Investment managers which are considering giving non-advisory roles to advisors who fail to meet incoming mandatory qualification standards should exercise extreme caution, the
Financial Services Authority has warned, IFA Online reports.

According to the publication, several firms are thinking about giving “paid introducer” positions to advisors who do not reach the new qualification requirements coming in at the start of 2013 under the regulator’s RDR package of reforms. However the FSA has warned that these “lay advocates” - who will function as introducers and a point of contact for legacy clients - must not stray into advising clients by accident.

“The risk of former advisors who remain in contact with their clients giving unregulated advice depends on how the firm manages that risk. Any ex-IFA employed in this capacity, regardless of the job title attached, will have to be careful not to stray into advice,” an FSA spokesperson was quoted as having said.

The FSA had not confirmed the details of the report at the time of publication.

Under the RDR reforms, after 1 January 2013 advisors will have to be qualified to QCA Level 4, whereas previously a Level 3 qualification was sufficient. The new minimum qualification has caused some consternation in the industry, predicated on the fact that many experienced advisors will not relish the thought of returning to the classroom and may feel forced out of the industry. However it should be noted that there are vocational “top up” routes to meeting the new requirements now available.