Richard Howells said the introduction of a long-stop would reward advisers who have met the FSA’s retail distribution review requirements.
During an Association of IFAs and Zurich debate about introducing a long-stop, held at the trade body’s London offices, Mr Howells said more needed to be done to protect the adviser community.
He said if the regulator did not help protect advisers, then the consumers whom the watchdog has been tasked with looking after would lose out as intermediaries turned their backs on the industry and fresh talent rejected the profession due to the risks associated with it.
Mr Howells, whose company has teamed up with Aifa for its Fair Liability campaign, said: “Imagine the pitch to a graduate, you can help clients but build no sustainable value in your business.
“The general public must take ownership of their financial affairs more seriously and giving them the ability to complain forever does not assist this.
“IFAs are open to that conversation about a regulatory dividend. They are doing all this work for the RDR, but cannot see any regulatory dividend.
“We want to see one come in with the introduction of a long-stop. Advisers have played their part in meeting RDR requirements.”
Chris Hannant, policy director of the Association of IFAs, said the new regulator replacing the FSA would have new statutory objectives and this presented the trade body with a unique opportunity to present a case for advisers having a cap on their liability.
Currently the Financial Ombudsman Service has the power to look at complaints that date back more than six years “in exceptional circumstances.”
Mr Hannant said: “We are not talking about removing the ability to complain. The balance between fairness to the industry and consumer is out of kilter at the moment.”
Richard Carne, IFA of Asset Management IFA Ltd, said the lack of a long-stop was a symptom of financial advisers’ “lack of clout”.
When compared with solicitors, etc, Mr Carne said these older professions had far more clout in parliament than the IFA community.
Dennis Hall, IFA with Yellowtail and Financial Adviser columnist, said he would love to have a long-stop but the industry had not previously been in a position where it could argue conclusively why advisers deserved to have one.
After the RDR, Mr Hall said the industry will be in a far better position to argue that a long-stop is deserved. However, while trail commission continues to be paid over many years, advisers cannot argue they deserve to have a limit on their liability.
