Tied advisers and advisers working for banks and building societies are lagging behind independent advisers in pursuit of the qualification levels required by the RDR.
A research report commissioned by the FSA and carried out by RS Consulting in August, found that of the independent advisers questioned about qualifications, 50% held at least one appropriate level 4 qualification. A further 39% were studying for one at the time of the survey while another 4% intended to begin and continue in the industry.
However, only 36% advisers in banks or building societies held an appropriate level 4 qualification while only 29% of other tied advisers held the required qualification.
Advisers from smaller firms are more likely to already have an appropriate qualification compared to advisers working at larger firms, 61% compared to 42%, and are more likely to have already achieved QCF level 5 or 6, 31% compared to 14%. Smaller firms are also more likely to have multiple appropriate qualifications, 27% compared to 14%. The research categorises firms with less than 20 advisers as smaller firms.
The report says: “Interestingly, the smaller firm RIAs were also more likely to cite personal motivation as their main driver to meet the RDR requirements, as opposed to reacting to the requirements of the FSA or their firm, than RIAs in larger firms (49% as against 26%).”
Overall, 21% of advisers currently hold a qualification above QCF Level 4.
The research firm says its study shows there are a number of unresolved questions and gaps in the understanding of the RDR requirements which the FSA should address through “more effective communications”.
It also warns the FSA not to be complacent on a trend towards lower morale in the industry. It says attitudes have become more negative since the 2010 survey with 35% of advisers willing to recommend advice as a career while 12% would strongly discourage someone from entering the profession. This rises to 48% among advisers who will be leaving the industry.
It says: “The FSA, as the regulatory authority, should not be complacent about this trend, which could, if it continues, undermine the future health of the industry and regeneration of the population by dissuading new young blood from entering the profession.”
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