PROFESSIONALISM AND TRANSPARENCY SHOULD UNDERPIN RETAIL DISTRIBUTION

20 December 2007

Responding to the Financial Services Authority's (FSA) Discussion Paper on the Retail Distribution Review, the Investment Management Association (IMA) has welcomed the FSA's desire for high professional standards which are key to improving advice and restoring consumer confidence and trust.  Transparency across all investment products is also critical in tackling commission-bias and giving consumers a clear understanding of what they are paying for. 

However, IMA is sceptical about the FSA's proposal to label advisers according to the type of advice and service they offer; this could actually have an adverse affect and cause confusion in a market where consumers already have a wide range of options available to them.  Instead, the IMA believes all advisers should be required to gain and maintain high professional standards through appropriate and ongoing qualifications. 

Commenting, Julie Patterson, Director of Authorised funds and Taxation, of the Investment Management Association said:

"It's no secret that commission-driven mis-selling exists in the retail advice market and that professional standards are not consistent.  But simply adding to the complexity of labels will not tackle this.  The FSA's commitment to improving standards and transparency in remuneration is welcome; not only will it help to tackle mis-selling, it will also give consumers assurance that they are getting the best advice possible."

IMA's response to the FSA's discussion paper on retail distribution can be viewed here.