The standard, known as BS 8577, is also intended to help firms during the latest phase of regulatory transition.
BS 8577 – Framework for financial advice and planning services – sets out good practice for managing an adviser firm and effectively supporting the provision of advice and planning services – in short it specifies what a firm and its advisers should be doing, how and when they should be doing it.
Against a backdrop of low consumer confidence, and confusion over the provision of financial advice, BS 8577 sets the requirements for the consistent delivery of fair, transparent and professional interaction with clients.
To hit the right balance, the new standard has been developed with industry, professional experts and consumer representatives including The Chartered Insurance Institute, Which?, Standards International, The Personal Finance Society, and The Institute of Financial Planning.
BS 8577 will be of particular relevance to firms offering personal, corporate or business financial advice and planning services but may also benefit retail firms providing ‘over-the-counter’ advice, such as high street banks. The standard is applicable to those responsible for the overall management and delivery of financial advice and planning including senior advisers and planners.
Following the standard will help organisations to meet with nine core principles which have been designed to improve the management of their business and to protect the interests of their customers.
Gavin Tisshaw, Chairman of the BSI sub-committee and a Chartered and Certified financial planner CM said: “This new standard for firms is being launched at a critical time with RDR Implementation only a few months away. BS 8577 will act as a differentiator to potential Clients seeking financial advice. When dealing with a firm operating to this standard, clients can have confidence in their ability to consistently deliver a high quality of service. Advisory firms that adhere to BS 8577 should enjoy the peace of mind that comes with having put together and implemented well thought out and robust business systems and processes”.
BS 8577 is also expected to help the financial sector with the transition into the FSA’s Retail Distribution Review (due to come into force in 2013) by defining the minimum standards of business practice and the core professional competencies required for firms and their advisers and planners.
Which? Chief Executive, Peter Vicary-Smith, said: “Now, more than ever, consumers need financial advice they can trust on what to do with their money. We were shocked to find appallingly low standards when we investigated the investment advice given by high street banks and building societies. So we want to see take up from firms to give consumers looking for financial advice confidence that the adviser they choose meets a high benchmark and that they’ll receive reliable, high quality advice.”
“Firms offering personal financial advice and planning services remain a primary channel for distributing products to consumers. We envisage that industry-wide implementation of this new standard will lead to a better informed, well-advised and assured public who will want to make better use of their money,” said Shirley Bailey-Wood, Director of Publishing at BSI. “Greater confidence in financial advice will undoubtedly lead to customers purchasing a wider range of products and services, which is likely to stimulate the financial services market.”