Speaking as the FSA announced its feedback on its FSCS funding model review, Mr Hannant, policy director of the Association of Professional Financial Advisers, said more should have been done to help mitigate the effect of RDR changes on firms’ revenue.
Although he welcomed the FSA’s acceptance that product providers retain some responsibility for their products – provided that the intermediary class threshold was breached – he expressed disappointment that the regulator had not listened to the voice of the investment intermediary on the increases.
As part of its consultation response last July, Apfa called the FSA’s proposals “disappointing”, and said: “We’ll be seeking to reverse the proposed increase in the threshold for the investment intermediation class, which will be a further blow for advisers who are struggling under the cost of regulation.”
Mr Hannant said the lack of any change in relation to this point creates a “missed opportunity” to make the funding model fairer and stable. He added: “We are disappointed that the FSA hasn’t announced a more sensible threshold for investment intermediaries.
“The regulator must recognise RDR and the wider economic environment will affect adviser revenues. The lack of revision to the threshold for investment intermediaries is a missed opportunity to build a more stable and affordable funding model.”