fsa clarifies 30m rule covering rdr activities

The FSA has confirmed that the 30-month rule applies to “most but not all” RDR activities.

fsa clarifies 30m rule covering rdr activities


In her latest RDR newsletter, Linda Woodall, head of the investments department at the FSA, said she expects the rule to “only impact a small number of individuals”.

The 30-month rule covers the time allowed within which a retail investment adviser has to gain the appropriate qualification from the point at which they start to advise individual clients.

There are caveats, as Woodall adds: “The 30-month rule does not apply to advisers who intend to both advise on and deal in securities and derivatives because they cannot start these activities until they have completed all of the modules of their qualification.”

It covers trainee advisers who are under supervision; it covers packaged products only; it does not cover existing advisers.

The latest research carried out by the FSA shows a marked increase since the summer last year – when the research was previously done – in the proportion of advisers with an appropriate qualification (from 50% to 71%).

Also, 93% of advisers are on track to get the level 4 qualification in time.

Elsewhere in her newsletter, Woodall reminds those offering facilitated adviser charging to consider how client money rules apply.

She explains: “For MiFID (Markets in Financial Instruments Directive) investment products, the adviser charge will typically be client money in the hands of the firm. This means the client needs to agree to the payment being made, and the amount – the firm will need to be able to demonstrate both of these.

“Payment can only be made when the charge becomes due and payable to the adviser under the terms of the contract between the adviser and firm, and the firm remains liable to its customer for the money until properly received by the adviser.”



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