The FSA have formed new rules whereby advisors can no longer be paid commission for selling a firm’s products. Advisory firms will now be forced to be fully transparent, by clearly stating their position as independent, or restricted to selling the products of a particular set of companies.
Advisors will now be forced to charge up front fees for providing their services, and to clearly define whether that fee is fixed, or as a percentage of the amount to be invested.
In addition, the new rules will require for advisors to hold a higher level of professional qualification. In the past, advisors were only required to hold a level 3 in Qualification and Credit Framework (QCF), this has now been increased to a level 4 qualification.