What, why and when? A quick look at accredited bodies

As part of a new, regular feature cutting to the core of some of the industry's key developments, IFAonline takes a quick look at accredited bodies...

What are they?

Accredited bodies will help the Financial Services Authority (FSA) maintain high standards for the industry in the areas of qualifications, ethics, and Continuing Professional Development (CPD).

They will check advisers qualifications and CPD, but their role has nothing to do with the actual advice given by firms, which remains the firm's responsibility.

Once an accredited body is satisfied an individual has met the required standards set by Retail Distribution Review (RDR), it will issue him or her with a Statement of Professional Standing (SPS). *Remember* Advisers do not have to be a member of an accredited body in order to receive their SPS.

Finally, any trade/professional body or association has been invited to apply for accredited body status. Today, the FSA awarded six organisations provisional 'accredited' status, subject to final acceptance later this year.

Why are they being set up?

A little over two years ago, the FSA was planning to set up a professional standards board (PSB), independent of the regulator, to oversee and maintain standards across the industry.

The FSA eventually decided against this, choosing instead to keep this as part of its key responsibilities, with the help of accredited bodies.

When will they come in?

Good question, even if we do say so ourselves. The FSA's professionalism rules, which accredited bodies will effectively police alongside the FSA, do not come in until 1 January 2013.

However, the vast majority of the RDR's requirements must be put in place by firms BY THAT DATE, including having an SPS.

The FSA is expected to confirm final acceptance to accredited body applicants later this year, but a number of bodies have already begun checking advisers qualifications and CPD records.

Anything else?

SPSs are the 'property' of accredited bodies. This means they have the power to remove an adviser's statement if it considers they are failing to meet the required competence and ethics standards. Should this happen to you, you must tell your regulated firm that you no longer have an SPS.

Accredited bodies will carry out a 'random' 10% CPD sample check (the body can exceed this requirement if they choose). *Remember* After 2012, advisers will be required to carry out a minimum 35 hours CPD. At least 21 hours of this must be structured and 'outcomes-focused'.