Aifa has warned the huge amount of new data the FSA will require firms to submit as part of its data collection proposals risks destabilising the industry.
Policy director Andrew Strange says the time and costs required for firms to comply with the rules needs to be justified by the FSA.
He says the proposals move the FSA towards becoming an economic regulator and suggest a “slippery slope” which could see more liability fall on individual advisers.
Strange says: “The range and breadth of data the FSA is seeking is vast and we call on the FSA to demonstrate what practical application this has. The proposals also move FSA close to economic regulation. An assessment of service based on price can be dressed up as ensuring value but is simply price regulation.
“The FSA needs to consider what balance between advisers and firms it is seeking to achieve. This is indicative of a slippery slope which could see much greater liability fall on individual advisers.”