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Advisers are told FSCS is their responsibility

Norwich Union distribution director Barral makes scathing criticism of IFA standards

Advisers need to start taking responsibility for themselves on the Financial Services Compensation Scheme and stop relying on product providers, says Norwich Union distribution director David Barral.

He says it is time that advisers were made accountable for their own affairs, blaming low barriers to enter the industry, which he says is not conducive to cleaning up the market.

Barral would rather see a fifth option where it is up to the discretion of product providers where they offer to help with the levy in return for a commitment from IFAs to raise standards.

He says the situation is not helped by adviser busin- esses that fail, cash in their chips and set up elsewhere under a different banner, dumping their liabilities on the compensation scheme.

Barral says although NU is supportive of the work that Aifa is doing on the levy, he says the FSCS has wasted a chance for sufficient reform.

He says: “It is now being proposed that all the firms get lumped together in a vertical scale. That would be fine if it was used as a catalyst for reform rather than throwing away a golden opportunity.

“The IFA sector requires reform. It needs to improve professional standards and it needs to start taking res- ponsibility for managing its own flock.

“I think that raising barriers to entry would improve the situation hugely. I would like to see more self-regulation taking place. IFAs should bare their teeth and should do more to help themselves.”

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