Vol. 397 No. 1
63 Mr. J. O'Keeffe asked the Minister for Finance whether any regulatory body is in existence for those describing themselves as financial advisers or financial consultants; whether there are any provisions prescribing minimum qualifications or requiring professional indemnity or for a compensation fund in the event of a default with client's funds; and, if not, whether he has any proposals in this regard.
A variety of persons may fall into the category of "financial advisers" such as lending institutions, insurance companies, portfolio managers, brokers, accountants and solicitors. The Deputy will be aware in this connection that licensed banks and building societies are regulated by the Central Bank of Ireland, brokers on the Stock Exchange operate under regulations approved by the Minister for Finance and brokers outside the Stock Exchange are the responsibility of the Minister for Industry and Commerce. Solicitors operate under specific statute and accountants by self-regulation.
I assume, however, that the Deputy's concern is, in fact, persons outside the Stock Exchange whose sole or main business is to provide investment advice or who hold themselves out as doing so to the public. Since the overwhelming majority of these particular advisers are insurance brokers also, the provisions of the Insurance Act, 1989, apply in their case. However, where such investment advisers give advice in respect of non-insurance related investment products only, they are not governed by specific regulations. While general consumer protection law of course applies to some extent, the need for specific regulatory legislation in such cases is an issue for consideration in the context of the proposed EC Directive on financial services in the field of securities.
