The Financial Services Authority's (FSA) latest thematic work on how firms are adapting their advice...
The Financial Services Authority's (FSA) latest thematic work on how firms are adapting their advice process to its Treating Customers Fairly regime has been met with strong criticism by advisers.
The work, which looked at IFAs, banks, a product provider and a distributor, found serious problems - including inadequate advice given to clients.
However, it was not the findings that caused such a stir within the IFA community, but the way in which they were reported. Because while the accusations are grave and should be taken seriously, the FSA made a pivotal mistake by only categorising the companies as either 'smaller' or 'larger' firms.
This effectively tarred IFAs with the same brush as banks and tied advisers - much to intermediaries' dismay.
Anyone who has followed the recent debate on the quality of advice - or the lack of it - given by non-independent firms will know that the main culprits are banks and tied firms, not IFAs.
Outraged by the regulator's move, advisers attacked the report arguing that if IFAs had the same lack of details in their files or suitability letters the FSA would not have gone easy on them. And one intermediary even said: "The FSA shouldn't expect the industry to pull its socks up if it can't manage its own dress code."
Regulation should not be a one-way street. Treat customers fairly, of course, but intermediaries need to be treated with respect too. Maybe it is time the FSA had a look at that.
Johanna Gornitzki, editor
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