Capital Resources

Okay enough is enough, when exactly do you think the FSA are going to listen to us at all. Surely we need to be more pro-active in opposing this and some of the other RDR changes. I'm really fed up now.

Posted by: Nick Thompson

Capital Resources

Not at all surpised by this FSA 'initiative' which is clearly aimed at forcing directly authorised IFAs towards networks, thus making regulation easier for them to administer. I doubt this will be reflected in a reduction in regulatory fees though!

Posted by: Anonymous

what lesson has the FSA learned?

Paul Sharma tells us taht we have learned something as a result of recent events and that firms need a capital reserve to help them weather the storm. Just how locking a chunk of capital away so taht you cannot touch it without breaching capital adequacy rules is not clear to me. Sadly, I think we have learned different lessons from the recent market turmoil!

Posted by: David Ingram

Capital Adequacy

Advisers might recommend clients keep an emergency fund of 3 - 6 months net income so, FSA logic has it, why don't they? The problem, as ever, is in the detail. Accountants at large distributors (banks etc) will have a lot of fun arguing the definition of 'annual fixed expenditure'; for eg what proportion of group overhead charged to the 'IFA' arm will count? The law of unintended consequences will be out in force; costs for firms with an 'employed' adviser model will be a lot greater than for those with self employed pushing firms down a particular direction, perhaps. Its also possible to move money around within a group of companies using 'intra company loans' to make the regulated entity appear well capitalised when the debt is to the group! Lets just wait and see what the actual rules are, and how the accountancy world interprets them, before we panic.

Posted by: Christobel