Accredited Bodies

Accredited Bodies - Background

The FSA have stated that the new professionalism requirements of the RDR will improve the level of consumer confidence and build general levels of trust in the retail investment sector.
By 31 December 2012, advisers will need to:
- Subscribe to a code of ethics;
- Hold an appropriate qualification, including any qualification gap-fill;
- Carry out at least 35 hours of continuing professional development a year (including 21 hours of structured CPD); and
- Hold a Statement of Professional Standing (SPS) from an Accredited Body.
These standards will be maintained and enforced by the FSA. Firms will be required to submit data to the FSA about their individual advisers.
Accredited bodies will inform the FSA of any advisers who are not meeting the standards required to obtain an SPS.
If existing advisers do not meet these standards they will not be able to make personal recommendations to retail customers from 1 January 2013.
The FSA have made it clear that advisers are individually responsible for obtaining and maintaining an SPS.

To become accredited, an organisation will need to satisfy four requirements to:
- Act in the public interest and further the development of the profession;
- Carry out effective verification services;
- Have appropriate systems and controls in place and provide evidence to us of continuing effectiveness; and
- Co-operate with the FSA on an ongoing basis.
In return for accreditation, the bodies must agree to certain requirements including how they will check advisers are subscribing to standards and the frequency and nature of sampling individual adviser CPD records. This means there will be a more consistent approach in interpreting and monitoring professional standards.
If an accredited body wants to set a standard for their members and subscribers over and above the basic requirements, the FSA imposes no restriction on them doing so.

Accredited bodies will:
- Ensure that all of the advisers who use their services are subscribing to a code of ethics that is consistent with the Statements of Principle for Approved Persons;
- Check that all of the advisers who use their services hold an appropriate qualification, including verifying 100% of their gap-fill where required;
- Carry out a random 10% CPD sample check (the body can exceed this requirement if they choose); and
- Recognise CPD activity from a range of providers, including firms' own in-house schemes.
All advisers will need to hold a SPS that is issued by an accredited body. The SPS confirms that advisers:
- Have adhered to the ethical standards;
- Hold the required qualifications (including gap-fill); and
- Have completed appropriate CPD.
Advisers may want to show the SPS to their clients, especially prospective clients.
The SPS is evidence that the advisers subscribe to the professional standards. This does not remove the obligation on a firm to assess competence.
An adviser does not have to be a member of an accredited body to receive their SPS.