Ethics and Competence

From July 2011, all firms with retail investment advisers will be required to notify the FSA of competence and ethics issues that arise with their investment advisers. What do I need to tell FSA about? Firms should notify the regulator if a retail investment adviser: 1. is no longer considered competent; 2. failed to attain an appropriate qualification within the prescribed time limit; 3. failed to comply with a Statement of Principle (APER); or 4. performed an activity without demonstrating competence and without supervision. If an adviser has breached any of these requirements, your firm must complete a notification form and email it to In what circumstances do I not need to report issues covered by these criteria? Some issues may be put right almost instantly by firms where there is no risk to consumers, or where there is no suggestion of serious competence issues. For example, failing an internal assessment that was part of an ongoing training programme. Why are the FSA asking for this information? One concern the FSA do have is that firms only have access to a part of the picture i.e. the duration the adviser is at their firm. It is the FSA is view that this notification allows the regulator to build a better view of advisers as they move between firms. (Source: FSA)

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