§ Norman LambTo ask the Chancellor of the Exchequer (1) what assessment he has made of the current qualification levels for financial advisers; and what assessment he has made of whether these are of a high enough standard to protect the public; [147637]
(2) if he will make a statement on the badging and level of qualifications for financial advisers; and what assessment he has made as to ways in which this could be simplified; [147638]
(3) what assessment he has made of the extent to which a simpler form of badging to indicate the qualification and level of competence of a financial adviser would improve consumer confidence. [147639]
§ Ruth KellyConsumer protection should take account of the requirement that those working in the financial services industry are capable of properly performing the work they undertake at all levels, and that consumers should thereby have confidence in the competence of financial advisers.
The Financial Services and Markets Act 2000 charges the Financial Services Authority (FSA) with securing the appropriate degree of protection for consumers. Vetting by the FSA aims to allow only those firms and individuals satisfying the necessary criteria (including competence) to engage in regulated activity.
The FSA sets training and competence policy, including minimum standards for regulated firms and examination standards. The purpose of the FSA is to set the standards of training and competence that firms should reach.
The FSA works closely with both the industry and consumers, and keeps training and competence requirements under review. It carried out a significant review of the qualification regime for financial services in November 2002. In particular the FSA proposed in Consultation Paper 194 (CP194) that the training arrangements should be simplified and competence assessed by using examinations that are 'appropriate' rather than a published list of FSA 'approved' examinations. This proposal gives firms greater flexibility, because they will be able to choose an examination that is appropriate in their circumstances.
The FSA liaises closely with the Skills Council for Financial Services to ensure that consumer protection is at the forefront of training and competence policy. The Skills Council for Financial Services has responsibility to develop world class occupational standards in the financial services sector and to ensure that all sector specific qualifications are based on them.