Categories: Industry
Tags:FSA| Informed Choice
FSA proposals to develop its capability to monitor individual advisers have been welcomed by the industry, but stakeholders are querying why the regulator has not already introduced a similar system.
In its latest RDR paper on professionalism, the FSA says it will collect more data on advisers in an effort to “build a profile” of individuals over time and better protect consumers.
This may involve collecting data on an individual adviser’s transactional activity, either through product sales data (PSD) returns supplied by providers or via information supplied by firms.
It may be necessary, it says, for firms to supply providers with advisers’ individual reference numbers (IRNs) so they can be paired up with the PSD returns.
“Adding the advisers IRN to these returns would allow us to use this information to improve our understanding of risks that might arise at an individual level and so better protect consumers,” the FSA paper reads.
Currently, the FSA says it makes use of data from firms to inform it about actual or potential market risks.
Martin Bamford, managing director of Informed Choice, says the proposal could help reduce the number of FSA fines issued as a result of mis-selling.
“So far, a lot of the FSA’s activity has been focused at a firm level but, at some firms, an individual adviser could do everything from the initial customer contact to the sale without any supervision or scrutiny.
“This proposal will help prevent those instances where it has been months or even years between a mis-sale and its detection by a firm.”
IFA Simon Webster, managing director of Facts & Figures, says the FSA’s plans make “perfect sense”, but he says the regulator is taking the more difficult route to protecting consumers.
“The truth is the FSA should have been doing this in the first place,” he says. “The RDR, in my view, is largely a response to the churning of investment bond business, and all the FSA needed to do was collect ‘source of funds’ data from product providers to identify those who were re-broking business without good reason.
“In my mind, that would be far easier than getting IFAs to do it themselves. The FSA is like a policeman making an arrest after the event.”
But IFAonline reader David Curley has criticised the proposal, saying the cost of setting up the system will be met by IFAs. “This really smacks of the old saying ‘a sledgehammer to crack a nut’,” he adds.
The FSA says establishing systems to enable it to adopt its proposals would cost it in the region of £1.2m to £2.2m. But it says the cost to firms would not be great because most already hold the data it requires.
| Comment | Industry backs FSA bid to up scrutiny of individual IFAs |
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leave us alone won't you?
Adding the advisers IRN to these returns would allow us to use this information to improve our understanding of risks that might arise at an individual level and so better protect consumers,” says the FSA I protest. We report enough about what we are doing-already. The level f risk as measured by complaint levels about IFA's from consumers is tiny--the present l;evel of reporting is therefore good enough and does not need any more money spent on it. Leave us alone to get on with the job
Posted by: snooks
What 2?
Who is "the industry" then, in this case? It certainly can't be the Banks as that would be Turkey's voting for Christmas, and it can't be the big product providers, as they're very happy flogging bonds at 8% commission via that very conduit. So, it must be us, the IFA's, then? Hmmm. so, the most trusted and least complained about source of advice in the UK votes to have it's self put under yet more scrutiny whilst the Cut-throats and Pirates carry on regardless. Sounds about right. Talking of Christmas, when FSA Mk2 is launched in the guise of a new regulator that, well, isn't, really, at a cost of Millions and still headed up by "Sants-a-clause" on an even more ludicrous salary than he already is (no wonder he gave his bonus away), will we at least have a clean page followed by some REAL consultation between consumers, the regulator "the industry" and get some joined up thinking going on, instead these constant piecmeal changes? Er, no. Sorry. We won't. Unfortunately, it will be more of the same until "the industry" is found collectively exhausted, hanging from their office windows at the end of a noose of such staggering cost and complexity, that even the Christ himself would (again), be found nothing other than guilty.
Posted by: Polfers
What 3
Firstly - why would IFAs have to add the IRN to their returns? The FSA provide us with the IRN - so they know who works here?? (am I missing something here?) Secondly "The FSA says establishing systems to enable it to adopt its proposals would cost it in the region of £1.2m to £2.2m. But it says the cost to firms would not be great because most already hold the data it requires" Who pays for everything the FSA does via their fees? Of course it will cost us! This along with all the new stationery we will need to pay for when the newly named FSA is launched.....C'mon!
Posted by: anon
What 4
Another load of rubbish and more monitoring, look at bank advisers not honest IFa's who have their clients best interests at heart!
Posted by: Shane
Industry backs FSA to scrutinize individual IFAs
Tosh! The FSA is an organization in its death throws, trying to start countless expensive initiatives to justify its existence. The end result will be that we will all have to live on with its petty, illogical, ineffectual rules whilst the quangocrats go off to wreak havoc in their new jobs (same job, different title, bigger salary, more perks).
Posted by: Bill Wells
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