Advisers pour scorn on FSA’s charging checks

Duncan Carter, director of Lancashire-based Clearwater Financial Planning, said the FSA would have a tough time telling advisers what to charge.

He said: “The FSA would love to be able to influence adviser charging, but this will be impossible as market forces will just determine the levels.

“It may try to use the treating customers fairly approach, but that could be seen as a restriction of trade.”

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Mr Carter said the regulator was right to keep a check on non-advised sales, but claimed the City watchdog should also focus on execution-only firms that provide information which drifts into advice.

It comes after the FSA revealed it was planning to clamp down on rogue direct sales and non-advised product promotions in order to prevent consumers getting a raw deal.

Steven Farrall, adviser for Suffolk-based Williams Farrall Woodward, agreed that it was wrong for the FSA to tell firms how to run their businesses.

He said: “It beggars belief that the failed ‘financial shambles authority’ is going to tell us – who have been running successful profitable businesses for many years, and certainly from before 2001 – how to run our businesses.”

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Qualifications: by quarter one, the FSA will have ascertained who has and who has not attained their statement of professional standing.

Adviser charging: a three-stage process of scrutiny in a period of 18 months. Guidance on good and poor practice will be issued at the end of each six-month period.

Non-advised sales: estimated to be a three-stage process, again for an 18-month period, with guidance given to prevent potential customer detriment.

Scope of practice: who is restricted and who is independent? How are these definitions working in practice? This is expected to be another three-stage cycle.