suggests:

• Clearly defined tiers of service from professional through to primary/generic advice;
• Significant consumer input and research is needed to refine the ideas developed by the industry;
• The regulatory dividend must be clearly defined for any changes that are proposed;
• Any distinction between the role of professional bodies, the FSA and the EU needs to be clearly defined;
• By conducting a thorough review of the other major UK professions, the report outlines a model for professional self-regulation in the future.

CII President Lord Hunt of Wirral said: "What the CII membership survey clearly shows is that the industry must now head for the high ground. It must stand as a beacon of trust to the consumer. The CII/Deloitte research findings make it clear that our members believe standards must improve and professional membership will enhance the standing of firms in the eyes of the consumer and the regulator."

Click here to see the ‘Professionalism and Reputation’ report

Thoresen review (Generic Financial Advice)

Click here to see the Generic Financial Advice and Thoresen Review - CII Views (PDF)