Background to Consultation

Summary

The second stage in the development of the new Appropriate Examination (ApEx) Standards for retail investment advisers has successfully completed the work of drafting the Standards for the Advice Activity Units. These will combine with the Core Standards to complete the ApEx Standards at the new level for each permitted Advice Activity.

The Advice Activities in-scope of this project and for which there are new, draft ApEx Standards are:

• Retail Investment Advice - advising on Packaged Products
• Retail Investment Advice - advising on Securities, or, advising and dealing in Securities
• Retail Investment Advice - advising on Derivatives, or, advising and dealing in Derivatives

The other in-scope permitted activities - undertaking the activity of being a broker fund adviser, and, advising on friendly society tax-exempt policies - have been taken out of scope due to the limited relevance for firms.

Retail Investment Advice - Advising on Packaged Products

New ApEx Standards have been developed for one further technical unit:

• Pensions and Retirement Planning

Whilst not directly in scope of the RDR examination requirements, it was seen as essential to include a unit on Protection Needs and Solutions within the benchmark qualification. The existing Standards were refreshed and updated to develop a new unit:

• Financial Protection

This is a relatively small and non complex unit which will stay at QCF Level 3, maintaining its usefulness to meet any ICOB competence requirements. However the new benchmark qualification will still achieve the overall RDR level 4 requirement.

Standards for the Application of Knowledge have also been developed and these will enable assessment of the whole, combined examination content.

Therefore, to meet the Appropriate Examination requirements for the FSA permitted activity ‘advising on Packaged Products' examinations will need to meet the new Standards in all of the areas, as shown below:

Retail Investment Advice - Securities and Derivatives

New ApEx Standards have been developed for two distinct technical units:

• Securities
• Derivatives

Standards for the Application of Knowledge have been developed and are integrated within each technical unit.

In addition, both technical units have been combined to create the option of a single specialist unit to cover Advising/Dealing in Securities and Derivatives.

Therefore, to meet the Appropriate Examination requirements for the FSA permitted activities ‘advising on Securities/Derivatives', or ‘advising and dealing in Securities/Derivatives' examinations will need to meet the new Standards in all of the areas, as shown below: