Blog FSA v TSC: Grilled, but Teflon protected

So the TSC has quizzed the FSA on the RDR and the FSA stood firm under fire. As the dust settles, what are the take-outs for Training and Competence (T&C) Schemes?

There seems no let-up on the need to achieve the professional qualifications QCA level 4 by the end of 2012. While there was an acceptance by the FSA that there would be a potential 8 - 10% (previously claimed to be 20%) reduction in advisers in the market as a result of the RDR (not just the new Professional Standards) this seemed to be seen as an acceptable trade-off for the increased confidence the public would gain by achieving the overall objectives the FSA has set for the RDR.

The FSA representatives were directly asked if there would be a move towards QCA level 6 after 2013. Sants gave a careful response of "I would not say there is a formal plan". However, where he has been less careful was controlling an almost evil smilethat appeared on his face - which has led several commentators on twitter to question the true plans of the FSA. Martin Bamford of Informed Choice tweeted "Any IFA who isn't already working towards Level 6 hasn't seen the writing on the wall."

The Conservative MP Mark Garnier, challenged the concept of directly linking the increased qualifications to protecting the consumer- questioning how more qualifications would stamp out miss-selling? "All you will have is better qualified crooks" he challenged. While his statement is harsh and a bit mischievous, the central point is very valid; that developing staff is more than just passing qualifications.

T&C schemes shouldn't get too focused on the qualification threshold and must ensurethat advisers are more broadly developed with strong professional ethics and values to serve their customers and to achieve their full business potential.

The option of ‘work-based assessments'as an alternative to sitting the written exams is a belated concession that may help some advisers to achieve the threshold qualification. However, the FSA does not want it to be seen as a ‘soft option' and it is likely to be more costly and potentially prohibitive.

More pressure from the TSC came on the FSA to allow grandfathering but again this was dismissed by the FSA's leaders who, embarrassingly, lacked the figures to back up their arguments. As a result, they took further criticism on the social media forums and blogs.

So what can we draw from the session? The FSA intent is clear - despite pressure from the TSC, it it does not seem to feel it needs to gain approval form the TSC and will push ahead with the RDR plans regardless. The reluctance to grant concessions will create an increased pressure on obtaining the necessary qualifications and perhaps more importantly to obtain the wider skills.

No definitive plans exist to put the miminum qualifications up to QCA 6 but don't bet against this happening in the future. Training and competence schemes need to be robust and proactive to help achieve the current and future standards as they evolve.