Several IFAs have backed Libertatem’s proposal for a new adviser-only regulator to be carved out of the Financial Conduct Authority.
The rival trade association’s director Garry Heath suggested yesterday (26 October) that this should be an outcome of the Financial Market Advice Review, to fulfill the goal of reducing the cost of advice for the mass market.
FTAdviser put the plans out to the industry and received a majority of responses in support of the plan.
Jonothan McColgan, director and chartered financial planner at Combined Financial Strategies, said that it sounded like a “sensible suggestion” as FCA has separated advisers from provider ties since the Retail Distribution Review, but still regulates the sector in the same way.
“I think it would take a specialist team in the FCA to get a full understanding of the new advisory environment and hopefully where higher regulatory fees and levies come out of the products rather than the advice process.
“It seems to be that the biggest reason for increases in levies is when products go bust, as such surely it is the product providers that should be the ones to pass on the increase of regulatory costs to clients.”
Derbyshire Booth Financial Management managing director Greg Heath also called it a “good idea” and stated that the regulator simply does not understand the nature of the relationship between IFA and clients.
“The FCA tend to treat IFAs like banks or insurance companies, in that they have a professional and yet distant relationship from clients. IFAs tend to be local community-based professionals and their clients, although recognising the professional boundaries, tend to see their adviser socially and often know several generations of the same families.”
Phil Marten, chartered financial planner for Octagon Consultancy, agreed and commented: “The same regulator looking after some of the largest companies in the world, and small one to five employee businesses, is just not working.”
Others came out in support, but doubted the reality of such separation.
Simon Linstead, managing director at Nurture Financial Planning, said: “It think it’s an excellent idea, but not sure if it could be viable. Anything that would help to bring a relationship between the regulator and advisers closer has to be welcomed however.
“The ongoing elevation of costs does nothing to harmonise this relationship and does not harness positive feelings within the adviser community.”
Almary Green managing director Carl Lamb added: “I think it’s an ideal wish list, but it will never happen, so just accept it and get on with it. Educating the regulator is the way forward.”