Consultation on the implementation of Guernsey Financial Advice Standards (“GFAS”)
This consultation paper has been issued following a request by the Commerce and Employment Department (C&E) for the Commission to take appropriate steps to implement the new Guernsey Financial Advice Standards (“GFAS”). As indicated in a statement released in April, the Commission has since met with an industry working group to discuss the implementation of GFAS and has taken their feedback into account in the preparation of the consultation paper.
Rationale for change
C&E has identified that the introduction of GFAS would protect and enhance Guernsey’s reputation as a leading International Financial Centre, provide better value service from more professional advisers and a more transparent fee structure - all of which should benefit consumers.
The implementation of GFAS is intended to increase professional standards, make adviser charging more transparent and reduce potential conflicts of interest. This will contribute to the protection of the public against financial loss due to potential dishonesty, incompetence or malpractice by persons carrying on finance business.
What is Proposed?
This paper sets out the steps that have been identified by the Commission, together with the Commission’s proposals for changes to:
the Licensees (Conduct of Business) Rules, 2009 issued under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended (“POI Law”); and
the Conduct of Business Rules and the Code of Conduct for Authorised Insurance Representatives issued under The Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002, as amended (“the IMIIL”).
Of particular significance in the proposed changes will be the requirement for relevant authorised insurance representatives ("AIRs") and investment advisors, who are advising retail clients, to obtain a FCA level 4 qualification within a specified timescale.
Who would be affected by these changes?
Businesses licensed under the POI Law whose controlled investment business includes advising retail clients in respect of controlled investments.
Insurance intermediaries licensed under the IMIIL, and their AIRs, advising on or arranging long term single premium* and long term regular premium products* but not long term pure protection products*.
Licensed insurance intermediaries, and their AIRs, providing advice in all cases of long term business including long term pure protection products* and non-retail clients, in respect of the disclosure of the basis of, or the amount of, charges for services provided.
* Terms to be defined in the new rules.
Please click here for the Consultation Paper.
Please click here for the Media Release.
Please provide any responses to the questions raised in the paper to [email protected] by close of business on 8 November2013.
A feedback statement covering the substantive issues raised by respondents will be issued by the Commission following the close of the consultation period.