The Financial Conduct Authority's proposed new directory of advisers will not help avoid problems such as the British Steel fiasco, the chief executive of VouchedFor has said.
Adam Price (pictured) wrote in a blog post published yesterday (17 July) the problem with the current FCA register was not that it was difficult to use, but that there was no way of telling whether the advisers listed were any good - merely that they had been approved by the regulator.
The regulator is creating a new directory to address the problem caused by the introduction of the senior managers regime, which was set to mean only senior managers will appear on the FCA's register.
This would have seen a large number of people - including most financial advisers, portfolio managers and traders - to no longer be visible.
The move had prompted concerns about consumers being more exposed to financial scams.
Mr Price wrote: "The FCA register’s biggest failing is not how difficult it is to use. Its biggest failing is that it contains advisers of varying quality – from brilliant to inconsistent to completely rogue.
"Many of the advisers responsible for the recent British Steel scandal were listed as approved advisers."
He warned under current plans people could be even more exposed to rogues.
He stated: "Perversely, launching a more useable FCA directory could actually increase the number of people who find a bad adviser. I could see little in the consultation paper to suggest the underlying adviser checks would be substantively improved.
"And so, if the FCA cannot guarantee any given adviser is reliable, then perhaps that burden should be shared with private-sector innovators."
When launched, the directory will include information on all those who hold senior manager positions, which require FCA approval, and those whose roles require firms to certify that they are fit and proper, which do not.
It will include details of where they work, what roles they hold, what type of business they are qualified to do and whether there are any regulatory sanctions or prohibitions against them.
The creation of the directory is also aimed at meeting the recommendations of the Work & Pensions select committee, which highlighted flaws in the register during its inquiry into the British Steel Pension Scheme.
VouchedFor, a private sector adviser directory which offers a client review mechanism, called on the FCA to set standards for these services instead.
Mr Price stated: "To help increase confidence in adviser-search services, the FCA or other delegated-body should set standards, monitor and publish results.
"Even if only done on a voluntary basis to begin with, it will give the various bodies and providers something to place their trust in."