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Lawyer warns IFAs over 'light touch' FCA
by Michelle Abrego on Nov 08, 2012 at 13:13
Incoming regulator the Financial Conduct Authority (FCA) will use thematic reviews, treating customers fairly (TCF) surveys, and mystery shoppers to keep an eye on IFAs, a lawyer has warned.
Speaking at the Personal Finance Society conference Simon Morris, partner at Cameron McKenna, cautioned IFAs not to get too comfortable with the FCA’s proposed ‘light touch’ approach to regulation.
'There will be instances where people think they are flying under the radar but they might be caught out by touch points.'
Morris (pictured) said that touch points would include thematic reviews, TCF surveys and mystery shopping.
He added that the future regulator would be reviewing IFA's proof of suitable advice to clients and how advisers are reviewing new products like exchange traded funds (ETFs).
The FCA would also review the pressure of RDR on intermediaries, he said.
Morris said advisers who could demonstrate strong TCF would have a ready-made defence against any regulatory action.
'TCF is one piece of armour you can use to defend yourself from the FCA,' he said.
He said after studying the FCA document called Journey to the FCA he was 'very reassured to hear TCF will protect you.'
According to Morris the FCA will implement its product ban based on whether the Daily Mail would blame it if a product caused consumer detriment.
‘If the Daily Mail will publish it as a story against the FCA they will stop it. True story,’ he said.
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by Brian Cantwell on May 20, 2013 at 15:02
8 comments so far. Why not have your say?
Jonathan Kirby
Nov 08, 2012 at 14:29
"The FCA would also review the pressure of RDR on intermediaries, he said".
How when those pressurised out are no longer there?
report thisChris F
Nov 08, 2012 at 14:38
They would ring the Daily Mail. Simples.
report thisNearlynolongeranIFA
Nov 08, 2012 at 14:47
"Light touch" - I very much doubt it.
This is what they may SAY but what they do is a totally different kettle ... of turkeys voting for Christmas (as the old "saying" goes)
report thisJulian Stevens
Nov 08, 2012 at 15:07
Maybe Martin Wheatley has realised that no regulator can police absolutely every sector thoroughly, no matter how stupendous its budget, and that a streamlined approach to regulating the IFA sector is the most practical way forward. Hopefully, this will enable the FCA to focus better on other sectors that have so far received what's turned out to be a totally inadequate level of regulatory attention. Maybe he's actually read the Code and agrees with its core precepts, Consider:-
The Regulators’ Compliance Code is a central part of the Government’s better regulation agenda. Its aim is to embed a risk-based, proportionate and targeted approach to regulatory inspection and enforcement among the regulators it applies to.
Our expectation is that as regulators integrate the Code’s standards into their regulatory culture and processes, they will become more efficient and effective in their work. They will be able to use their resources in a way that gets the most value out of the effort that they make, whilst delivering significant benefits to low risk and compliant businesses through better-focused inspection.
Who knows? We'll just have to wait and see.
report thisMan in Black
Nov 08, 2012 at 15:09
Its the thematic reviews that are the killers - mixed with so-called 'skilled person' reports. Both will get greater use in the future.
report thisPhilip Dodd
Nov 08, 2012 at 15:30
Just for the record, this new product called ETFs has been around for about 12 years in the UK.
report thisBelmarsh Solitary
Nov 08, 2012 at 18:37
anyone gives me a light touch, I'll deck 'em
report thisJulian Stevens
Nov 08, 2012 at 19:04
Better than having your chunky bits grabbed by a gorilla.
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