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Aifa wants Limitation Act to apply

IFAs advising clients on transactions without ongoing charges should have significantly reduced potential liabilities, says Aifa.

In the RDR, the FSA will introduce ongoing charges that can only be levied when advisers provide ongoing service, except for regular-contribution investments.

The statute of limitations gives consumers six years after purchasing a product to complain, or three years after they have identified a latent, or unapparent, defect. Aifa director general Chris Cummings says advisers should fall under these rules if clients choose to pay only for a one-off transaction or if ongoing charges cease. He says: “If the client severs the relationship with the IFA after a transaction, then the client has refused an ongoing service. The adviser would have no access to the client records needed to ensure the advice remains app- ropriate in the future.

“This is a fundamental shift in adviser responsibility and moves the game along considerably. If the FSA does not mean for this change to be the case, then it will have to state that.”

Bill Warren Compliance managing director Bill Warren says: “If a client makes a decision not to take ongoing advice, then it would be grossly unfair to hold an adviser responsible for their ongoing financial position.”

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Comments

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  1. It does apply
    It’s only the F-pack that thinks it doesn’t and tries to bamboozle those who left the indsutry prior to FSMA in to paying out due to the inequality of info available to them and retired advisers.
    Not one new adviser agreed to the removal of the longstop that I am aware of and to me that is as good as a fraudulent attack on my personal wellbeing and Human Rights and I will fight to defend my Human Rights with all legal means.
    For the record, my firm has had complaints, I just object to removal of a right of defence which occurred without my knowledge or agreement.

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