Advisers are disappointed that the Treasury select committee did not call for the FSA to reconsider an adviser long stop in its report on the RDR.
In March, FSA chief executive Hector Sants told the committee that the regulator would be happy to reconsider introducing a long stop if the TSC suggested it should.
But in its report, published last week, the TSC says it is a decision for the regulatory scrutiny committee, a cross-party group of MPs and Lords currently being set up to consider the draft Financial Services Bill.
Philip J Milton & Co managing director Philip Milton says: “The regulator put the RDR together and said that it would be happy to look at the long stop again, so it would have made sense for the TSC to deal with it.
“I am disappointed that the committee did not make the call and passed the decision on the long stop to another group. With the rise of claim management companies, advisers need the protection.”
P3 Wealth Management managing director Frank O’Donnell says: “The FSA needs to be taken to task and the committee should have forced the long-stop issue on to the FSA. It seems at the moment the FSA is answerable to no one.”
The TSC says if a long stop is introduced, it should be “shown to be clearly in the interests of consumers”.
Aifa director of policy Andrew Strange says: “For consumers in general, a long stop would result in a more robust industry and would foster greater consumer responsibility, so for consumers, it would have a positive impact. Less than 2 per cent of complaints would come out of scope if a long stop were introduced.”
The FSA declined to comment on the issue.