Advisers demand clarity on UCIS as FSA mulls exam route

The FSA is under pressure from advisers to explain how they can become better qualified to recommend unregulated collective investment schemes (UCIS), and avoid falling foul of the regulator’s rules on their use.

Advisers are frustrated by the FSA’s lack of clarity on the issue, after mixed messages from the regulator’s enforcement arm, the Regulatory Decisions Committee (RDC), and its head of conduct and risk, Roy Percival.

Rising numbers of complaints by investors and their advisers to the Financial Ombudsman Service over allegedly mis-sold UCIS have prompted the RDC to consider tighter qualifications requirements for those who advise on the vehicles, according to the minutes of its June meeting.

However Percival, who faced a barrage of questions from advisers confused over what they need to know about UCIS during a Capita Financial conference last week, said unstructured CPD is adequate to prove knowledge of the complex investments.

Susan Hill, chartered financial planner at SCM Financial Planning, said she has searched unsuccessfully for an exam or course that would better prepare her to advise on UCIS.

“Are there going to be exams on all of the retail investments on the FSA’s list? How can we prove we can advise on these without exams?” she said.

In response to accusations from advisers present that the FSA does not approve of unstructured CPD, Percival continued: “You can learn about UCIS and other investments through unstructured CPD such as reading and conferences.

“It is our intention for structured CPD to be the preferred route, but if it is not available, unstructured is acceptable,” said Percival.

However, he added learning about UCIS is “more difficult” than other retail investment products.

“You can go to seminars held by UCIS providers, but you have to take them with a pinch of salt,” he warned.

An FSA spokesperson said no decision on UCIS qualifications has yet been made.