The FSA’s Retail Distribution Review (RDR) has been accused of putting unfair burdens and curbs on advisory firms but the watchdog is determined to end commission-based selling in a bid to put a stop to the mis-selling scandals that have beset the industry for the past 20 years.
Speaking at the Association of Private Client Investment Managers and Stockbrokers’ annual conference yesterday (October 10th 2012), Martin Wheatley, Managing Director of the FSA, to be renamed the Financial Conduct Authority (FCA) early next year, said that he wanted to address potential areas of concern in relation to European legislative moves that have the potential to conflict with the RDR.
Mr Wheatley also defended the RDR’s new definition of independent advice, which will see firms that do not offer financial planning products forced to take on the restricted label.
Speaking of the FCA, Mr Wheatley said that it will continue with a "credible deterrence" policy of cracking down harder on market abuses and will have conduct at its centre and the consumer at its heart. Details of how the new authority will operate will be published in a paper next week.
However, one detail that has already emerged, to the alarm of banks and investment funds, is that the FCA will have the power to ban products and Mr Wheatley has said that its policy will be to “make the intervention first” and then carry out the consultation and the cost/benefit analysis. In fact, the FCA will publish fewer consultations in general and instead focus on a narrower set of cross-industry issues.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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