25th November 2008
APCIMS broadly welcomes the Retail Distribution Review issued today by the FSA, but warns that this is not the time to burden firms with additional costs
The Association of Private Client Investment Managers and Stockbrokers has largely welcomed the FSA’s RDR proposals today on an initial read. We welcome any moves towards increasing professional standards and transparency for clients. However the devil is in the detail, and we will be scrutinising the document further to ensure our firms are not burdened with unintended consequences.
The focus of the RDR is mainly on packaged products but the proposals will impact on our firms’ entire service offering. It is important to understand that APCIMS firms provide investment services and discretionary management across a range of financial instruments which may or may not include packaged products.
Ian Cornwall, Director of Regulation at APCIMS made the following observations at the FSA’s conference on the proposals today:
“Our firms are subject to both the Capital Requirements Directive and to MIFID. Considerable expense has been incurred in implementing MIFID so we are nervous about gold plating changes to Article 4.
“APCIMS welcomes the professionalism and remuneration proposals. Our members have a long history of providing highly qualified services to their clients and we welcome raising the standards across the whole of the Financial Services sector to match this.
“On the detail the Professional Standards Board firms will be nervous that the FSA is constructing an additional regulator.
“We would like assurance that there are clear lines of responsibility between the FSA and new body. We need clarity on any additional costs which our members will be required to pay to the Professional Standards Board over and above that of the existing professional bodies. The Institute of Chartered Accountants England and Wales (ICAEW) for example already charges £250 a year and covers disciplinary costs.
“Some serious thought must be given to the administrative processes not just the principles of the new body and there should be a seamless integration with FSA and the Board’s Training and Competence requirements.
“We have always argued that clients need to understand clearly the service offering and any restriction of the advice being provided. We welcome moves towards ensuring this is absolutely transparent.
“We believe that the prudential requirements for firms which do not fall under the Capital Requirements Directive (CRD) should follow CRD. There should be a greater focus on risk management and Professional Indemnity Insurance should not be taken into account when determining capital adequacy
“Finally we believe that different types of service offering eg guided advice should be different classes within the compensation scheme.”
- ENDS -
For more information please contact:
Dirk Paterson, Head of Communications, APCIMS
on 020 7448 7100
Mobile: 07507 855 428
Email: dirkp@apcims.co.uk
Notes to editors:
APCIMS
- More than 12 million people in the UK currently invest directly in stocks and shares and other financial instruments to secure their financial futures
- APCIMS represents over 140 firms all over the UK who deal primarily in stocks and shares on behalf of individuals and the institutions in which we have our money
- Around £400 billion of the country’s wealth is under the management of our members
- Our aim is to ensure that the regulatory, tax and other changes across Europe minimize impact on the investment community
- We want to lead the debate on regulation in Europe, with UK regulators and with British parliamentarians to make sure consumers are protected while at the same time our industry flourishes in the UK