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FSA for the day: what I would do if I was the regulator
We asked six advisers what they would do if they were in charge of financial services for a day. Top of the list were improving consistency of approach and reducing Financial Services Compensation Scheme levies. Do you agree?
Managing director, Clearwater Financial Planning
‘I would get the Financial Services Authority (FSA) to ask itself key questions about its plans and practice. The introduction of the retail distribution review (RDR) has been a long and protracted process with far too many twists and turns. Should we not have a period of calm contemplation after all the noise of the past five years? Both treating customers fairly and RDR initiatives have created change, but sometimes the regulator doesn’t seem to wish to be judged by the same standards. Maybe it could look to move in this way?’
Director, TWP Wealth
‘I would focus on the FSA’s lack of consistency and ensure the regulatory goal posts were kept in the same place, helping firms know what was required year-on-year. I would like to see more regulators like Rory Percival, who are open, commercially-minded and willing to listen and act on the suggestions of the industry.'
Managing director, Heron House Financial Management
‘I would look to rationalise compliance by asking sensible questions for the business and, importantly, keeping those questions constant. Stability would allow a firm to know what information is needed and the format it has to be provided in. I recently saw a large research project into changing back-office systems scuppered, courtesy of FSA uncertainty.’
Investment manager, Ferry Financial
‘The FSA has done a great job in increasing advisers' professionalism and qualifications as well as providing clarity on costs for consumers. But I feel that time and resources should be applied to making sure clients receive top-quality and relevant advice. All too often clients are subjected to poor advice, poor products and high charges. What's worse is that these actions are being perpetrated by regulated advisers. Now’s the time to stop this happening.’
Director, Investing Ethically
‘I would look at the Financial Services Compensation Scheme levies. I’m not arguing that the customer protection they provide isn’t needed, simply that the balance of the scheme is unfair and is no longer fit for purpose. Low-risk firms should not be covering the cost of those that operate dangerously. We’re being asked to protect operations we are not related to. Why should an IFA be asked to protect a spread betting firm? Increased costs ultimately get passed onto consumers and ever-higher levies risk pricing people out of advice all together.’
Director, Whiting & Partners Wealth Management
‘I would identify and reduce unnecessary paperwork and procedures. Not only would this create greater efficiencies all-round, but the reduced FSA costs could be shared with financial services. I would focus the FSA on more proactive activities, such as identifying the firms that are not working in the spirit of the regulations more quickly, to prevent bad advice being delivered and the resulting consumer detriment.’