Speaking at the Abbey key accounts conference in Ascot on Tuesday, Aifa director general Chris Cummings warned against the FSA using strategies similar to those of the Department for Trade and Industry.
He said: “The FSA is granting Henry VIII-style powers to its front-line supervisors. They will be able to say, you are not allowed to do that line of business any more. This could be anything – specific products or an entire line of business. Supervisors will not use these powers lightly but they will have them.”
Cummings also warned on the spiralling cost of regulation, which the FSA says will top £1.1bn. He said: “That is a lot of money and we are seeing as much as a 222 per cent increase in regulatory fees for some members.”
Aifa is calling on members to respond directly to the FSA over levy increases. It is in talks with the Conservatives and the Liberal Democrats and has proposed that the Treasury should review FSA fees.
Cummings has also confirmed that he has accepted an invitation to join a special advisory group to the Treasury looking at the future of retail financial services.
A spokesman for the FSA says: “For financial advice firms, the most direct areas of FSA impact and change are likely to follow from the retail distribution review.”