The Labour Party has urged the FSA to offer some kind of grandfathering to experienced advisers concerned about reaching the QCF level 4 requirements by the end of 2012.
Speaking at last night’s parliamentary debate on the retail distribution review (RDR), Christopher Leslie, Shadow Treasury minister, said he understands and agrees with the move to QCF level four for new entrants but suggested experienced advisers should be offered a form of grandfathering.
The speech was a significant change of tack from the Labour party who have previously not expressed many concerns about the RDR.
Leslie said: “The crux of the matter must be the issue of qualifications the A-level equivalent threshold for financial advice. Although I understand the move to a QCF level 4 standard, which seems entirely fair, it is sensible that there should be a mechanism to allow some sort of conversion of existing qualifications or existing experience to that new level 4 qualification. I cannot believe it is beyond the wit of the FSA, ministers and others to find some way of doing that.”
Leslie told around 80 MPs, the vast majority of whom were concerned about the RDR, that he agreed with the FSA’s move to greater transparency through the banning of commission and introduction of adviser charging. He said the Labour party wanted to take a pro-consumer approach to regulatory change and that it was “undoubtedly” necessary to change the framework from time to time. But he warned of the effects of losing up to 20% of the IFA market. (article continues below)
He said: “Is it really acceptable that between 10% and 20% of the profession could leave as a result of the retraining requirements, shrinking the availability of independent advice? The hon. member for West Worcestershire (Harriett Baldwin) rightly questioned what would happen if a minister were to stand at the dispatch box and announce the demise of a similar proportion of an industry.”
Leslie also attacked Mark Hoban, the Treasury financial secretary, for comparing the current IFA qualification to a diploma in shift work from McDonald’s. He said: “I am still perplexed that he chose that McDonald’s diploma analogy. Perhaps he will reflect on that and recognise that some IFAs were slightly astounded by that reflection on their professional integrity. He might want to choose his words more carefully.”
Reflecting the one sided nature of the debate he said the minister “must be thanking his lucky stars” there is not a voteable motion.
He said: “Like I say it is a shame there is no motion tonight on this issue as I think it would have been useful for members to express the formal position of the House of Commons on this particular issue.”