Advisers have expressed “mounting frustration” over rising regulatory costs and the implementation of the RDR in a survey of all regulated firms.
The annual FCA Practitioner Panel survey, conducted in February and March and published last week, shows 37 per cent of all firms believe the FSA was ineffective.
The FCA says much of the negativity was driven by small firms that have been affected by the implementation of the RDR.
The survey says: “Respondents believed the RDR was pushed through with no real thinking about how it would work in practice; the timescales and costs of implementation were unclear, and this resulted in the industry being hit with higher costs.
“There is strong underlying belief that ultimately the RDR does not benefit consumers as a large proportion of the population is now excluded from receiving advice.
“The implementation ‘on the ground’ has been poor and firms feel there has been a lack of practical assistance and guidance.”
In addition, small firms feel they are “overburdened” with regulation and not treated fairly over costs compared to large firms. IFAs and general insurance brokers complained about picking up additional costs from misselling scandals that they were not involved in.
The FSA was also criticised for poor implementation of Treating Customers Fairly and the RDR, not being proactive, not doing its job properly in tackling misselling and being too bureaucratic and focused on red tape.
Firms also said they found the FSA website and call centre “very frustrating” and can not always get answers to their questions.
Facts & Figures Financial Planning managing director Simon Webster says: “The FSA has done a horrible job and has been totally ineffective, arrogant and out of touch so I am surprised it got off so lightly. The RDR has created totally unnecessary and ridiculous costs for clients.”