Advisers have welcomed the regulator’s decision to delay the increase to firms’ capital adequacy requirements by a further two years.
The FSA announced this week that it has deferred the introduction of new capital rules for personal investment firms to allow advisers more time to prepare.
The rules mean that all IFAs will have to hold capital worth at least three months of their annual fixed expenditure, with a minimum of £20,000.
Firms were required to hold a minimum of one month’s fixed expenditure of £15,000 by December 2011, two months’ worth by December 31, 2012 and three months or £20,000 by the end of 2013.
Firms must now start implementing the new rules on December 31, 2013, with the full requirements in place by the end of 2015.
This is the second time that the regulator has delayed the new capital adequacy requirements.
Brunning Newman Houghton director David Brunning says: “It is an excellent move by the FSA. Capital adequacy is important but the timescale has been unrealistic.
“Advisers now have a reasonable time to get ready and can use additional reserves to improve the service they provide to clients in the meantime.”
Churchouse Financial Plan-ning director Keith Churchouse says: “I am rather surprised that the FSA is delaying the increased requirements but it is a good move. The pressures on advisers are huge right now and this could have been the straw that broke the camel’s back for many.”