The JFSC has now published a paper setting out its final position on its Review of Financial Advice (the Jersey equivalent of the UK Retail Distribution Review).

The paper confirms that only persons registered to undertake Class C and D investment business will be affected by the review.

The review will distinguish between professional clients and non-professional clients (or retail clients). The principal changes, which will apply from January 1 2014, are that:

• Advisers will be required to hold an appropriate qualification at Qualifications and Credit Framework Level 4 or above in order to be able to give financial advice in or from within Jersey to retail clients. Advisers to professional clients must be “appropriately qualified”, and;
• Remuneration by way of commission will not be permitted in respect of advice given to retail clients resident in Jersey.

The introduction of the review will result in certain changes to the Investment Business Codes of Practice. The proposed amendments are set out in a consultation paper issued by the JFSC. The principal changes of note include:

• Differentiating between professional clients and retail clients and requiring registered persons to develop policies, procedures and controls to assist in client classification;
• Establishing minimum professional qualification standards for investment employees, and;
• Restricting the circumstances under which a registered person may be remunerated by way of commission.