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.