Guernsey Guidelines Issued On Financial Advice Standards
by Mike Godfrey, Lowtax.net, Washington
20 May, 2014
Guernsey's Commerce and Employment Department (CED) has published the first set of guidelines in connection with the forthcoming Guernsey Financial Advice Standards (GFAS), due to be introduced in January 2015.
The GFAS are a set of rules which will regulate the qualifications required to be held by staff of licence holders in order for them to provide financial advice. They will also introduce transparency requirements in connection with the payment of commissions between service providers for the introduction of clients.
The first set of guidelines, related to staff training and educational requirements, include a list of accepted qualifications and have been released following industry consultation between September and November last year. The guidelines have been released now in order to allow time to prepare a training program in advance of the introduction of GFAS next year.
The original consultation paper stated that GFAS will: "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."
The CED is also expected to shortly issue a draft code of conduct for financial advisers, as well as the prescribed form to be used by firms when making declarations to their clients in connection with the receipt of commission or referral fees.
There now follows further industry consultation regarding the proposed changes to the law which will implement GFAS. The following statutes will be affected: the Licensees (Conduct of Business) Rules 2009, the Protection of Investors (Bailiwick of Guernsey) Law 1987, the Conduct of Business Rules and the Code of Conduct for Authorised Insurance Representatives and the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law 2002.
The proposed amendments and guidelines are likely to be further refined before their final implementation in January.
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