The director of London-based EA Financial Solutions said: “A business that can demonstrate it has invested high levels of evidenced competence, together with low consumer complaints over years of trading, should not have to have the same level of regulation as less-qualified advisers.
He said that, for those advisers who have the chartered qualification awarded by the Personal Finance Society or the certified status awarded by the Institute of Financial Planning, the FCA should adjust the level of regulation according to the competence of an adviser.
Mr Patel said: “If you have been active in retirement planning for many years, transacting all products including annuities, phased, capped, flexible drawdown and impaired annuities, and you have a low percentage of complaints, then surely you should be less supervised than some who have just begun advising in that area.”
Keith Richards, chief executive of the PFS, said the challenge for most small intermediaries has been the rising cost burden of regulation.
He said: “Offering a regulatory dividend for those who have committed voluntarily to higher standards of technical competence would be a welcome introduction.”
Last year, the PFS made an arrangement with professional indemnity provider Howdens to create a “tangible monetary dividend for chartered”, by giving chartered firms up to 20 per cent off PI premiums.”
However, Mr Richards said the FCA has acknowledged the need to reduce bureaucracy and is encouraging advisers to re-engineer documentation in a more consumer-centric way.
He added: “Martin Wheatley, chief executive of the regulator, has stated that a positive cultural change and evidence of better self regulation would lead to a reduced need for regulation and, presumably, less regulatory cost.
“The regulator is better engaged with the profession and is now providing more examples of ‘best practice’. This is an encouraging development and one that has been welcomed by our members at recent events.”
It is understood that supervision is in place to ensure that markets are working well and consumers are protected.
In previous communications, the regulator has maintained that people who deal with a level six qualified adviser are as entitled to that reassurance as customers who deal with a level four qualified one. However, when asked, the FCA declined to comment.