From the editor: April Fool?

Last week we covered a 'story' about restricted advisers being told to wear red by the FSA to warn customers of their limited market reach. But why was this "entirely believable"?

According to our report, IFAs should wear “neutral colours” in client meetings such as ivory, black, grey and white to reflect their independent status.

The story was an April Fool, although it didn’t fool some of our readers and perhaps this is the point. As one adviser says: “This is just the sort of madcap idea that the FSA is capable of thinking up! It might be April Fools’ Day but anything is possible.”

IFAs are so used to missives from the regulator controlling all aspects of their business – from what they say to how they act – that a directive on dress does not appear out of place.

The question is how far will this control extend in the future, especially if the FSA uncovers firms that are not complying with the changes brought by the RDR.

Our fake story also highlighted concerns in the industry about ‘restricted advisers’ and what some IFAs believe to be a difference in the level of regulation of the two advice streams.

One of the changes the FSA made to its RDR plans, as revealed in the final Policy Statement, was the decision not to force restricted advisers to have a set wording when they describe their services to clients.

It was met with glee by the banks but dismay by IFAs. What they want is a sense of fairness across the market and it appears yet again the bank lobby has triumphed.

Let us just hope that by next year, our April Fool has not come true and IFAs are feeling even more hemmed in by rules and regulations from Canary Wharf.

Katrina Baugh, editor, Professional Adviser