why more capital?

The FSA appear not to have provided any evidence that increasing the capital held in IFA firms will be of benefit to the consumer. But how to we press them to make the case? It is becoming very clear that the FSA have no respect for the small practitioner firm community and that they wish to push us out of business. Our clients value our services and we can prove that they do. We somehow have to try and resist these moves by the fSA but I really do not know how we can-unless we can somehow call them to account for increasing the burden of regulation to the extent that smaller firms can not cope with the time the regulator requires us to spend on reporting to them, and now the threat of a currently not clearly defined balance sheet requirement. How can we require the fSA to set out their reasoning more clearly using actual research and fact to back up their actions? The facts do not back imposing any more regulatory burdens on IFA's Is some kind of campaign required? Can we get a spokesperson onto a current affairs programme? Can we get consumer orgnanisations to back us?

Posted by: graham worrall

Dead Money

The FSA's capital adequacy requirements are ludicrous. Good IFA's will put their hard earned cash aside (it can't be touched - ever unless you want to be in breach.) Bad ones in trouble will spend it all and close down; leaving liabilities to FSCS. If the FSA's mandarines had a brain cell between them they would worry about real risks to the economy like the banks, who nearly bankrupted us all on their watch - pathetic! Nero fidlding comes to mind...

Posted by: Simon Webster

capital adequacy

Frankly if we can't put the value of 3 months expenses to one side then we should not be in the business of advising others what to do with their money! A case of do what I tell you not what I do.

Posted by: derek richings

Whose idea was it

Looking at the ABI's origional submission to the FSA, it was the banks idea that IFAs needed higher capital adequacy. The FSA implements this without due consideration or any rational whilst allowing those that concieved the idea for them to pour their balance sheets down the drain. Unbelievable!

Posted by: Bob Newton

Daft Comments

Derek Richings I can’t believe you seriously made that statement. Did you know that the FSA has proposed holding this sum for six years post retirement no doubt so that they can dip into this pot to pay for yet more of their retrospective reviews. The other comment I would take issue with is the use of the equity in ones home! This would not be possible if your ran your business via a Ltd Co unless your gave the FSA a personal guarantee and unincorporated your Ltd Status. As the FSA does not adhear to the rule of law you would need a brain transplant to agree to this!

Posted by: Simon Mansell

Compare and contrast IFA treatment with that of the banks!

According to the Ernst & Young report, the FSA forecasts that almost a fifth of financial adviser firms are now loss-making and a further 24 per cent have reported profits of less than 5 per cent of turnover. The irony is that this is due to the collapse of the banks and falls in the market, all on the FSA watch. At a time when millions of pounds have been pumped into the banking sector to keep them afloat just look what the FSA is doing to the independent sector, the only sectors proven to have consumer confidence. The FSA have proposed changes to capital adequacy to say all firms will be required to hold a minimum of £20,000, representing double of the current level of £10,000. This is dead money sitting in a non-interest bearing account.

Posted by: SIMON MANSELL

New IFAs from Redundant Bank/ Life Office Staff

These proposals wont help what appears to be a new wave of IFA recruits coming from redundant bank/ life office staff

Posted by: John Hooper