An independent wealth management firm has hit out at the FSA, saying that it should be setting a better example.
Addidi Wealth says that high-profile members of the FSA who have left, or are leaving, the regulator should be held to account.
Meanwhile, another leading IFA has separately told the Treasury Select Committee that high-profile members of FSA staff should not simply be allowed to walk away ‘without a care in the world’.
Anna Sofat, managing director of Addidi Wealth, said: “There is a real issue right now around how the FSA calculates the Financial Services Compensation Scheme levies.
“While I agree that those who have received poor advice should be compensated, the way in which the regulator is demanding that IFAs deal with Keydata clients is disproportionate.
“The FSA is insisting that firms which sold Keydata products must go through all their books and compensate individuals, whether the client has complained or not. Keydata products can’t have been bad for everyone or the FSA would never have allowed them to be sold in the first place.
“The FSA is creating the assumption that everyone has been mis-sold and some of these firms which are having to review every single Keydata case could go under, due to the effect that the potential compensation claims will have on their capital adequacy levels.
“As for the interim levy being imposed on IFAs due to the Keydata debacle, Addidi never sold any Keydata products, and yet we have to pay this interim levy at short notice, even though we agreed this year’s budget some time ago.
“We now have to cater for this unexpected extra cost, even though we are not responsible for any of the mis-selling.
“Clearly, the FSA must encourage best practice, but surely a better way to incentivise advisers to be compliant is to make the polluter pay – by charging higher FSCS fees to those firms with a high level of upheld complaints, and lower fees for those with fewer successful complaints.
“Networks have traditionally prevented their members from doing high-risk business in order to keep their compliance costs down, so why can’t the FSA devise a levy system which reflects the practice of individual firms?
“The FSA seems to be living in a bubble, when it should be setting an example to the industry by holding its own personnel to account when things go wrong.
“A large number of high-profile figures have left the regulator recently to take up highly paid jobs elsewhere, thanks to their regulatory experience, but they will never be held to account if things go wrong.
“Fred Goodwin’s pension was cut for poor performance, so why should regulators who are paid by the taxpayer not face similar accountability?”
Separately, PanaceaIFA chief executive Derek Bradley has written to Mark Garnier MP, a member of the Treasury Select Committee, saying that key figures who have left the FSA should be held to account by the committee.
Bradley says: “Given the huge cost involved to the industry and ultimately consumers, the TSC should as a matter of priority call all these key figures before them and get to the truth surrounding the exact reasons behind their departures.
“After all most of them, if not all, have played a very key part in the RDR design and implementation processes. To see them simply walk away without a care in the world before January 1, 2013, is a manifest failure in duty on their part.
“Additionally, it shows a distinct lack of respect for their colleagues, who will be left to carry the can if all goes wrong with the TSC and of course those they regulate.”
Margaret Cole, managing director of the FSA, has already left, while chief executive Hector Sants has announced his departure, as has Peter Smith, former head of investment policy.
Other top-level departures include those of Amanda Bowe, RDR head, managing director of supervision Jon Pain, managing director of risk Sally Dewar, and chief operating officer Mark Norris.
News Source : http://www.introducertoday.co.uk/
Addidi Wealth says that high-profile members of the FSA who have left, or are leaving, the regulator should be held to account.
Meanwhile, another leading IFA has separately told the Treasury Select Committee that high-profile members of FSA staff should not simply be allowed to walk away ‘without a care in the world’.
Anna Sofat, managing director of Addidi Wealth, said: “There is a real issue right now around how the FSA calculates the Financial Services Compensation Scheme levies.
“While I agree that those who have received poor advice should be compensated, the way in which the regulator is demanding that IFAs deal with Keydata clients is disproportionate.
“The FSA is insisting that firms which sold Keydata products must go through all their books and compensate individuals, whether the client has complained or not. Keydata products can’t have been bad for everyone or the FSA would never have allowed them to be sold in the first place.
“The FSA is creating the assumption that everyone has been mis-sold and some of these firms which are having to review every single Keydata case could go under, due to the effect that the potential compensation claims will have on their capital adequacy levels.
“As for the interim levy being imposed on IFAs due to the Keydata debacle, Addidi never sold any Keydata products, and yet we have to pay this interim levy at short notice, even though we agreed this year’s budget some time ago.
“We now have to cater for this unexpected extra cost, even though we are not responsible for any of the mis-selling.
“Clearly, the FSA must encourage best practice, but surely a better way to incentivise advisers to be compliant is to make the polluter pay – by charging higher FSCS fees to those firms with a high level of upheld complaints, and lower fees for those with fewer successful complaints.
“Networks have traditionally prevented their members from doing high-risk business in order to keep their compliance costs down, so why can’t the FSA devise a levy system which reflects the practice of individual firms?
“The FSA seems to be living in a bubble, when it should be setting an example to the industry by holding its own personnel to account when things go wrong.
“A large number of high-profile figures have left the regulator recently to take up highly paid jobs elsewhere, thanks to their regulatory experience, but they will never be held to account if things go wrong.
“Fred Goodwin’s pension was cut for poor performance, so why should regulators who are paid by the taxpayer not face similar accountability?”
Separately, PanaceaIFA chief executive Derek Bradley has written to Mark Garnier MP, a member of the Treasury Select Committee, saying that key figures who have left the FSA should be held to account by the committee.
Bradley says: “Given the huge cost involved to the industry and ultimately consumers, the TSC should as a matter of priority call all these key figures before them and get to the truth surrounding the exact reasons behind their departures.
“After all most of them, if not all, have played a very key part in the RDR design and implementation processes. To see them simply walk away without a care in the world before January 1, 2013, is a manifest failure in duty on their part.
“Additionally, it shows a distinct lack of respect for their colleagues, who will be left to carry the can if all goes wrong with the TSC and of course those they regulate.”
Margaret Cole, managing director of the FSA, has already left, while chief executive Hector Sants has announced his departure, as has Peter Smith, former head of investment policy.
Other top-level departures include those of Amanda Bowe, RDR head, managing director of supervision Jon Pain, managing director of risk Sally Dewar, and chief operating officer Mark Norris.
News Source : http://www.introducertoday.co.uk/
