FSA undecided on when to begin scrutinising IFA status
Regulator not expected to knock on advisers’ doors to assess independence status straight away.
Scrutiny procedures for assessing whether an adviser is independent once the RDR comes into force are yet to be set by the FSA, one official has said.
Speaking at the IFA Centre Independence Day conference yesterday (4 July), Colin Wilcox, part of the FSA’s RDR implementation team, said the regulator would probably not be knocking on doors the first working day of 2013.
It is “not decided yet” when the regulator will begin assessing whether individuals meet the independent criteria, he said, but this will come in at some point.
“At some stage, we will do some work in terms of are people who are saying they’re independent actually independent?” Wilcox said.
Keeping records of research and due diligence is crucial to be able to demonstrate that such standards are being met, he said.
“Evidence is always crucial in terms of being able to show us you do meet the required standards,” he added.
While Wilcox would not be drawn on precisely when scrutiny of independent advisers would begin, he said it was unlikely to begin on the first day of the RDR applying. He did say, however, that advisers should still be prepared by the deadline and ensure they had a business model in place.
“We have some work going on at the moment,” he said. “Typically, we work on a risk-based approach. We have a finite amount of resource to [apply to] what we think are the key risks in the marketplace.What do we focus on first then next?”
When queried on whether the regulator would be assisting advisers falling short of independence or naming and shaming those not meeting the standards, Wilcox said it was not so black and white.
“Practically speaking, there is a learning curve in relation to this,” he said. “[The regulations are] changing the real requirements from 31 December. Advisers have a decision to make and I would encourage you to make that decision as soon as possible.
“But are we going to start our first enforcement action on 2 January in terms of are you independent? Probably not.”
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