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RDR debate: MPs call for grandfathering and qualifications rethink
by Alex Steger on Nov 30, 2010 at 07:49
Backbench MPs have called on the Financial Services Authority (FSA) to reconsider its stance on adviser qualifications and allow grandfathering, in a House of Commons debate on the retail distribution review (RDR).
MPs from across all parties criticised the cost benefits of the RDR and the impact qualifications may have on adviser numbers and access to advice.
Around 80 MPs attended the debate and repeatedly questioned financial secretary to the Treasury Mark Hoban over the impact of the RDR and the regulator's accountability.
Mark Garnier (pictured), Conservative MP for Wyre Forest, who with Conservative MP for West Worcestershire Harriett Baldwin proposed the debate, said the RDR’s level four qualifications requirement did not take into account experience and placed too many time and cost demands on advisers.
‘RDR is requiring all financial advisers to attain the QCF level four pass and in the broadest sense that is not unreasonable,’ he said. ‘However, what it does not take into account is there are a great many IFAs who have a wealth of experience but with an average age of 47 little enthusiasm to start taking new exams.
‘It is estimated that these exams will require one hundred hours of study for each of them; this for an individual who needs to earn a living and may be working by himself in a rural community,' he added. ‘I can see no reason at all for not introducing grandfathering rights and indeed when the FSA was set up they introduced grandfathering rights when IFAs came over from the Personal Investment Authority.’
Garnier’s appeal for grandfathering was backed by Conservative MP for South Derbyshire Heather Wheeler and Conservative MP for Aberconwy Guto Bebb.
Baldwin (pictured) argued the new qualification requirements would not stop mis-selling.
‘If I thought passing an exam would prevent mis-selling and we would never have any more mis-selling in the future I would be more supportive of this idea, but ..an ability to pass an exam…doesn’t seem to me to preclude mis-selling in the future,' she said.
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