Under the rule change, advisers must achieve a recognised QCF Level 4 qualification by 1 January 2013. Those who do not will be banned from giving advice until they reach the new minimum standard.
On 15 December, Gay told MPs on the All Party Parliamentary Group on Insurance and Financial Services, that he hopes and expects the FSA to show some “latitude” on the timeframe.
He wants reassurances from the regulator it will take a “reasonable” attitude to those who do not meet the deadline.
“The point is, are advisers committing to the journey? If they are is there any purpose served by dropping a guillotine on them in 2013?,” he said.
Sheila Nicoll, the FSA’s director of conduct policy, refused to rule out a timescale change, saying talks were continuing.
“I’m not going to say here and now ‘yes we will be reasonable’. That would not be fair to those already doing exams.
“We will continue to talk to consumer organisations and industry bodies leading up to and past implementation.”
CII chief executive Sandy Scott told MPs he is “not concerned” by what he called the vocal minority of advisers who are critical of the RDR, because “they are not the future”.
Without the new Level 4 qualification, UK advisers risk being less qualified than their Indian counterparts, he warned.
“The effect of the RDR in the UK is 30,000 more exams need to be taken. Next year financial advisers in India will take about two million exams, and there is no grandfathering there.
“I would not like to see standards in the UK which are lower than India.”
However Harriett Baldwin MP, who has been campaigning on behalf of IFAs for a softening in the implementation of the RDR, last night slammed the FSA for the “paucity” of its evidence for higher qualifications.
“To put someone out of business, you should have irrefutable evidence that qualifications prevent mis-selling,” she says in a statement.
“No-one would disagree with the statement that IFAs should aspire to higher qualifications.
“My concern is the cliff-edge whereby IFAs who fail exams are not allowed to ply their profession after January 1st 2013.”
She says the 2003 Australian study used by the FSA to jusify the link, which covers 150 plans, shows the difference between the quality of the plans was not “statistically significant”.
The FSA’s 2010 UK evidence only covers 12 firms and 116 plans.
Baldwin says: “This evidence is not good enough.”
